Home Health & Hospice Week

Pending Medicare physician cut even bigger than last year's.

News of a pending steep cut to Medicare phy-sician payment rates could actually result in home care payment cuts instead.

The Centers for Medicare & Medicaid Services has announced that docs' conversion factor in 2007 will be 36.1542--4.6 percent lower than this year's rate--unless Congress steps in again. That 4.6 percent cut is even higher than the 4.4 percent cut that threatened physician payments this year.

Chances are lawmakers will bail out physicians again in 2007--and the money may once again come partly from home care payment reductions, industry veterans warn.

The law requires CMS to cut physician payments each year if spending grows faster than the overall economy, and CMS has predicted sharp cuts every year until 2015.

Physician spending increased 8.5 percent in 2005, and almost all of that growth (7.5 percent) came from physician services, not drugs or supplies. The biggest increases came from evaluation & management (2.6 percent), procedures (2.5 percent) and imaging scans (2.3 percent). • Congressional representatives are now hopping on the bandwagon to defeat the Deficit Reduction Act.

Rep. Henry Waxman (D-CA) is calling on fellow lawmakers to investigate "the White House's knowledge of the constitutional defects" of the DRA, signed into law Feb. 8 by President Bush--a move that could have big implications for DME suppliers.

The version of the DRA signed by President Bush (S. 1932) is not the same as the version passed in the U.S. House of Representatives on Feb. 1. The House version requires Medicare to lease durable medical equipment to beneficiaries for up to 36 months, while the version signed by the President limits such leases to 13 months. For DME suppliers, the shorter lease period could mean a cut in Medicare revenue of $2 billion over five years.

For an overview of Waxman's allegations, go to www.democrats.reform.house.gov/Documents/20060330160732-44562.pdf. • HHAs served by regional home health intermediary United Government Services should be seeing their claims adjusted for the rate reduction required by the Deficit Reduction Act. UGS began adjusting claims for the "rollback to the 2005 pricer" April 11, it says on its Web site.

Payment increases for the rural add-on will take a little while longer, however. UGS plans to begin adjusting claims for the rural add-ons May 1, it says.

Both types of adjustments will show up as 32I or 33I adjustments on your remittance advice (RA), the RHHI explains. RHHIs have until July 1 to make the adjustments. • CMS is offering more clarity on how it decides which local coverage determinations (LCDs) will become national policy. The agency has issued two guidance documents that detail steps in the national coverage determination (NCD) process concerning CMS' determinations of whether an item [...]