A new proposal from the Centers for Medicare and Medicaid Services could result in a better bottom line next year for physicians who spend a lot of time on evaluation and management services.
CMS officials are seeking to increase the work component for relative value units (RVUs) for a number of evaluation and management service codes. For example, Medicare is proposing to increase the work RVUs for the commonly used established office visit codes 99213 and 99214. The proposed changes, which are the result of a mandatory 5-year review by the CMS, would take effect in January 2007.
The proposed rule, issued on June 29, also calls for changes in the practice expense methodology that would involve the use of practice expense survey data from eight specialties—including cardiology, dermatology, and gastroenterology—to better calculate the costs incurred by physicians. These changes would begin in January but would be phased in over 4 years.
To pay for the proposed increases in reimbursement, the CMS is required to impose across-the-board cuts in work RVUs. This could mean payment cuts for physicians who provide fewer evaluation and management services.
Moreover, the expected increase for primary care physicians could be offset by the end of the year if physicians are unable to get a temporary fix to the sustainable growth rate formula, which is expected to cut physician payments under Medicare by nearly 5%. “The CMS proposal reinforces the urgent need for Congress to act to stop the Medicare physician payment cuts and ensure that payments keep up to practice costs,” Dr. Cecil Wilson, AMA board chair, said in a statement.
For neurologists, the CMS estimates that there will be a 2% increase in allowed Medicare charges in 2007 based on the combined impact of the work and practice expense RVU changes. This is a substantial economic win for neurologists and a better recognition of the importance of evaluation and management services, according to Dr. Bruce Sigsbee, a member of the medical economics and management committee of the American Academy of Neurology. AAN estimates that Medicare will pay approximately $75 million more each year for neurology services under this proposal, which will add thousands of dollars to the bottom line of most neurologists.
Other big winners under the CMS proposal were endocrinologists and primary care physicians. For endocrinologists, CMS estimates that there will be a 6% increase in allowed Medicare charges in 2007 based on the combined impact of the work and practice expense RVU changes.
Surgeons also will see some benefit because of increases for surgical postoperative care, as well as physicians in cognitive specialties such as neurology, he said.
Although the increased payments for evaluation and management services and surgical postoperative care are needed, they are accompanied by an average 5% across-the-board cut in payments, according to the AMA. That cut is the result of the budget neutrality adjustment that the CMS is required by law to make whenever changes in RVUs cause an increase or decrease in overall physician fee schedule outlays of more than $20 million. The proposed work RVU changes are estimated to increase expenditures by about $4 billion, according to the CMS.
The proposal was published in the June 29 issue of the Federal Register. The CMS is accepting comments until Aug. 21.
The proposed rule is available online at www.cms.hhs.gov/PhysicianFeeSched