Urologists eye administration budget cuts, quality initiatives

Key Points

The fiscal year 2008 federal budget proposed in early February would slash Medicare by $75.9 billion over 5 years. While not directly attacking physicians' fees, the proposal fails to provide a remedy to structural fee schedule problems that, unless repaired, will result in sizable reductions over the next several years.

Moreover, the budget plan "strives to induce providers toward greater efficiency with payment policies that increase the role of competition and create a strong financial incentive for providers to slow cost growth through greater productivity and other improvements in efficiency," Leslie V. Norwalk, acting Medicare administrator, told House and Senate committees in mid-February.

Changes afoot

The Bush budget plan for Medicare met with an icy reception from Democrats who control Congress, particularly in the House of Representatives.

Stark said the proposed budget "preempts Congress's annual review of Medicare payment policy, calling for permanent and long-term cuts that even Republican Congresses would be unlikely to enact. At the same time," he added, "it fails to address physician payment reform, a significant problem which the Bush administration and previous Republican Congresses allowed to fester and grow."

Included in the administration's proposal is a provision that would apply a –0.4% sequester to the Medicare payment amount for all providers in the first year in which general revenue funding for the Medicare program exceeds 45%. That sequester reduction would grow by an additional .4% in each successive year in which the general revenue funding remains above 45%.

According to Norwalk, the plan would reduce Medicare growth from a projected 6.5% annual growth over the next 5 years to 5.6% growth per year. But Stark said that the provision would end Medicare as an entitlement, and would compel across-the-board cuts "that will undermine the quality of health care delivered to America's seniors and people with disabilities."

Pushing forward with the PVRP program while the debate intensified on Capitol Hill, CMS published on its web site steps physicians should take to be eligible for the bonus payment, which would be made in a single, consolidated payment in mid-2008. According to CMS, eligible professionals "who successfully report a designated set of quality measures on claims for dates of service from July 1 to Dec. 31, 2007 may earn a bonus payment, subject to a cap, of 1.5% of total allowed charges for covered Medicare physician fee schedule services."

CMS said that by Aug. 15, 2007, it will publish a proposed set of quality measures in the Federal Register and a final set of quality measures by Nov. 15. Eligible professionals need not enroll, but may participate simply by reporting the appropriate quality measure data on claims submitted to their Medicare claims processing contractor.

Quality collaboratives formed

Meanwhile, CMS recently announced that the Delmarva Foundation for Medical Care, one of its quality improvement organizations, has entered into subcontracts with four regional collaboratives as part of the Better Quality Information to Improve Care for Medicare Beneficiaries (BQI) project. The regional groups will combine Medicare data with data from other insurers. Results from the BQI project will be used to provide performance information to physicians that will assist them in improving the quality of care they are delivering to Medicare beneficiaries, CMS explained, and to make physician performance information available to beneficiaries "in order to help them with physician selection."

"The BQI project will give Medicare beneficiaries a broad overview of provider performance, resulting in better choices in meeting their health care needs," Norwalk said. "The regional collaboratives, spurred by great leadership from physicians and others in the health care community, will also provide critical information to physicians and Medicare on the best practices for data collection, aggregation, and reporting."

The Bush administration's budget plan has been called a non-starter by many influential Democrats on Capitol Hill, and faces tough scrutiny by Republicans, as well.

"At the end of the day, the House and Senate control the purse strings... and the final document may look very different from the president's proposals," said Sen. Michael B. Enzi (R-WY), ranking Republican on the Senate Health, Education, Labor and Pensions Committee.

Despite the debate, the pay-for-performance policies embodied by the BQI project and the PVRP program continue to move forward.

Bob Gatty, a former congressional aide, covers news from Washington for Urology Times.