Medicare Update

Brett Baker, director of ACP Regulatory and Insurers Affairs department, provided an update on the Medicare RUC five-year review, Medicare carrier denial rates, and the transition to new Medicare consolidated carrier areas.

Medicare Relative Value Scale Update Committee Five Year- Review

Brett Baker discussed ACP efforts to increase the value of the E/M Services under the Medicare Five-Year Review of the physician fee schedule which looks like it is going to be a big win for the organization and its members. He said that every five years Medicare is required to assess the accuracy of the payments under the physician fee schedule. This five year review focused on the values of physician work for evaluation and management (E/M) codes. He said that ACP and other organizations had said that the work value of many E/M services was too low and that the codes were undervalued. CMS agreed to include those codes in the 5 year review and asked the Relative Value Scale Update Committee (RUC) to evaluate E/M work changes. Mr. Baker said that subsequently the RUC made RVU recommendations to CMS for several E/M service code families that would represent a significantly work RVU increase, ranging from 4 percent to 51 percent (99251) and on nine high volume E/M codes. He said that statements from CMS Administrator, Mark McClellan, MD, FACP, PhD and other CMS officials indicated that the agency plans to accept the RUC E/M recommendations. A decision on the RUC recommendations is expected to be published by CMS in May, 2006 with a 60-day public comment period. The final 2007 fee schedule with E/M work RVU’s will be published by November 1 and effective in January 1, 2007.

Mr. Baker said the impact of the recommendations on Medicare and the private sector if implemented include:

Medicare: Medicare dollars would now shift to internists and other cognitive-oriented physicians. However, the actual Medicare payment for an E/M service will not increase at the percentage equal to the work RVU increase. He said that CMS needs to make an offsetting adjustment to allow for all E/M services work RVU increases to maintain budget neutrality. He said that CMS would likely make this budget neutrality adjustment to the conversion factor, effectively lowering the payment made to all services.

Private Sector: Implementation of the E/M RVU increases for Medicare should have significant financial impact for internists in payment from private health plans because many health plans base their payment on the RVUs for each individual service that are found in the Medicare Resource-Based Relative Value Scale (RBRVS). It is still unclear whether health plans will adjust payments to reflect the significant RVU increases in many of E/M services codes under Medicare. Mr. Baker said that ACP is trying to decide whether to proactively address the issue with major health plans and/or their umbrella organizations and asked for any thoughts or suggestions on how to proceed with the private payer plans that use RVUs.

Brett Baker can be reach at bbaker@acponline.org or 1800-338-2746 ext. 4533 for your suggestions or comments.

Medicare Denial Rates Carrier

Mr. Baker outlined ACP California’s experience with the state carrier to get carrier- specific information on denial of physicians’ claims. He said that ACP staff searched for Medicare carrier –specific denial information but found no or little information. He said that CMS and all the carriers do retrospective reviews that they publish on how they process claims. Carriers may want to make adjustments as a result of CMS retrospective reviews. He said that ACP is interested in suggestions on how ACP and its chapters can work together to address denial-related issues. He said that the California Chapter has suggested that ACP focus on the following areas:

  • Work with CMS and Medicare carriers to release denial data;

  • Use this data to find patterns of errors;

  • Educate ACP members on how to reduce denial rates; and

  • Advocate for CMS/Medicare carriers to improve the claims appeals process.

He noted that ACP is working on a guide for members that shows what Medicare will pay separately, what Medicare considers bundled services, and what Medicare considers to be non-covered services that you could bill the patient for directly. The guide should be available in the next few months.

Transitioning to Medicare Consolidated Carrier Areas

Mr. Baker said that the 2003 Medicare Modernization Act required CMS to consolidate the number of Medicare carriers/contractor areas by moving to Medicare Administrative Contractors (MACs). He said that there will no longer be Part A Fiscal Intermediaries and Part B carriers only MACs. He said most of the issues related to the consolidation should not affect the physicians directly except for a few issues of local coverage that the College is focused on, including the availability of a Carrier Medical Director and other staff to address the physicians’ concerns on a peer-to-peer basis. He said that the College is still looking for ways to get physicians input into local issues. These are the areas that ACP will focus on as the consolidation moves forward. He asked that chapters keep the College informed as they become aware of any problems related to this issue.

View the Presentation.