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Medicare physician payment: What happened, why and what’s ahead next year On Dec. 19, Congress passed legislation that would replace a scheduled 10.1 percent cut in 2008 Medicare physician payments with a 0.5 percent increase through June 30, 2008. The AMA led a $3 million grassroots campaign to avert the scheduled 10.1 percent cut in Medicare physician payment. As a result, Congress increased spending for Medicare physician payments by 3.1 billion. Aggressive AMA lobbying and advertising generated more than 50,000 phone calls and 500,000 contacts by physicians and patients to Congress. The campaign also included 8,200 targeted television commercials; 6 million Internet impressions; 13 AMA-AARP op-ed pieces placed in key states; six published letters to the editor, including two in the Wall Street Journal; and an earned-media campaign that resulted in 267 million media impressions, including a satellite media tour that reached 15 million people and a radio news release that reached 82 million. The AMA is disappointed in the failure of Congress to provide—at minimum—a two-year payment update that is paid for and that creates a pathway for the long-term replacement of the flawed payment formula. The AMA will work with state and specialty medical societies to execute strategies next year that will achieve this goal. Key elements of 2007 Medicare-SCHIP package • Replaces 10.1 percent cut with 0.5 percent increase through June 30, 2008. If Congress fails to take action before the end of next June, physicians will face a cut of approximately 10.6 percent • Authorizes additional 1.5 percent bonus for Medicare physician quality reporting initiative (PQRI activities) through Dec. 31, 2008 • Extends floor for work geographic adjustment and physician scarcity bonus through June 30, 2008 • Budget offsets: remove $1.5 billion from Medicare Advantage stabilization fund; eliminate physician payment fund carried over from 2006 Medicare package and reduce payments for some Part B drugs • Extends therapy cap exceptions, pathology billing exception and premium assistance for some low-income seniors for six months • Extends SCHIP funding through March 31, 2009 (additional funding for current enrollment) Key policies not included in Senate Medicare package • Limitations on physician-owned hospitals • Electronic prescribing requirement or reductions in payments for paper scripts • Imaging provisions to reduce payments, mandate accreditation or establish appropriateness demonstration projects • Change direction of Medicare’s Quality Improvement Organization (QIO) program to focus on enforcement and require changes in QIO Boards • Provisions to alter or supplant the role of the Relative Value Update committee and provide Medicare with authority to make arbitrary payment cuts for rapidly growing services • Create specialty specific expenditure targets Why did Congress only pass a six-month Medicare physician payment package? • Dysfunctional federal government: The hyper-partisan environment in Washington has resulted in gridlock on several fronts (Medicare, SCHIP, tax policy, health system reform, shifting spending priorities, etc.). • Congressional avoidance of tough choices required by paygo: Averting sustainable growth rate (SGR) cuts requires budget offsets under paygo rules. No one expected the Senate Finance Committee to accept the level of Medicare Advantage cuts approved by the House. However, as time ran out on the session, Congress allowed savings options on Medicare Advantage and other Medicare policies developed by CBO, MedPAC, GAO and the HHS IG to be removed from consideration. If Congress does not offset the cost of fixing the physician payment formula with reductions in other Medicare spending, it resorts to temporary band-aids that dig the hole deeper and grow the problem. • Bush veto threat: The Bush Administration threatened to veto a Medicare package that reduced Medicare Advantage payments. The Senate Finance Committee was considering modest reductions in Medicare Advantage payments that would have paid for a one-year physician payment package prior to the White House veto threat. AMA’s vision for 2008: Harness the collective resources in medicine to reform the system • The challenge: Passing legislation by the June 30 deadline with a narrowly divided Senate will be difficult. To succeed, medicine must effectively target our resources, deliver an extremely unified and focused message and make sound Medicare physician payment the No. 1 priority for the next six months. • A team effort: In the next few weeks the AMA will be working closely with state and national specialty societies to develop, coordinate and execute the 2008 campaign plan. • Register for the AMA National Advocacy Conference: The AMA’s National Advocacy Conference scheduled for April 1-2 in Washington, D.C., provides a timely opportunity for medicine to make "house calls" on Capitol Hill. Join your colleagues in meetings with Members of Congress to press for real reforms www.ama-assn.org/go/nac. • AMPAC: With so much at stake in the 2008 congressional elections, the American Medical Association Political Action Committee (AMPAC) is gearing up to be a pivotal force in key races for the U. S. House and Senate. A new major donor category, Capitol Club Gold, has been created to assure adequate resources for this effort. AMPAC is consistently recognized as one of the most effective political action committees in the country. To learn more about AMPAC, visit www.ampaconline.org. • Expanding activities with patient groups: The AMA will build on recent joint activities with AARP and other patient groups to heighten grassroots pressure for congressional action. • Local events: As Tip O’Neil pointed out, "all politics are local." The AMA will work closely with county, state and national specialty societies to conduct a broad array of events in key states and congressional districts. This will include medical town hall meetings, media events and joint programs with patient groups. • Join our Physician Grassroots Network at www.ama-assn.org/grassroots. Medicare participation decision CMS officials have confirmed that, in light of this week’s legislative intervention, the Medicare Participation decision period is being reopened for an additional 45 days. There was previously a deadline of Dec. 31, 2007 for physicians to decide if they would be "participating" or "non-participating" physicians for 2008; the new deadline to notify carriers of changes in participation status is Feb. 15, 2008. We have asked CMS whether participation decisions for 2008 will be binding for the entire year or only for six months, and whether there will be another participation period before the 0.5 percent payment update expires on June 30, 2008. For now, CMS has indicated that participation decisions made by Feb. 15, 2008, will be binding for the entire year. If new information becomes available we will let you know. Please see the "Medicare Participation Options" document at http://www.ama-assn.org/ama1/pub/upload/mm/399/medicarepayment08.pdf reflecting the extension of the deadline and the six-month payment update.
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