By John Reichard, CQ HealthBeat Editor
November 2, 2006 -- Hospitals gave a big smooch Thursday to the final version of outpatient payment provisions announced by the Centers for Medicare and Medicaid Services (CMS) late Wednesday, but otherwise industry reaction to regulations released by the agency was strongly critical.
Cardiologists, for example, warned that provisions in the final rule cutting physician payments 5 percent next year would slice their payments even more deeply than that, undermining care to heart patients.
Winning praise from the American Hospital Association was a provision of the outpatient payment rule that delays until 2009 a reduction in payment updates for that type of care if a facility fails to report data on quality of care.
CMS "has correctly given hospitals ample time to implement a reporting system for hospital outpatient services," said AHA Executive Vice President Rick Pollack. He also praised the agency for deciding to develop quality measures "specifically for the outpatient setting."
But AHA did not miss an opportunity to declare that "the entire outpatient system is underfunded." Hospitals receive "only 87 cents for every dollar of outpatient care they provide to America's seniors," it said.
The American College of Cardiology (ACC) said the physician payment rule delivers "among the largest cuts the cardiovascular community has ever had to face. In fact, they are so severe that many practices may have to limit the services they provide and even close their doors to Medicare patients altogether."
Although the rule provides for a 5 percent across-the-board cut to doctors, the actual reductions vary because of changes in "work values" assigned to different specialties. Those changes mean primary care physicians fare better under the rule than other doctors, but their relatively favorable treatment had to be offset by deeper reductions to other doctors under budget-neutrality adjustments in the regulation.
In addition, cardiologists were hit by provisions contained in the rule that carry out cuts in imaging ordered under the budget savings bill (PL 109-171) that was signed into law in February. Those cuts "will be severe for cardiology practices that perform their own cardiovascular imaging studies," ACC said. "For example, Medicare payment for the nuclear myocardial perfusion imaging study that allows cardiologists to assess damage to the heart muscle from coronary artery blockages will be cut by 14 percent."
The combined impact of the 5 percent cut and the adjustment to improve the payment picture for primary care doctors "will reduce Medicare payment for placement of an intracoronary stent by 9 percent," ACC said. Another effect of the rule is to reduce payments over time for certain expenses associated with running a cardiology practice. The revised practice expense formula "will cut payment for Doppler color flow echocardiography 22 percent in 2006 and 72 percent by 2010," the cardiology lobby said.
The American Health Care Association (AHCA) noted that the doctor payment rule ironically requires doctors to order and certify the medical necessity of each "finger stick" blood glucose test for diabetics just as the nation is observing National Diabetes Month.
"The new rule for individually authorized finger stick tests for diabetic patients puts paperwork ahead of quality patient care," said Bruce Yarwood, AHCA's chief executive officer. "Many patients and residents in our nation's long-term care facilities require up to four blood tests a day to properly manage their diabetes and placing restrictions on this essential test is inconsistent with accepted best practices for diabetes management."