American College of Physicians: Internal Medicine — Doctors for Adults ®

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In the News for the Week of 8-15-06

Medicare payment update

  • Physician payment cuts proposed for 2007

Clinical news in the headlines

  • Annals of Internal Medicine:
    • Kidney function test uncovers risk for heart disease
    • Nurse managers help ethnic minority patients with heart failure
    • Drug company used medical education and research to promote off-label use
    • Does pay-for-performance improve the quality of health care?
  • New study finds high-dose statins benefit stroke patients

Other Medicare news

  • Claim payments on hold at end of fiscal year
  • First Part A/B contractor to process claims in six states

Editorial note: Observer Weekly will not be published on Aug. 29 and Sept. 5, 2006.


Medicare payment update

Physician payment cuts proposed for 2007

Unless Congress intervenes, doctors will face a 5.1% across-the-board cut in their Medicare payments starting Jan. 1, 2007, the CMS announced last week. The projected cut would be independent of the gains that internists expect to receive as a result of the CMS June 2006 proposal to significantly increase Medicare payment for many evaluation and management (E/M) services, including those performed and billed most frequently .

The cut in payment rates for physician services—the maximum allowed under federal law—was triggered by higher-than-expected growth in spending on physician and other Part B services, according to an Aug. 8 CMS news release that announced the agency's proposed 2007 Medicare Physician Fee Schedule.

Medicare’s expenditures for physicians grew 10% in 2004-05 and are projected to grow 10.6% in 2005-06, said the release. The proposed cut—called a “negative update”—is determined by the extent that actual spending exceeds the CMS spending target, which is tied to inflation in physicians’ costs of doing business. CMS attributes the higher-than-expected spending to increased volume and intensity of services, imaging techniques, laboratory services and physician-administered drugs.

The growth in Medicare services also likely will prompt an 11% increase in the premiums Medicare beneficiaries pay—to nearly $100 a month.

In the past, Congress has intervened to prevent drastic cuts in physician fees, and physician organizations, including ACP, have begun lobbying lawmakers to do so now. ACP is hopeful that the efforts will persuade Congress to avert the cut—which would effectively cancel out internists' projected gains from increased E/M service payments—and actually provide a positive update to recognize increasing practice costs.

In conjunction with the AMA, College leaders held a press conference last week in Pennsylvania, which is fifth in the nation for number of Medicare enrollees, to help spread the word about the potential effects of significant cuts. AMA President William G. Plested III, MD, noted that almost half of the physicians surveyed by the AMA said that next year’s cut will force them to either decrease or stop seeing new Medicare patients.

“The support of Pennsylvania’s congressional delegation is critical to stop the cuts and preserve seniors’ access to care,” said John A. Mitas II, FACP, the College’s Deputy Executive Vice President and Chief Operating Officer.

CMS’s Dr. McClellan told the Aug. 9 New York Times, that putting off the 2007 decrease would cost the government $13 billion. While historically the government has assumed that physicians have dealt with cuts by providing and billing for more services, federal budget officials interviewed in the article noted that some physicians may respond to continuing reductions by declining to participate in Medicare.

The CMS news release is online.

An ACP news release is online.

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Clinical news in the headlines

Annals: Kidney function test uncovers risk for heart disease

The following articles appear in the Aug. 15 issue of Annals of Internal Medicine. This issue includes an article on how a kidney function blood test identifies patients at risk for heart disease and stroke, among others. The Full text is available to College members and subscribers online.

  • Kidney function blood test identifies risk for heart disease and stroke. A study found that a blood test for cystatin C level, a measure of kidney function, identified a group of elderly people with “preclinical kidney disease” who were also at higher risk for cardiovascular disease, stroke, and death than those with normal cystatin C levels.

  • Drug company used medical education and research to promote off-label use. A pharmaceutical company promoted its anti-seizure drug with a comprehensive marketing strategy that included CME and research, according to a review of court documents. In that trial, the parent pharmaceutical company admitted that it violated federal regulations by promoting the drug for unapproved uses such as pain, psychiatric conditions, and migraine. This report is one of the first to describe the overall structure and extent of the off-label promotional activities.

  • Nurse managers help ethnic minority patients with heart failure. In this study, a group of 406 mostly African American and Hispanic men and women with heart failure received either counseling by nurse managers about heart failure, or a patient information handout. After 12 months, the patients in the nurse-manager group functioned better and had modestly fewer hospitalizations, but the differences did not continue after counseling stopped.

  • Does pay-for-performance improve the quality of health care? This review found that despite “increasing enthusiasm” for the idea of linking payment to performance in heath care, there is little data to support the idea. The review found some positive effects and some unintended negative effects of financial incentives, and the authors propose a 13-point research agenda for further study.

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New study finds high-dose statins benefit stroke patients

Researchers have found that giving patients who survive a stroke or transient ischemic attack (TIA) high doses of atorvastatin—even if they do not have coronary disease—can reduce the chance of a second stroke or subsequent cardiovascular event.

The international Stroke Prevention by Aggressive Reduction in Cholesterol Levels (SPARCL) study included 4,731 patients who had suffered a stroke in the previous six months and did not have known coronary heart disease. Researchers found that 2% fewer patients suffered a second stroke—11% vs. 13% over five years—if they received 80 mg of atorvastatin daily compared with placebo. The study was funded by Pfizer, which markets atorvastatin as Lipitor.

While the number of subsequent ischemic strokes went down, the number of hemorrhagic strokes increased. The overall mortality rate was similar between the two groups. The study appears in the Aug. 10 New England Journal of Medicine.

Patients who took atorvastatin reduced their mean LDL cholesterol levels to 73 mg per deciliter, compared with a mean LDL level of 129 mg/dL in the placebo group. Researchers said that their findings suggest that stroke or TIA should be considered a coronary heart disease risk equivalent in terms of statin treatment and that atorvastatin should be initiated soon after a TIA or stroke.

The New England Journal of Medicine abstract is online.

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Other Medicare news

Claim payments on hold at end of fiscal year

Physicians who bill Medicare for services are advised that a brief hold will be placed on payments for all claims during the last nine days of the federal fiscal year (September 22 through September 30, 2006).

These payment delays, mandated by the Deficit Reduction Act of 2005, will not result in interest accrual or late penalties, according to the CMS' MLN Matters newsletter. All claims held during this time will be paid on Oct. 2, 2006.

This policy only applies to claims subject to payment. It does not apply to full denials, no-pay claims, and other non-claim payments such as periodic interim payments, home health requests for anticipated payments, and cost report settlements.

Please note that payments will not be staggered and no advance payments will be allowed during this 9-day hold.

The MLN Matters article is online.

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First Part A/B contractor to process claims in six states

Noridian Administrative Services, LLC (NAS), has been selected to handle Part A and Part B Medicare claims in six states, CMS announced. The contract covers Arizona, Montana, North Dakota, South Dakota, Utah and Wyoming.

It is the first of 15 contracts to be awarded by 2011 under the contracting reform provisions of the Medicare Modernization Act of 2003, said CMS. Under the current system, fiscal intermediaries process claims for Medicare Part A providers while carriers handle Part B claims for doctors, laboratories and other practitioners.

The contracting reforms will replace the fiscal intermediaries and carriers with Part A/Part B Medicare Administrative Contractors (A/B MACs). The NAS contract, worth $28.9 million in the first year, wil be implemented immediately, and NAS will assume full responsibility for claims processing in the six states no later than March 2007.

Further information about Medicare contracting reform can be found online.

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Copyright 2006 by the American College of Physicians.

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