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The debate within the physician community over HCFA’s controversial practice expense proposal has become increasingly heated and divisive since the agency released its latest proposed rule in the June 18 Federal Register.
Providers are basically divided into two camps on the issue. On the pro side are primary care and other physicians with a more office-centered practice, who will generally see their reimbursement rates increase as a result of these changes. These physicians are lobbying for a faster implementation of the new policy.
Surgeons and other specialists that tend to perform more hospital-based services are on the con side. They would see their Medicare payment rates cut under HCFA’s changeover to a relative value unit (RVU)-based practice expense formula. These physicians are questioning the data and arguing for a phase-in implementation.
The intensity of the lobbying on both sides reflects the stakes on the table. For instance, even if HCFA only implemented 10% of its proposal, this would increase Medicare physician payments for office and home care services by $400 million annually, while reducing hospital and surgical-related procedures by the same amount, according to estimates from the Washington, DC-based American Society of Internal Medicine (ASIM).
Physician’s Payment Update spoke separately with two of the key players representing physician interests in the practice expense debate: Randy Fenninger, co-chair of the Practice Expense Coalition (PEC), a group of some 41 physician specialty and health care organizations organized to opposed to the practice expense proposal; and Robert Doherty, vice president of government affairs and public policy for the American Society of Internal Medicine (ASIM), a key advocate for primary care physician specialties wanting to proceed with implementation of the practice expanse proposal.
PPU: What is your reaction to HCFA proposed practice expense rule?
Fenninger: Our reaction has not changed very much from what we thought of the agency’s January report. Given a choice of kicking people in the teeth or gently pummeling them in the arm, HCFA decided to kick them in the teeth.
PPU: There’s been a lot of debate about the quality and reliability of the data HCFA used to devise these payment rates. What’s your opinion?
Fenninger: It’s hard to comment without taking a closer look at the database, but my first reaction is that before, I thought HCFA only had one bad data setindirect costs. Now I think they have managed come up with two bad data sets direct and indirect costs.
PPU: What do you think of speculation that Congress may push back the rule’s official implementation date at least one year?
Fenninger: Our position is that Congress needs to intervene in this process and delay the implementation date while instructing HCFA to take all the time it needs to get this right.
PPU: What do you think of the so-called "down payment" amendment offered by Senate Finance Committee Chairman William Roth (R-DE) calling for a four-year transition to an RVU-based practice expense formula starting with a 10% "down payment" next year?
Fenninger: Of the various proposals being considered by Congress, we like this one the least.
PPU: Why are you opposed to the Roth proposal?
Fenninger: First, we don’t believe HCFA currently has the data to justify the transfer of any money. Why should we concede to a 10% partial redistribution if we don’t think the data has any merit? Plus, the transition period in the Roth bill is a year shorter than the House language. And while Roth calls for a GAO [General Accounting Office] study of the issue, it is not clear what happens if the GAO says HCFA has not done a good enough job. If something like that should materialize, we think it should trigger a requirement that HCFA go back to the drawing board and restudy the issue.
PPU: Which proposal do you favor?
Fenninger: The Commerce committee’s recommendation: a one-year moratorium and restudy of the data and proposal, followed by a four-year phase-in of the new study’s recommendations ending in 2002.
PPU: Mr. Doherty, what’s your take on HCFA’s latest practice expense proposal?
Doherty: We do not feel it is a perfect productfar from it. But we don’t feel it is necessary, appropriate or reasonable to tell HCFA to scrap everything it has done to date and start over.
PPU: What do you suggest instead?
Doherty: We think there needs to be a sense of balance. To that extent, Congress should give HCFA another year to refine its data and methodology, plus, to the extent it is possible, consider and create alternative data sources. We think that’s reasonable.
PPU: What do you say to groups like the PEC that don’t seem to have a problem with starting this entire process over?
Doherty: All we ever hear from the Practice Expense Coalition is the proposal needs more study, more data, more time. PEC’s strategy all along has been to delay while demanding the bar be placed higher and higher before it will talk about implementing the rule. In reality, all this does is make it almost impossible to move ahead. At some point, you have to ask when is enough enough.
PPU: What do you want to see happen?
Doherty: We have to see some real progress made in 1998.
Doherty: We have no problem with a one-year delay in implementation of the final rule. But only one year. Plus, we would consider enactment of Senator Roth’s 10% transitionor down paymentof the new rates starting in 1998 to be a sign of Congress’ good faith and intention to honor the commitment it made to correct the blatant disparities that exist in Medicare’s physician reimbursement formula. We also expect the rule to begin going into effect no later than January 1999, with final implementation no later than the year 2001. That’s our bottom line.