Medicolegal Issues

Medicare Modifications


Most hospitalists vividly recall Congress overriding President Bush’s July veto to avert a hefty, 10.6% cut in Medicare Part B payments to physicians. That memorable, last-minute save (instead of a pay cut, Congress increased Part B payments by 1.1%) was just a tiny part of some important legislation. The Medicare Improvements for Patients and Providers Act (MIPPA) includes myriad provisions addressing Medicare benefits, protections for low-income beneficiaries, changes for providers, data collection requirements for correcting healthcare disparities, and much more.

Hospitalists will be particularly interested in a handful of the provisions outlined in MIPPA, some of which impact them directly and others that will affect hospitals and clinical care, and still more whose outcomes remain to be seen.

Public Policy Points

Federal Help for Primary Care Physician Shortage

A House bill introduced this fall is designed to help reverse the growing shortage of primary care physicians. The Preserving Patient Access to Primary Care Act (H.R. 7192), introduced by Rep. Allyson Schwartz (D-Pa.), would require a study to recommend the designation of primary care as a shortage profession; provide recruitment and retention incentives through grants, scholarships, and loan forgiveness; encourage medical students to choose careers in primary care; establish measures to support and expand the patient centered medical home (PCMH) model of care; and proposes comprehensive reforms of payment systems under Medicare, to support, sustain, and enhance the practice of primary care.

Public Health Program Funding on Hold

Legislation providing money to the Agency for Healthcare Research and Quality (AHRQ) and the National Institutes of Health (NIH) has been postponed until 2009 in order to avoid a veto by President Bush. Bush threatened to veto domestic spending bills that exceed his FY 2009 budget request, so Democratic leaders have decided to wait to finish the appropriations bills until President-elect Barack Obama takes office. The House Labor-HHS-Education Appropriations subcommittee provided $375 million for AHRQ in its FY 2009 appropriations bill, which is an increase of $41 million over FY 2008, compared to the Senate Appropriations Committee, which would only fund AHRQ at current spending levels.

Hawaii Drops Universal Healthcare for Children

Just seven months after the 50th state implemented Keiki Care, a universal health care program for children, the state has stopped the program. As of November, the state discontinued funding for 2,000 children enrolled in the program, but Hawaii Medical Service Association (HMSA) will cover the children through the end of 2008 and families are being encouraged to apply for Medicaid coverage or enroll in the HMSA Children's Plan. According to Gov. Linda Lingle, the program was stopped because of a state budget shortfall. Hawaii faces a projected $900 million general fund deficit by 2011.

For example, MIPPA is the legislation that extends the Physician Quality Reporting Initiative (PQRI) for two years, offering a bonus payment in 2009 and 2010 of 2% (up from 1.5%) of total Medicare allowed charges. It also directs the Centers for Medicare and Medicaid Services (CMS) to publicly post the list of providers who participate in the PQRI. (See “A Permanent PQRI” in the October 2008 issue of The Hospitalist.)

MIPPA also requires CMS to establish a program to promote widespread adoption of electronic prescribing, as outlined in “e-Prescription for Success?” in the September 2008 issue of The Hospitalist. Reporting on e-prescribing is not likely to apply to hospitalists, says Bradley Flansbaum, DO, MPH, chief of hospitalist section at Lenox Hill Hospital in New York City and a member of SHM’s Public Policy Committee. “Of course, it depends on whether the hospital uses it, but no one can say whether a hospitalist will get a benefit for reporting on e-prescribing,” he says.

Lucrative Changes to E&M Codes

One provision directly impacting hospitalists is MIPPA’s changes to payments for inpatient evaluation and management codes (E&M codes). According to Laura Allendorf, SHM’s senior advisor for advocacy and government affairs, this change will result in an estimated 3% average gain in total Medicare payments to hospitalists, or $5,000 to $6,000 annually—on top of the 1.1% payment update. (It’s important to note the final 2009 physician fee schedule, published in November, could change the overall impact for individual members.) E&M payments from some private payers also could increase, since many base their fees on Medicare’s fee schedule.

Quality Research Initiatives

MIPPA requires the establishment or continuation of several quality research initiatives, designed to help CMS determine new models of efficiency of care and cost efficiency.

One of these initiatives is Patient-Centered Medical Home (PCMH), a care model that facilitates partnerships between individual patients and their personal physicians, and when appropriate, the patient’s family. Care is facilitated by registries, information technology, health information exchange, and other means to assure patients get the indicated care when and where they need and want it in a culturally and linguistically appropriate manner. MIPPA grants new funding and expanded authority for CMS’ Medical Home Demonstration Project—if certain quality and/or savings targets are achieved.

“We’ve talked a bit about Patient-Centered Medical Home,” says Dr. Flansbaum of SHM’s Public Policy Committee. “From a political standpoint, it’s a feel-good agenda item with a lot of bipartisan support. The notion of this is here, but operationalizing it—getting it to work—is an entirely different story.” By definition, PCMH will revolve around primary care physicians, and the role and responsibilities of any hospitalists involved is yet unknown—as is the reimbursement model. “This is so far away right now, it’s a notion that needs to be turned into a theory that needs to be turned into a paradigm, to paraphrase Woody Allen,” Dr. Flansbaum says.

Another initiative greenlighted by MIPPA is comparative effectiveness research, or CER. It examines the effectiveness of different therapies for a specific medical condition, or for a specific set of patients, to determine the best option. It may involve comparing competing medications, or may analyze different treatment approaches such as surgery, devices, and drug therapies. MIPPA requires the Institute of Medicine report on best practices for the review of comparative effectiveness research and the development of clinical protocols.

“Obviously, the medical device companies and the pharmaceutical companies are against this,” Dr. Flansbaum says. “But it would be helpful for physicians, because it would give some guidance in certain gray-area treatments, such as: Is this drug appropriate in treating an end-stage cancer patient?” And as far as the nation’s health care system goes, he explains, “I think we need comparative effectiveness. We can’t continue as we are—on the net, we’re going broke—our current healthcare system can’t afford to keep going.”

Not the Only Game in Town

One interesting provision of MIPPA revokes “the unique authority of the Joint Commission to deem hospitals in compliance with the Medicare Conditions of Participation,” meaning hospital compliance is an open market—subject to approval from CMS, of course.

Some of the provisions in MIPPA, such as the quality research initiatives, could end up shaping the future of healthcare.

“The Joint Commission has been the gold standard for hospitals for a long, long time,” Dr. Flansbaum points out. “Now that they’ve opened that up, DNV (Det Norske Veritas Healthcare, Inc.) [for example], can compete with the Joint Commission to certify hospitals.”

What will this mean for hospitals? Probably not much in the short term. “I believe only 15 hospitals have DNV certifications, and that all of those also have a Joint Commission certification,” Dr. Flansbaum says, adding “[DNV and the Joint Commission] have a different approach; it’s like the ACT and the SAT. Both are used for college entrance exams, but the SAT is still mostly the gold standard, like the Joint Commission. But who knows? That could change … and if it does, well, competition is good.”

Some of the MIPPA provisions, such as the quality research initiatives, could end up shaping the future of healthcare. Others, such as the continuation of PQRI, may lead to new payment models for physicians.

Only time will tell which provisions will truly improve efficiency and costs—and which will impact hospital medicine in particular. TH

Jane Jerrard is a medical writer based in Chicago.

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