CMS Rule Revises Medicare Physician Reimbursements
CMS on Wednesday issued a proposed rule that would revise Medicare physician reimbursements in an effort to improve the accuracy of payments, CQ HealthBeat reports (Carey, CQ HealthBeat, 6/21). According to CMS, the rule would increase reimbursements for "evaluation and management," or the time and effort that physicians spend to evaluate patient conditions and advise patients on their health management (CMS release, 6/21).
The rule would address two parts of Medicare physician reimbursements: a revision of physician work relative value units and a revision of the methodology CMS uses to calculate practice expenses. The rule would revise work RVUs for more than 400 medical services to "better reflect the work and time required of a physician furnishing the service," a move that would increase Medicare costs by an estimated $4 billion, CQ HealthBeat reports.
In addition, the rule would revise the methodology CMS uses to calculate practice expenses, which include both the direct and indirect costs associated with medical procedures. Under the rule, CMS would use a "bottom-up" system to calculate direct costs, which would use procedure-level data for clinical staff times, supplies and equipment.
The rule also would revise the methodology CMS uses to calculate indirect practice expenses and use practice expense survey data for eight different medical specialties. CMS Administrator Mark McClellan said that the rule would "result in better outcomes because physicians will get financial support for giving patients the help they need to manage illnesses more effectively."
CMS will publish the rule in the June 29 Federal Register, and the rule will remain open for public comment until Aug. 21. CMS in early November likely will issue a final rule, which would begin to apply to Medicare physician reimbursements in 2007 (Carey, CQ HealthBeat, 6/21).
In related news, CMS on Wednesday announced that physician reimbursements for drugs covered under Medicare Part B will increase by an average of 0.5% beginning July 1, Reuters reports. Medicare Part B covers physician services and about 450 medications administered by injection, inhalation or taken orally.
CMS said in a statement, "Comparing the third quarter 2006 payments amount with the previous quarter reveals that for the most part, average drug prices in the market remain stable." Medicare payments will change by less than 2% for 28 of the 50 top drugs, CMS said.
Payments will increase for 30 of the 50 top drugs and remain steady for three drugs, according to the agency (Reuters, 6/21).