Medicare Compliance & Reimbursement

Conversion factor still faces 5.1-percent cut.

There's still time to stop a steep 10-percent cut to your work RVUs, and physicians are pressuring the Centers for Medicare & Medicaid Services (CMS) to help them avoid it. 

The proposal: CMS has proposed to cut all work relative value units (RVUs) by 10 percent across the board to pay for a $4 billion increase in work RVUs for some evaluation & management codes. In combination with changes to the practice expense RVUs, this change could slash payments for some codes dramatically, say physicians.

The alternative: Instead of cutting work RVUs, CMS could make a smaller cut to the conversion factor, suggests the Practicing Physicians Advisory Council (PPAC). At its Aug. 28 meeting, PPAC urged CMS to substitute the conversion factor cut because it would hit individual codes less hard, according to press reports. A conversion factor cut would be spread across all CPT codes, including ones with no physician work.

PPAC members welcomed the E/M boost, because physicians need to be rewarded for spending time with their patients. But they also felt that raising some work RVUs, while imposing an across-the-board cut in all work RVUs, would be counter-productive. Some members worried that cutting the conversion factor instead would lead to steep cuts in practice-expense payments for some services.
 
Another PPAC resolution encouraged CMS to use demonstration projects that allow money to flow from hospitals to physicians. Right now, because Medicare pays for hospitals under Part A and physicians under Part B, the program doesn't reward doctors when they save the program money by reducing hospital spending.

Hurricane Katrina created an unusual opportunity for CMS to experiment with combining physician and hospital spending, officials said. Because CMS had to start over from scratch in New Orleans, the program has been able to ignore the hospital/physician division and to use more information technology and quality-improvement techniques, officials added. P4P Should Have Extra Funding, PPAC Says Meanwhile, the conversion factor still faces another steep cut, a 5.1-percent reduction that CMS has proposed for next year. You'll know more about the chances of avoiding that steep cut once Congress returns from its summer recess, CMS Administrator Mark McClellan told PPAC. Once again, McClellan argued that any move to avoid the 5.1-percent cut must accompany moves to improve the quality of services.

Congress has yet to pass any laws requiring Medicare to institute a pay-for-performance (P4P) system rewarding physicians for meeting quality standards, but many observers believe a system could take effect as soon as next year.

The PPAC members passed a resolution saying that any P4P system must focus on improving outcomes, rather than dictating the way in which physicians practice. Doctors shouldn't be required to follow Medicare's treatment instructions to [...]