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AMA Summary
On March 23, President Obama
signed the Patient Protection and
Affordable Care Act (H.R. 3590) into
law. A number of key provisions in
the new law may have an immediate
impact on your practice and your
patients, while others have a much
longer time frame before they will
take effect.
Medicare payment changes
Although Congress will address the
flawed sustainable growth rate
formula in separate legislation
later this year, H.R. 3590 includes
a number of payment improvements for
physicians that, combined, will
result in immediate and significant
Medicare payment increases for many
physicians.
* 10 percent incentive payments for
primary care physicians. All
physicians in family medicine,
internal medicine, geriatrics and
pediatrics whose Medicare charges
for office, nursing facility and
home visits comprise at least 60
percent of their total Medicare
charges will be eligible for a 10
percent bonus payment for these
services from 2011–16.
* 10 percent incentive payments for
general surgeons performing major
surgery in health professional
shortage areas. All general surgeons
who perform major procedures (with a
10- or 90-day global service period)
in a health professional shortage
area will be eligible for a 10
percent bonus payment for these
services from 2011–16.
* 5 percent incentive payment for
mental health services. For 2010,
Medicare will increase payment for
psychotherapy services by 5 percent.
* Geographic payment differentials.
The national average “floor” on
Medicare’s geographic payment
adjustment (commonly known as the
GPCI) for physician work expired at
the end of 2009. The law
re-establishes that floor in 2010.
In 2010 and 2011, Medicare will also
reduce the GPCI adjustment for
physician practice expenses in rural
and low-cost areas. And, beginning
in 2011, the practice expense GPCI
adjustment will be brought up to the
national average for “frontier”
states (Montana, North Dakota, South
Dakota, Utah and Wyoming).
Physicians in 56 localities in 42
states, Puerto Rico and the Virgin
Islands will benefit from these
geographic payment adjustments.
* Medicare quality reporting
incentive payments extended.
Incentive payments of 1 percent in
2011 and 0.5 percent from 2012–2014
will continue for voluntary
participation in Medicare’s
Physician Quality Reporting
Initiative (PQRI). An additional 0.5
percent incentive payment will be
made to physicians who participate
in a qualified Maintenance of
Certification Program (quality
practice-based learning programs
through specialty boards). Following
the practice now in place for
hospitals, beginning in 2015
physician payments will be reduced
if they do not successfully
participate in the PQRI program. In
2015, the penalty will be 1.5
percent; in subsequent years it will
be 2.0 percent.
Medicaid payment changes
Separate legislation, the Health
Care Education Affordability
Reconciliation Act (H.R. 4872),
still pending at press time, would
raise Medicaid payments to family
medicine physicians, general
internists and pediatricians for
evaluation and management services
and immunizations to at least
Medicare rates in 2013 and 2014. The
legislation also provides 100
percent federal funding for the
incremental costs to states of
meeting this requirement.
Administrative
simplification
Beginning in 2010, national rules
will be developed and implemented
between 2013 and 2016 to standardize
and streamline health insurance
claims processing requirements.
Physicians should benefit from the
changes because it will be easier to
track claims and, in many cases,
should improve physician revenue
cycles and lower overhead costs.
Employer requirement to
offer coverage
Employers with more than 50
employees with at least one
full-time employee who receives a
premium tax credit are required to
offer health insurance coverage to
their employees or be assessed a
range in fees, effective in 2014.
Employers with 50 employees or less,
who represent the vast majority of
physician practices are exempt from
this requirement. A range of small
business tax credits for employers
contributing at least 50 percent of
the costs of coverage for their
employees will also be established,
with credits phasing out as firm
size and average employee wages
increase.
Medical liability protection and
grants
The Secretary of Health and Human
Services (HHS) is authorized to
award five-year demonstration grants
to states to develop, implement and
evaluate alternative medical
liability reform initiatives, such
as health courts and early offer
programs, beginning in 2011. Medical
liability protections under the
Federal Tort Claims Act will be
extended to officers, governing
board members, employees and
contractors of free clinics.
Preventive and screening
benefit expansions
Beginning in 2010, Medicaid will be
required to cover tobacco cessation
services for pregnant women. In
2011, cost-sharing for proven
preventive services will be
eliminated in Medicare and Medicaid.
Medicare payments for certain
preventive services will be
increased to 100 percent of payment
schedule rates (that is, co-payments
will be eliminated), and incentives
will be available to encourage
Medicare and Medicaid beneficiaries
to complete behavior modification
programs.
In the private sector, beginning in
2010, health plans will be required
to provide a minimum level of
coverage without cost-sharing for
preventive services such as
immunizations, preventive care for
infants, children and adolescents,
and additional preventive care and
screenings for women.
Medicare prescription drug
coverage
Medicare patients whose prescription
expenses reach the so-called
Medicare Part D coverage “doughnut
hole” ($2,700 to $6,150) in 2010
will receive a $250 rebate. During
the next 10 years, the beneficiary
co-insurance rate for this coverage
gap will be narrowed in phases from
the current 100 percent to 25
percent in 2020.