Congress Overrides Presidential Veto Of Medicare Legislation — Fee Schedule Rates Stabilized, Medicare Will Resume
Claims Processing

On July 15, 2008 Congress overwhelmingly overrode President Bush’s veto of HR 6331, the Medicare Improvement for Patients and Providers Act. The House voted by a margin of 383-41 and the Senate 70-26, with an additional 18 House and four Senate Republicans switching their votes in support of the bill.

Learn more about the impact on claims processing

The bill reverses the 10.6 percent Medicare physician payment cut that went into effect July 1. It will extend the .5 percent update to physician payments through the end of 2008 and provide a 1.1 percent update for 2009. In addition, the bill extends the Physician Quality Reporting Initiative (PQRI) through 2011, providing a 2 percent bonus for successful reporting. The bill also provides bonuses for e-prescribing by eligible physicians, beginning in 2009 and continuing through 2013. However, if eligible physicians do not e-prescribe, they will face penalties beginning in 2012.

The following is a summary of the physician-related provisions:

Medicare Physician Payment Update

• Stops 10.6 percent Medicare physician payment cut scheduled for July 1, 2008, continues existing 0.5 percent increase through December 31, 2008, and provides an additional 1.1 percent update for 2009
• Effective 2009, requires physician fee schedule budget neutrality adjustments for 2007 and 2008 relative value unit changes to apply to the conversion factor, instead of work values
• Extends the physician quality reporting initiative (PQRI) through December 31, 2010 while increasing the PQRI bonus to 2 percent for 2009 and 2010
• Makes improvements to the PQRI, including a requirement for the endorsement of measures by a consensus-based, standard setting entity and permits group practices to report, using a sampling methodology, on measures targeting high-cost, chronic conditions
• Requires the Secretary to provide confidential feedback to providers regarding their resource use and to submit a plan to Congress regarding transition to a value-based purchasing program for physicians
• Electronic Prescribing (E-prescribing)
• If at least 10 percent of a physician’s Medicare charges fall under the services identified by the PQRI e-prescribing measure and physicians use a qualifying e-prescribing system, they are eligible to receive a:
• • 2 percent bonus payment in 2009 and 2010
  • 1 percent bonus in 2011 and 2012, and
  • 0.5 percent bonus in 2013

If these physicians do not use e-prescribing, they will face penalties of -1 percent in 2012, -1.5 percent in 2013, and -2 percent in 2014 and beyond. Beginning in 2009 physicians will be ineligible to receive a PQRI bonus for e-prescribing

• Exceptions will be made for significant hardships (e.g., rural areas without sufficient Internet access)

Primary Care Services

• Adds new funding and expands the authority for the Medicare Home Demonstration Project. Medical homes are large or small medical practices where a physician provides comprehensive and coordinated patient centered medical care and acts as the “personal physician” to the patient
• Authorizes the Secretary to expand the duration and scope of the demonstration if certain quality and/or savings targets are achieved

Diagnostic Imaging

• In order for physicians, practitioners, facilities or other entities that perform advanced diagnostic imaging services (MRI, CT, and nuclear medicine/PET) to receive reimbursement for the technical component of Medicare imaging studies payment, they will need to be accredited by January 1, 2012. The bill gives Secretary the authority to determine other diagnostic imaging services (excluding X-ray, ultrasound, and fluoroscopy), in consultation with physician specialties, that would be subject to accreditation requirement
• Establishes a 2-year voluntary demonstration program to determine whether physician compliance with appropriateness criteria for advanced diagnostic imaging services

Beneficiary Improvements

• Provides Medicare coverage for “additional preventive services” determined by Secretary that identify medical conditions or risk factors recommended by the U.S. Preventive Services Task Force, subject to national coverage decision process
• Waives deductible for “Welcome to Medicare” physical, expands timeframe for physical from six months to one year following enrollment in Medicare; and adds new services to this benefit, including “additional preventive services” and end-of-life planning

Other Provisions

• Charges Institute of Medicine with making recommendation to Congress on methodological standards for reviewing clinical effectiveness research and best methods for developing clinical practice guidelines
• Directs the Office of the Inspector General to report on the extent to which Medicare providers follow rules regarding discrimination against beneficiaries with limited English proficiency and Culturally and Linguistically Appropriate Services (CLAS) Standards and will require the Secretary to correct deficiencies
• Requires MedPAC to conduct a study on the merits of establishing a Medicare Chronic Care Practice Research Network to test new models of care coordination

Impact on Claims Processing

Now that the mid-year 2008 Medicare Physician Fee Schedule -10.6 percent reduction has been replaced with a 0.5 percent update, retroactive to July 1, 2008, Medicare contractors will continue to process claims that have been on hold on a rolling basis for payment at the -10.6 percent rate.

Once contractors begin processing claims at the new updated rate, Medicare participants should start to receive payments in approximately 10 business days or less. Contractors are now working to update their websites and payment systems with the new rates and should have that information available shortly.

Claims for services rendered on or after July 1 and later billed with a charge at the level of the January 1–June 30, 2008 fee schedule amount will be automatically reprocessed. Claims submitted with any lesser amount will require participants to contact their local contractor for direction on obtaining adjustments. For more information, please visit the CMS website.