On Friday, June 6, Senator Max Baucus (D-MT), Chairman of the Senate Finance Committee, introduced S. 3101, “The Medicare Improvements for Patients and Providers Act of 2008.” Among the provisions, the bill blocks the pending 10.6 percent Medicare physician payment cuts through December 31, 2009 and provides a 1.1 percent update for 2009.

This introduction follows several meetings with Baucus that the Heart Rhythm Society and other medical societies participated in, as well as other meetings with Finance Committee Ranking Member Charles Grassley (R-IA), who introduced a separate Medicare bill on Wednesday, June 11 (view the Society analysis of the bill and its differences).

The Society sent a letter thanking Baucus, but expressed concern with the financing of the temporary payment fix, which will set physicians up for a 22 percent cut in 2010. (Read the Society's letter — PDF, 100K)

The viability of S. 3101 is unclear at this point. In order to move the bill forward, the Senate will need bi-partisan support to secure the minimum of 60 votes needed to a overcome a Republican filibuster threat. In addition, President Bush continues to vow to veto any legislation which cuts funding of Medicare Advantage plans, one of the off-sets of the total bill’s cost identified in this legislation.

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

Quality

• 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)
• Payment bonuses are made after adoption of e-prescribing system, not as an up-front payment to facilitate initial investments

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
• Directs Government Accountability Office (GAO) to study the interest rate and equipment utilization assumptions used in determining practice expense relative value units