PROVIDER & FACILITY REIMUBURSEMENT FOR CERTAIN GI SERVICES Final Rule Current Rate Final Rule (HOPD) (ASC)

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1 This Week in Washington D.C.: 1. CMS releases final regulations on 2011 Medicare physician reimbursement and ASC payments 2. Republicans take over House in the mid-term elections Medicare Physician and ASC Reimbursement On Tuesday November 5 th, the Centers for Medicare and Medicaid Services (CMS) released its final regulations on Medicare physician reimbursement and outpatient facility fees. These final rules also begin to implement certain provisions contained in the health reform law, the Patient Protection and Affordable Cart Act, signed into law in March CMS estimates that the total impact to gastroenterology is 0-1%. However, this excludes the sustainable growth rate (SGR) formula s estimated 25% payment cut slated for January Congress in June passed a 2.2% temporary SGR fix through November However, the result of this temporary fix will be a fight in a post-election session of Congress to prevent a 21% payment cut effective December 1, The additional 4% cut is set to begin January Since January 2008, ambulatory surgical centers (ASC) have been paid under a revised payment system that aligns ASC payments to the hospital outpatient department (HOPD) rate. Calendar year 2011 will be the first year of the fully-implemented ASC payment system change. This is important to GI ASCs because before 2008 GI services in the ASC were reimbursed at roughly 90% of the HOPD rate. As you will see below, the fully-implemented revised payment system will reimburse GI ASCs at an estimated 56% of the HOPD rate for the same GI services. The College continues to fight this misguided policy as it threatens the livelihood and solvency of GI ASCs, leads to a migration of Medicare services back to the HOPD setting requiring the Medicare beneficiary to pay substantially more in out-of-pocket costs for the same procedure, and only adds to the burden of a Medicare system that is fast going broke. The Consumer Price Index for all Urban Consumers (CPI-U) will continue to be used to measure ASC inflation despite efforts from the College, GI community, and other specialties performing care in the ASC setting to have CMS tie ASC inflationary updates to the same index for the HOPD setting just as ASC reimbursement is tied to the HOPD rate. The CPI-U conversion factor for 2011 is 1.5%. However, pursuant to the health reform law, a productivity adjustment will reduce the update to a.2% positive update for ASCs in PROVIDER & FACILITY REIMUBURSEMENT FOR CERTAIN GI SERVICES 2010 Current Rate 2011 Final Rule 2011 Final Rule (HOPD) 2011 Final Rule (ASC)

2 G0105 CRC $ $ $ $ Screen, high risk indiv*. G0121 CRC $ $ $ $ Screen, not high risk indiv.* Upper $ $92.64 $ $ GI Exam Upper $ $ $ $ GI Diagnosis Upper $ $ $ $ GI Biopsy Place $ $ $ $ Gastr. Tube $ $ $ $ Operative Upper GI $ $ $ $ Endoscopic. Ultra ERCP $ $ $1, $ Flex. $62.32 $47.73 $ $75.54 Sig Diag Diag. $ $ $ $ $ $ $ $ & Biopsy Lesion Removal $ $ $ $ *According to the final regulations, the Medicare statute provides that CRC screenings in the same area will be paid at the lesser of the ASC or HOPD rate. Please find below some key provisions contained in the final regulations as they impact the GI clinician. Medicare and Colorectal Cancer Screening: Effective January 2011, Medicare beneficiaries will no longer be imposed cost-sharing for those preventive screenings rated A or B by the U.S. Preventive Services Task Force (USPSTF). The USPSTF has given an A rating to screening colonoscopy, flexible sigmoidoscopy, and fecal occult blood screening test. Colorectal cancer screenings are explicitly excluded from the deductible cost-sharing as well, even if the screening turns into a therapeutic or other diagnostic procedure on the same day in connection with or a result of the screening.

3 Providers will use a new HCPS modifier to the diagnostic procedure code that is reported instead of using an HCPS screening code. While there will be no Medicare beneficiary cost-sharing for these colorectal cancer screenings, it is important to note that Medicare beneficiaries will be assessed the coinsurance -- 20% of the physician and facility fee -- for those colorectal cancer screenings turning into therapeutic procedures. CMS stated in the final regulation that waiving the coinsurance requires a legislative fix by Congress. Additional Requirement for the Stark Law Exemptions: The in-office ancillary services exception in the Stark Law allows referring physicians to provide health services to the same patient provided certain conditions are met. The health reform law created a new disclosure requirement effective January 1, 2011 when performing MRI, CT, PET, and other imaging services. The referring physician will be required to inform a patient of alternative suppliers of MRI, CT, and PET imaging services (only these imaging services for now). This disclosure notice must be written in manner reasonably understood by all patients, be given to the patient at the time of referral, indicate that the patient may go elsewhere for these imaging services, and must also include a list of other imaging services providers. This list of alternative providers should include 10 suppliers within a 25 mile radius to the physician s office at the time of referral (same standard for both rural and urban providers). This list must include the name, address, phone number, and distance from the referring physician s office. The completed disclosure form must be included in the patient s record. PQRI: The health reform law makes changes to the Physician Quality Reporting Initiative (PQRI) including authorizing incentive payments through 2014 and requiring a penalty beginning 2015 for eligible providers who do not satisfactorily report data on quality measures (-1.5% in 2015 and -2% cut in 2016 and beyond). The law authorizes a 1% incentive payment for 2011 and a.5% incentive for PQRI incentive payments are calculated by using the estimated total Medicare Part B physician fee schedule allowed charges and not just those charges associated with reported quality measures. However, PQRI measures for GI are quite limited: Hepatitis C (Measure Nos ), Preventive Care & Colorectal Cancer Screening (No. 113), Health IT Adoption (No. 124), and Endoscopy & Polyp Surveillance for Patients with History of Adenomatous Polyps (No. 185). CMS also allows for an additional bonus of.5% per year ( ) for providers participating in the maintenance of certification (MOC) program required for board certification and upon completion of an MOC practice assessment. Please visit the College s website to participate in ACG s self-assessment program for MOC. Other issues potentially impacting the GI clinician: Physician Compare Website: The health reform law requires the HHS Secretary to develop a Physician Compare website by January To meet this directive, CMS

4 will use the current Physician and Other Health Care Professionals Directory as a foundation for this Physician Compare website. CMS will post the names of those providers (and group practices) that submit 2011 PQRI quality measures and qualify to earn a PQRI incentive payment. Beginning 2013, however, CMS must make performance measures data, including PQRI participation, for all physicians publicly available. Potentially Misvalued Services: The health reform law directs the HHS Secretary to examine potentially misvalued codes and establish a formal process to validate relative value units (RVU s) for services. CMS recommended that the AMA RUC review other categories of codes to better assess their value, including high volume/cost items on the RUC s Multi-Specialty Points of Comparison list. CMS proposes that the RUC review the following GI related codes: (Upper GI Endoscopy, Diagnosis), (Upper GI endoscopy, biopsy), (lesion removal colonoscopy), (colonoscopy and biopsy). This is a potential threat to the already reduced reimbursement rates for some of the key GI codes and the College will work to prevent further reductions. Republicans Make Substantial Gains in Mid-Term Elections In what President Obama called a shellacking, the aftermath of the November 2nd elections was the biggest shakeup in Congress since 1994 and the largest change of seats in the House of Representatives since Republicans in the House gained 60 seats, securing a majority of 239 to 196. Republicans also gained 6 seats in the U.S. Senate. However, Democrats regained control of the upper chamber with a 53 to 47 majority. This is an anomaly because the House has changed parties six times since World War II, and each time the House flipped, control the Senate changed parties too. For the GI clinician, there will be many issues potentially impacting your practice in the upcoming Congress. Republicans campaigned on the mantra to repeal and replace the health reform law, but it is unlikely the law will be repealed with Democrat control of the Senate and President Obama s veto power. Even if Republicans were able to repeal the law, they would be forced to replace the law with another health care overall legislation leading up to the 2012 elections. The College expects that the 112 th Congress will instead focus on the implementation of the current health reform law. ACG anticipates that certain provisions of the Patient Protection and Affordable Care Act will face increased scrutiny, including: Reporting Requirement: This provision requires businesses, including physician practices, to issue an IRS Form 1099 to vendors selling them $600 or more in goods annually. It also requires these businesses to file an information report with IRS. This is effective for those purchasing made after December 31, Independent Advisory Board (IPAB): This provision requires the creation of a 15- member board to make recommendations to Congress on slowing the growth of Medicare costs. The recommendations would become law unless Congress acts otherwise. It is important to note that the law forbids the IPAB to make recommendations on hospital reimbursement as well as changes to Medicare

5 beneficiary coverage determinations or cost-sharing, meaning that one of the few major cost-drivers susceptible for cuts is provider reimbursement. 3. Prevention and Public Health Fund: This provision authorizes a $2 billion public health fund for prevention and public health programs. 4. Congressional Appropriations (Power of the Purse): There may be efforts to impact implementation through funding restrictions on CMS activities. ACG believes that the quality reporting and cost transparency initiatives in the health reform law will still be implemented as these provisions have bipartisan support. There are various provisions mandating additional provider and facility quality reporting for the same reimbursement. As has become the norm, addressing Medicare physician reimbursement and the SGR formula is another issue for the 112th Congress. While each party concedes that SGR is one issue desperate for reform, a permanent solution requires significant revenue from somewhere else and ACG is dubious the new Congress will now have the appetite to tackle this issue. ACG members should also expect House Republicans to revive medical malpractice reform. This is been a staple issue of every Republican health care proposal in the past. There are forces outside Congress that may determine the fate of health reform as well. A federal court in Florida has allowed a case brought by 20 state attorneys general and the National Federation of Independent Businesses (NFIB) that challenges sections of the law. This is important because when Congress passed health reform, it did not include a severability clause, a standard provision that allows parts of the law to survive if others are found unconstitutional and are struck down by a court. It looks like we are in for a wild ride in ACG will monitor these issues and continue to fight for clinical gastroenterology. Stay tuned for further updates. Please also share your thoughts and engage in discussion with fellow ACG members on the ACG GI Circle. To login and share your comments, visit If you have not yet activated your ACG GI Circle account, please us at acgcirclefeedback@within3.com. Contact Brad Conway, VP Public Policy, with any questions or for more information. Brad Conway bconway@acg.gi.org