MGMA voices concerns about 2001 budget plan

Here are measures that could affect you

The battle over the 2001 federal budget is in full swing, and several new policies and program proposals have providers concerned. Many of the concerns were outlined in a recent letter from William F. Jessee, MD, to the Senate and House budget committees. Jessee is president and chief executive officer of the Medical Group Management Association (MGMA) in Englewood, CO. The MGMA is concerned because the budget:

• authorizes competitive pricing and price negotiations for Part B items and services (except for physician services). The provision could create a situation in which the Health Care Financing Administration (HCFA) could award in-office laboratory service contracts to the lowest bidder. That would eliminate a significant source of revenue for many practices and force patients to drive to different offices to obtain necessary laboratory tests and X-rays.

• seeks to reduce payments for four tests (Hb Alc, TSH, PSA, and urine culture) by 30% to help fund the new prescription drug plan.

Jessee argued that Congress should not consider reducing those payments until the Institute of Medicine releases its finding on Medicare Part B payment methodology for clinical laboratory services. "Providers must be compensated adequately for services they provide and should not have to shoulder the costs of Medicare reform," he wrote.

• attempts to create a Medicare PPO option and network that would give preference to physicians willing to provide certain services at reduced rates. The Clinton administration has failed to provide the details about how the program might work. For example, would Medicare force providers to enter new contracts with private PPO plans to participate in the Medicare PPO program?

"If it does, we fear that beneficiary access could suffer. The administrative hassles of entering into additional contracts could outweigh the benefits of serving Medicare beneficiaries selecting this option," wrote Jessee.

Administrative advantages’

The budget proposal also suggests that Medicare providers would benefit from participation by being "given administrative advantages, such as faster claims payment and alternative administrative and related procedures." If the Clinton administration "is admitting that HCFA can adopt administrative efficiencies, why should it only be provided to PPO providers — in exchange for a discount? We urge Congress not to consider the PPO provision until all the details have been ironed out," Jessee wrote.

• permits bundling of payments only if savings are anticipated. Under the Clinton administration’s proposal, Medicare would provide a single comprehensive payment for a group of related services regardless of whether the individual components typically are paid under Part A and Part B Medicare.

"While risk-sharing arrangements are evolving, there are currently no standards which allow for fair implementation of a bundled payment system across various entities," Jessee explained. And because the flat bundled rate is paid to the hospital and not to the physician, physicians are concerned that hospitals will begin to micromanage which services should be rendered.

• authorizes a demonstration of bonus payments for large physician group practices. MGMA says it supports compensating large physician group practices for efficiencies they provide to the Medicare program, but it wants to see more details.

• includes $220 million in new provider user fees. "User fees are nothing more than taxes imposed on providers who participate in the Medicare program, wrote Jessee. "Providers should not be charged fees to participate in the Medicare program."

What’s included

These new user fees include:

— paper claim fee. The proposal says HCFA can charge providers $1 for any Medicare claim not submitted electronically.

— duplicate/unprocessable claim fee. HCFA could charge a $1 fee for each duplicate claim or claim with inaccurate or insufficient information.

— survey certification fee. Permits HCFA to impose a user fee for initial certification and recertification surveys.

• proposes elimination of the physician markup for outpatient drugs by limiting the Medicare payment to 83% of the average wholesale price. The MGMA says this proposal goes beyond fighting fraud and abuse and may harm group practices and patients.

"The administration’s proposal to limit Medicare payment to 83% of the average wholesale price would create an uneven playing field in the group practice setting," Jessee wrote. "While many large practices buy drugs in bulk, small practices purchase drugs in small quantities. Limiting Medicare payment to 83% would disadvantage small practices."

Providers also worry the proposal could result in substandard patient care. Many physicians dispense drugs in their offices and provide extra services — such as discussing dosage and treatment of possible side effects — for which they are not directly reimbursed.

"The administration’s proposal exacerbates this problem by limiting Medicare payment to 83% of the average wholesale price since some physicians may stop providing these services because of insufficient reimbursement," says MGMA Washington lobbyist Pat Smith.