Medical Practice Management
Aug 05

2006 Proposed Medicare Physician Update

From Part B News (www.partbnews.com):

The proposed 2006 physician fee schedule appears in next Monday’s Federal Register. RBRVS FeeCalc gives you a preview of what’s in the rule here, and we’ll have more in our September issue.

Know that you have until September 30 to submit your comments on the proposed rule to CMS. A final 2006 rule should be out around Nov. 1 and take effect next January.

Here are some highlights of the proposed rule:

  • The rule contains the expected -4.3% update next year. CMS blames the sustainable growth rate (SGR) payment update formula. It predicts the SGR means “further negative updates in later years.”
  • Every medical specialty would suffer a pay cut next year. Examples of average cuts: radiologists, 6%; rheumatologists, ophthalmologists, hematology/oncologists and interventional radiologists, 5%; and internists, cardiologists and family practitioners, greater than 4%.
  • Medicare proposes a multiple-procedure discount for certain radiology services.
  • Part B spending would top $56.5 billion next year. The rule must be budget neutral and CMS cites 5 factors behind ballooning Medicare spending: (1) More, and higher-level, office visits; (2) more PT and drug administration; (3) explosive growth in imaging services; (4) more lab and other tests; and (5) higher use of physician-administered prescription drugs.
  • Practice expense data. CMS proposes a new process to update PE-RVUs and stabilize annual shifts. “We understand the need for stable PE RVUs, so that physicians and other practitioners can anticipate from year-to-year what the relative payments will be for the services they perform,” the agency writes. The process includes eliminating the nonphysician work pool. The results of the proposed process would be eased into the fee schedule over a 4-year period because of how it may affect practices. “We are concerned that, when combined with an expected negative update factor for CY 2006, the shifts in some of the PE RVUs resulting from our proposals could cause some measure of financial stress on medical practices,” CMS states.
  • Supplementary PE data. Specialty societies are answering the call to give CMS practice expense data. Medicare received data from 8 specialty organizations and proposes to accept all but the submission from the National Coalition of Quality Diagnostic Imaging Services, which didn’t meet its criteria.
  • Nuclear medicine. CMS proposes to include nuclear medicine in the definition of radiology services under Stark self-referral rules.
  • Therapy caps would finally begin in January.
  • Covered annual glaucoma screening would be expanded to Hispanic beneficiaries older than 65.
  • ESRD facilities would face a host of changes including on drug prices and wage indexes.
  • Individual medical nutrition therapy would qualify for payment via telehealth.
  • Splints and casts would no longer be separately payable but be bundled into relevant procedures.
  • GPCIs. The special 1.67 across-the-board geographic practice cost index for Alaska expires this year. Next year the GPCI for the state lowers to 1.017 (work), 1.103 (PE) and 1.029 (malpractice). Two counties in California, Santa Cruz and Sonoma, would become their own GPCI localities.

CMS accepts comments electronically at www.cms.hhs.gov/regulations/ ecomments/ and via mail at Department of Health and Human Services, Attention: CMS-1502-P, P.O. Box 8017, Baltimore, MD 21244-8017

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →