SGR patch includes ‘troubling’ provision

April 17, 2014

The latest SGR patch includes a provision that instructs Medicare officials to review the value of some procedures and sets a target for reductions of misvalued codes, which has drawn the criticism of organized urology.

Bob GattyWashington-On April 1, President Obama signed H.R. 4302, the Protecting Access to Medicare Act of 2014, which avoids the scheduled 24% Medicare payment cut, provides a 0.5% payment update through Dec. 31, and extends the deadline for payment reform until April 1, 2015.

That action came despite opposition from major urologic and other physician organizations that are all tired of decade-long delays and want the sustainable growth rate (SGR) formula reformed now. But this politically divided Congress was unable to achieve that, and so in passing H.R. 4302, simply punted the ball to the new Congress that will take over in January.

Especially troubling to urology is a provision that instructs Medicare officials to review the value of some procedures and sets a target for reductions of misvalued codes. The bill orders the Government Accountability Office (GAO) to study the American Medical Association’s process for setting the value of procedures.

The AUA opposed that provision, noting that the vast majority of physician services have been reviewed, resurveyed, and revalued over the course of the past few years, and said the provision would disproportionately affect specialty physicians.

Provision ‘not acceptable to urology’

“The AUA was hoping that, this year, Congress would provide a fair and permanent fix to the ongoing SGR problem. Instead, Congress has proposed a patch which, instead of finally putting the issue to bed, will allow the Secretary of Health and Human Services (HHS) to bypass the RUC (Relative Value System Update Committee) process and determine the reimbursement for physician services. This is not acceptable to urology and will potentially reduce access to necessary health care for millions of elderly Americans,” said AUA Health Policy Council Chair David F. Penson, MD, MPH.

That provision is consistent with a recommendation by the Medicare Payment Advisory Commission (MedPAC) in its March 2014 report to Congress. MedPAC noted it had previously recommended a change in the process for identifying overpriced physician services.

“The Commission’s recommendations would give the Secretary (of HHS) a numeric target for the amount of overpriced services to be adjusted,” MedPAC said.

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Stark exception under attack

Also included in H.R. 4302 is language directing HHS to specify through rulemaking “appropriate use criteria for imaging services only from those developed or endorsed by national professional medical specialty societies or other provider-led entities.”

In mid-March, a large group of medical specialty organizations fired off a letter to key lawmakers in both the House and Senate urging that the in-office ancillary services exception (IOASE) to the Stark law be preserved and that the administration’s proposal to impose restrictions on advanced imaging, radiation therapy, anatomic pathology, and physical therapy be rejected.

“There is widespread agreement that improving the U.S. health care system will require more care coordination, not less. The IOASE recognizes that referral within a group practice promotes continuity of care in a setting that is lower cost and more convenient to the patient,” the letter asserted. Among the groups signing the letter were the AUA, American Association of Clinical Urologists, and Large Urology Group Practice Association.

“Ancillary services are essential tools used on a daily basis by practices seeking to provide comprehensive, patient-centered services. Limiting the IOASE would force patients to receive ancillary services in a new and unfamiliar setting, increase inefficiencies, present significant barriers to appropriate screenings and treatments, and make health care both less accessible and less affordable. In addition, it would impede care coordination and interfere with the physician-patient relationship,” the letter read.

IOASE restriction would drive up costs

As in the past, the groups cautioned that prohibiting integrated practices from offering these ancillary services would simply send that care to the more expensive hospital setting. They also contended that both volume and intensity growth for advanced imaging in the physician office has declined since 2007, with “negative growth” in the physician office in 2012.

The letter pointed out that in a report on radiation therapy, the GAO noted that after 2007, the rapid increase in prostate cancer-related intensity-modulated radiation therapy (IMRT) services performed by self-referring groups coincided with declines in hospital outpatient facilities and among non-self referring groups. Thus, it said, utilization of prostate cancer-related IMRT services remained relatively flat.

The groups also pointed out that restricting the IOASE would accelerate the consolidation trend of hospital acquisition of physician practices.

“Reducing the viability of the full spectrum of care being delivered in an independent outpatient setting will most likely centralize care around a few dominant hospital systems, which will undermine competition and in turn raise costs to the entire health care system over the long term,” the letter declared.

Rather than imposing restrictions on IOASE, the groups said the proper way to deal with the issue is to establish appropriate use criteria for advanced medical imaging, such as is proposed in H.R. 4015/S. 2000, bipartisan legislation that would repeal the SGR.

“Our organizations seek to protect Medicare beneficiaries and taxpayers alike by providing high-quality, ethical care in a setting that benefits the patient and facilitates care coordination. We therefore urge you to preserve the IOASE contained in the ‘Stark’ law,” the letter said.UT

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