Physicians voice concerns over electronic health records, sustainable growth rate

March 1, 2011

With huge Medicare reimbursement cuts for physicians now off the table for this year, the Medicare Payment Advisory Commission (MedPAC) has proposed a 1 percent increase for 2012 as a way of encouraging physicians to continue to treat Medicare patients. But, obsessed with slashing the federal deficit, the current Congress is looking for every conceivable way to cut spending - not increase it.

Key Points

If accepted by Congress, that increase would be in addition to a 0.7 percent increase in the physician practice expense portion of the fee schedule formula. But the first four words of this paragraph are crucial; obsessed with slashing the federal deficit, the current Congress is looking for every conceivable way to cut spending - not increase it.

Moreover, the elephant in the room continues to be the sustainable growth rate (SGR) formula on which Medicare fees are based and which was responsible for the scheduled 25 percent reduction that would have taken effect Jan. 1 had Congress not passed a one-year reprieve. That delay was intended to provide time to consider ways to revise the SGR, a multi-billion dollar proposition.

Meanwhile, physicians' organizations nationwide, including the American Academy of Dermatology Association (AADA), are pushing Congress to repeal the Independent Payment Advisory Board (IPAB) created by the Patient Protection and Affordable Care Act, the new health reform law.

They argue that the IPAB would have authority to determine Medicare benefits and set physician payment schedules, rather than making recommendations, as is the case with MedPAC. The IPAB's decisions are to take effect unless overturned by a two-thirds majority in Congress, a provision that makes it virtually impossible for organized medicine to effectively lobby Congress against Medicare fee cuts.

But that's for next year and beyond. For this year, the AADA is not happy that Centers for Medicare and Medicaid Services (CMS) will base an initial round of e-Rx penalties on reporting during the first six months of 2011. In a letter to Department of Health and Human Services Secretary Kathleen Sebelius in December, signed by the AADA and numerous other physician organizations, CMS was asked to give physicians more time to comply "at the very least."

Currently, CMS requires the physician to report the e-prescribing code at least 10 times for applicable Medicare office visits and services for the Jan. 1 to June 30, 2011 reporting period to avoid penalties in 2012.

"The law that established the Medicare e-prescribing program ... clearly supports delaying penalties against physicians who do not e-prescribe to 2012," the letter said. "Financial penalties should only be levied in 2012 and 2013 against Medicare-eligible physicians who fail to qualify for an exemption and fail to e-prescribe 10 permissible prescriptions by the end of 2012 or by the end of 2013."