Hospital-intensive physicians balk at practice expense proposal
Hospital-intensive physicians balk at practice expense proposal
Office-based services benefit from plan
Facility-intensive physicians are in an uproar over dramatic cuts in their Medicare rates proposed by the Health Care Financing Administration’s (HCFA) practice expense rule, which would also include an increase in rates to office-oriented practices.
While some physicians are willing to accept slight cuts, others have problems with the extreme change in payments. They argue that data may be flawed, and the project should be delayed, re-examined, and possibly redone.
"The magnitude of the changes being proposed by HCFA is totally out of proportion to anything we could have imagined. This raises serious concerns about the the face validity of the data on which it is based," stresses Anthony DeMaria, MD, director of cardiology at the University of California-San Diego Medical Center.
"We obtained data about the direct resource inputs from the physician community," Kathleen Buto, associate administrator for policy at HCFA, told Congress shortly after its recommendations were published.
Also, HCFA "believes that the methodology we have used is fundamentally sound and that the data are not fundamentally flawed. We believe that our results are the best that can be achieved, given the information that is, or would likely become, available," said Buto.
Conceding the report is not perfect, Buto said HCFA will "refine the proposed values" in response to the information it receives over the proposed rule’s 60-day comment period.
Proposal stems from physician complaints
For years, physician groups and government leaders have argued that HCFA’s current Resource-based Relative Value Scale (RBRVS) practice expense data should not be based on the historical data used in current calculations. The new proposal is based on a 1993 report to Congress by the Physician Payment Review Commission that recommended changing the current practice expense formula to a relative value unit (RVU) basis, while also raising the reimbursement value of physician evaluation and management services, which are generally underpaid compared to surgical procedures.
"Physicians practicing in an office have to do about 100 office visits to receive the same amount of practice expense overhead payments as a surgeon gets for performing one bypass in a hospital. We think reasonable people would agree that’s out of line," notes a HCFA spokesperson. "Our analysis shows that a ratio of about 18 visits to one heart bypass procedure is more appropriate."
That’s one reason specialties that provide more office-based services remain the big winners and hospital-intensive practices the big losers under HCFA’s revised resource-based practice expense formula.
The range of magnitude between losers and winners, however, was compressed somewhat compared to HCFA’s original January practice expense proposal. (For the impact of these changes on each specialty, see chart above.)
For instance, cardiologists were projected to have cuts ranging from 20% to 25%, according to a preliminary report released by the Washington, DC-based American Society for Internal Medicine. In contrast, the June HCFA recommendation only cut projected cardiology payments by 17%.
Representing 41% of a physician’s Medicare fee schedule, practice expense is one of the three components of Medicare RBRVS payments. The other two components are physician work (54%) and malpractice costs (5%).
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