Physicians to see 9.9% cut

July 15, 2007

Physicians will face a 9.9% cut in the fees they may charge to the Centers for Medicare and Medicaid Services (CMS) in 2008 unless Congress intervenes to stop one of the largest cuts to the physician fee schedule conversion factor in recent years. Proposed changes to the work relative value units (RVUs) for four eye exam codes, however, may soften the blow somewhat for ophthalmologists.

Key Points

Physicians will face a 9.9% cut in the fees they may charge to the Centers for Medicare and Medicaid Services (CMS) in 2008 unless Congress intervenes to stop one of the largest cuts to the physician fee schedule conversion factor in recent years.

Proposed changes to the work relative value units (RVUs) for four eye exam codes, however, may soften the blow somewhat for ophthalmologists.

In the July 12 issue of the Federal Register, CMS proposed the –9.9% update beginning Jan. 1. The negative update, required by the much-disputed sustainable growth rate (SGR) formula, would reduce the conversion factor from $37.8975 to $34.1456.

The across-the-board cut affects physicians in all specialties and is opposed by a host of physician groups, including the American Medical Association (AMA), the American Society of Cataract and Refractive Surgery (ASCRS), the Alliance of Specialty Medicine, and the AAO.

The physician groups are outraged that the U.S. Department of Health and Human Services would use $1.35 billion left over from last year's physician fix package to fund the Physician Quality Reporting Initiative (PQRI) rather than to fix the SGR formula and stop the anticipated cut.

At a time when physician budgets are being slashed, the PQRI dangles 1.5% bonus payments in 2009 for physicians who report their 2008 work on a limited number of approved codes. The codes will apply, however, for only 2% of Medicare-enrolled physicians, according to the AMA.

"I think all of medicine is in opposition," said Nancey K. McCann, ASCRS director of government relations.

In its 900-page report, CMS says "fundamental legal and operational reasons" prevent it from using the $1.35 billion to reduce the negative update and would only be enough to reduce it by 2%. It claims the PQRI will provide the necessary incentive to improve Medicare.

The medical groups see flaws in the incentive system, however, because it fails to provide an opportunity to review the successes and failures of the voluntary 2007 program that just began earlier this month and runs through Dec. 31.

"We have grave concerns about the quality reporting program they've proposed," McCann said. "We think there needs to be an evaluation of the 2007 program before we move forward."

The physician groups also see problems with how the measures will be developed under the 2008 program because they do not funnel through one central consortium that can involve all the specialties, she said.

The 2008 program drops four of the eight ophthalmology measures approved for the 2007 program because they were not approved by the National Quality Forum (NQF). McCann said the NQF did not approve them because there was no "gap in care"-meaning that ophthalmologists do not need to improve the quality of care they deliver to patients with cataracts.

"We have a highly successful procedure; why should we be penalized for it?" McCann said.

The 2008 program will retain measures covering optic nerve evaluation for primary open-angle glaucoma, two aspects of diabetic retinopathy treatment, and a fourth measure related to age-related macular degeneration.

Cautiously optimistic

Despite their objections to the program, ASCRS and AAO are working with the AMA Physician Consortium to develop additional ophthalmology measures for use in 2008.

They also are optimistic that a bill introduced in May-the Senate's Voluntary Medicare Quality Reporting Act of 2007-would require CMS to review the 2007 reporting program before moving forward in 2008. It also outlines a defined process for developing and endorsing measures, McCann said. A companion bill was introduced in the House of Representatives.