Medicare Compliance & Reimbursement

3 simple rules for getting inpatient visits right

Medicare's final physician payment rule for 2005 makes about a 6-percent reduction from 2004 in the amount the program will reimburse oncologists for cancer drugs administered in their offices.
 
However, in its continuing attempt to reimburse accurately but not overpay, Medicare is boosting opportunities for oncologists to bill for services they render in connection with administering drugs, Centers for Medicare & Medicaid Services Administrator Mark McClellan said in a Nov. 3 conference call with reporters.
 
Numerous studies have concluded that Medicare overpays substantially when it reimburses for drugs that are covered under Part B. By the same token, however, oncology groups and some other analysts also say that physicians have been underpaid for services they render in connection with administering drugs. Under the 2005 rule, physicians can earn more by billing for 18 newly coded services connected with drug administration that CMS has adopted. CMS also is basing payments for the new codes on data from the American Society of Clinical Oncology that takes into account payment-boosting factors such as staff time spent preparing medications.
 
Reimbursement to physicians for newly defined services, plus expected increases in Part B drug utilization, will partially offset physicians' losses from the 6-percent cut, said McClellan.
 
The new payment system for Part B drugs, mandated by last year's Medicare Modernization Act, is based on so-called average sales price data that manufacturers submit quarterly to CMS. For 2005, Medicare will reimburse at ASP plus 6 percent.
 
Payments in the rule are based on data from the second quarter of 2004. Payment amounts will be updated quarterly based on new data, but Medicare doesn't expect prices to change significantly in the third quarter, said McClellan.
 
Oncologists and some other providers are warning that the new payment system will damage access to drugs for beneficiaries, particularly in rural areas. In response to those predictions, CMS says in the rule that it does "not expect access problems," but will monitor the 1-800-MEDICARE number for reported access troubles, conduct claims analysis and conduct other monitoring activities at CMS regional offices.
 
Overall, CMS projects that the rule will increase aggregate spending for providers covered by the physician fee schedule by 4 percent in 2005 - to $55.3 billion, up from $53.1 billion in 2004. That 4 percent includes the 1.5-percent overall update Congress granted in the MMA to providers covered under the fee schedule along with other pay increases included in the rule, such as increased payments for administering immunizations, said McClellan.
 
Other new wrinkles include allowing physicians to bill and receive reimbursement separately for screening electrocardiograms provided as part of the new "Welcome to Medicare" physical; covering a one-time evaluation and counseling fee by a hospice-employed physician to determine appropriate end-of-life services; and reimbursing psychologists for administering diagnostic psychological tests and supervising their administration.