Jennifer Silverman

Edgar Mandeville, M.D., had to step out of his traditional role as an ob.gyn. when he responded to a call from a colleague to care for displaced patients in Baton Rouge, La., following Hurricane Katrina.

“We had 6,000 patients under one roof at one point, although the numbers were always in flux,” said Dr. Mandeville, who traveled from New York City to volunteer for a week at the Baton Rouge River Center.

For the first few days, he did standard emergency department work and primary care work, “taking care of people who had run out of their medications, who had gastroenteritis, upper respiratory infections, asthma,” he said in a recent interview.

The shelter was able to establish an ob.gyn. clinic when things settled down a few days later. Among the displaced pregnant women he cared for, several with severe preeclampsia had to be sent to a local hospital.

One patient went into labor, “so I rode with her in an ambulance to the hospital,” he said. On average, he worked from 9 p.m. to 9 a.m. each day. “I can't tell you how many people I saw daily.”

The goal was to get people out of the shelter as quickly as possible, and place them with relatives in other parts of the country or in resettlement areas, he said. Countless other ob.gyns. have been offering their practices or volunteer services to displaced patients in the Gulf Coast region.

At the University of Mississippi Medical Center in Jackson, James Martin, M.D., said he and other ob.gyns. “have cared for quite a few evacuees, sometimes keeping a few in-house for a few extra days until they could find housing or return home.” In one preparatory effort, his staff picked up several patients by helicopter in the 24–36 hours before Hurricane Katrina made landfall.

In addition, Dr. Martin helped place the patients of a fellow ob.gyn. with a group in Oxford, Miss., when that physician and her family fled to Atlanta.

Christopher Wiggs, M.D., an ob.gyn. who works at Woman's Hospital at River Oaks, River Oaks Hospital, and St. Dominic Hospital in Jackson, has added patients to his daily roster since Katrina. “We'll probably see that [number] increase a bit,” he said in an interview. “There's been more families absorbed into the Jackson area. A lot of people are calling this home for a while.”

As far as Dr. Wiggs knows, the majority of ob.gyn. practices in the Jackson area have taken in displaced patients from New Orleans and other places affected by the storm, Dr. Wiggs said. Many of these evacuated patients have been admitted through referrals of existing patients. One of the patients in his practice, for example, referred a sister who had come to stay with family.

For the past month, his medical practice has been on “referred call,” delivering babies and seeing patients who need ob.gyn. care. One of the patients whose baby he delivered was a woman from Ocean Springs, Miss., located east of Biloxi, who was at term when the hurricane hit.

“Most of the patients are pregnant, but several needed birth control pills, so we called in prescriptions,” he noted. Another evacuee who was going to settle in Jackson for a while was due for an annual checkup, so Dr. Wiggs gave her a yearly exam and gave her oral contraceptives.

The insurance status of these patients is uncertain “because every situation is different.” At least for the Louisiana patients, providers in Mississippi probably would be taking care of them out of network, as “Louisiana has a heavy managed care environment, whereas Mississippi does not,” he said.

Dr. Wiggs has seen some advertisements in newspapers announcing arrangements where Louisiana Medicaid and other insurance companies are waiving out-of-network penalties.

In the meantime, “we've taken care of folks who just have shown up. That's part of our job in a crisis like this.”

Dr. Wiggs has heard many stories from displaced patients about their homes being under water, about losing all of their possessions.

Others were more fortunate.

One patient who gave birth to her baby under Dr. Wiggs' care after the storm “was uplifted from her home, but her everyday life should get back to normal because her house is still intact.”

Theories exist that high levels of stress or physical problems such as dehydration can trigger a preterm labor, Dr. Wiggs said. Psychological issues factor significantly into pregnancy, but it's hard to measure, he said. So far, in his experience, most of these displaced patients have had a good attitude, despite the fact that many have lost their homes, he said. “They're happy to be in a place where they can have medical care provided for them.”

March of Dimes Eyes Long-Term Needs

The March of Dimes, which has been providing resources to sick and premature babies and pregnant women affected by Katrina, anticipates a number of long-term needs for these patients over the next 3–12 months. These include:

▸ The number of babies born prematurely is expected to rise, and these babies will require specialized neonatal intensive care units (NICUs), equipment, and care.

▸ A potentially large increase in the number of births in towns and cities such as Baton Rouge and Jackson that are housing evacuees is expected; this will strain existing facilities and services.

▸ More outreach workers and trained health professionals will need to be organized and deployed to provide prenatal care and counseling for displaced pregnant women.

▸ Updated information on available services for pregnant women and families will need to be provided as situations change; multivitamins with folic acid for women of childbearing age and pregnant women to reduce the risk of birth defects will also be needed.

▸ Infant and child vaccines will have to be purchased for shelters and clinics.

The voluntary health agency has been assisting hospitals, shelters, and towns throughout Louisiana and Mississippi. In one effort, about 100 sick and premature babies from hospitals in New Orleans and Mississippi were airlifted or transported to NICUs at Women's Hospital in Baton Rouge, the site of a new March of Dimes NICU Family Support project. The hospital also asked the March of Dimes for help with supplies such as formula and diapers for healthy babies and those being discharged.

The agency also activated and expanded its national network of 171 “Stork's Nests,” a cooperative program with Zeta Phi Beta Sorority. The program provides pregnant women with maternity clothes, baby clothes, and furniture at little or no cost; it will also enable women living in shelters and temporary housing to access health education seminars on topics such as prenatal care, nutrition, infant care, and parenting.

Edgar Mandeville, M.D., had to step out of his traditional role as an ob.gyn. when he responded to a call from a colleague to care for displaced patients in Baton Rouge, La., following Hurricane Katrina.

“We had 6,000 patients under one roof at one point, although the numbers were always in flux,” said Dr. Mandeville, who traveled from New York City to volunteer for a week at the Baton Rouge River Center.

For the first few days, he did standard emergency department work and primary care work, “taking care of people who had run out of their medications, who had gastroenteritis, upper respiratory infections, asthma,” he said in a recent interview.

The shelter was able to establish an ob.gyn. clinic when things settled down a few days later. Among the displaced pregnant women he cared for, several with severe preeclampsia had to be sent to a local hospital.

One patient went into labor, “so I rode with her in an ambulance to the hospital,” he said. On average, he worked from 9 p.m. to 9 a.m. each day. “I can't tell you how many people I saw daily.”

The goal was to get people out of the shelter as quickly as possible, and place them with relatives in other parts of the country or in resettlement areas, he said. Countless other ob.gyns. have been offering their practices or volunteer services to displaced patients in the Gulf Coast region.

At the University of Mississippi Medical Center in Jackson, James Martin, M.D., said he and other ob.gyns. “have cared for quite a few evacuees, sometimes keeping a few in-house for a few extra days until they could find housing or return home.” In one preparatory effort, his staff picked up several patients by helicopter in the 24–36 hours before Hurricane Katrina made landfall.

In addition, Dr. Martin helped place the patients of a fellow ob.gyn. with a group in Oxford, Miss., when that physician and her family fled to Atlanta.

Christopher Wiggs, M.D., an ob.gyn. who works at Woman's Hospital at River Oaks, River Oaks Hospital, and St. Dominic Hospital in Jackson, has added patients to his daily roster since Katrina. “We'll probably see that [number] increase a bit,” he said in an interview. “There's been more families absorbed into the Jackson area. A lot of people are calling this home for a while.”

As far as Dr. Wiggs knows, the majority of ob.gyn. practices in the Jackson area have taken in displaced patients from New Orleans and other places affected by the storm, Dr. Wiggs said. Many of these evacuated patients have been admitted through referrals of existing patients. One of the patients in his practice, for example, referred a sister who had come to stay with family.

For the past month, his medical practice has been on “referred call,” delivering babies and seeing patients who need ob.gyn. care. One of the patients whose baby he delivered was a woman from Ocean Springs, Miss., located east of Biloxi, who was at term when the hurricane hit.

“Most of the patients are pregnant, but several needed birth control pills, so we called in prescriptions,” he noted. Another evacuee who was going to settle in Jackson for a while was due for an annual checkup, so Dr. Wiggs gave her a yearly exam and gave her oral contraceptives.

The insurance status of these patients is uncertain “because every situation is different.” At least for the Louisiana patients, providers in Mississippi probably would be taking care of them out of network, as “Louisiana has a heavy managed care environment, whereas Mississippi does not,” he said.

Dr. Wiggs has seen some advertisements in newspapers announcing arrangements where Louisiana Medicaid and other insurance companies are waiving out-of-network penalties.

In the meantime, “we've taken care of folks who just have shown up. That's part of our job in a crisis like this.”

Dr. Wiggs has heard many stories from displaced patients about their homes being under water, about losing all of their possessions.

Others were more fortunate.

One patient who gave birth to her baby under Dr. Wiggs' care after the storm “was uplifted from her home, but her everyday life should get back to normal because her house is still intact.”

Theories exist that high levels of stress or physical problems such as dehydration can trigger a preterm labor, Dr. Wiggs said. Psychological issues factor significantly into pregnancy, but it's hard to measure, he said. So far, in his experience, most of these displaced patients have had a good attitude, despite the fact that many have lost their homes, he said. “They're happy to be in a place where they can have medical care provided for them.”

March of Dimes Eyes Long-Term Needs

The March of Dimes, which has been providing resources to sick and premature babies and pregnant women affected by Katrina, anticipates a number of long-term needs for these patients over the next 3–12 months. These include:

▸ The number of babies born prematurely is expected to rise, and these babies will require specialized neonatal intensive care units (NICUs), equipment, and care.

▸ A potentially large increase in the number of births in towns and cities such as Baton Rouge and Jackson that are housing evacuees is expected; this will strain existing facilities and services.

▸ More outreach workers and trained health professionals will need to be organized and deployed to provide prenatal care and counseling for displaced pregnant women.

▸ Updated information on available services for pregnant women and families will need to be provided as situations change; multivitamins with folic acid for women of childbearing age and pregnant women to reduce the risk of birth defects will also be needed.

▸ Infant and child vaccines will have to be purchased for shelters and clinics.

The voluntary health agency has been assisting hospitals, shelters, and towns throughout Louisiana and Mississippi. In one effort, about 100 sick and premature babies from hospitals in New Orleans and Mississippi were airlifted or transported to NICUs at Women's Hospital in Baton Rouge, the site of a new March of Dimes NICU Family Support project. The hospital also asked the March of Dimes for help with supplies such as formula and diapers for healthy babies and those being discharged.

The agency also activated and expanded its national network of 171 “Stork's Nests,” a cooperative program with Zeta Phi Beta Sorority. The program provides pregnant women with maternity clothes, baby clothes, and furniture at little or no cost; it will also enable women living in shelters and temporary housing to access health education seminars on topics such as prenatal care, nutrition, infant care, and parenting.

Edgar Mandeville, M.D., had to step out of his traditional role as an ob.gyn. when he responded to a call from a colleague to care for displaced patients in Baton Rouge, La., following Hurricane Katrina.

“We had 6,000 patients under one roof at one point, although the numbers were always in flux,” said Dr. Mandeville, who traveled from New York City to volunteer for a week at the Baton Rouge River Center.

For the first few days, he did standard emergency department work and primary care work, “taking care of people who had run out of their medications, who had gastroenteritis, upper respiratory infections, asthma,” he said in a recent interview.

The shelter was able to establish an ob.gyn. clinic when things settled down a few days later. Among the displaced pregnant women he cared for, several with severe preeclampsia had to be sent to a local hospital.

One patient went into labor, “so I rode with her in an ambulance to the hospital,” he said. On average, he worked from 9 p.m. to 9 a.m. each day. “I can't tell you how many people I saw daily.”

The goal was to get people out of the shelter as quickly as possible, and place them with relatives in other parts of the country or in resettlement areas, he said. Countless other ob.gyns. have been offering their practices or volunteer services to displaced patients in the Gulf Coast region.

At the University of Mississippi Medical Center in Jackson, James Martin, M.D., said he and other ob.gyns. “have cared for quite a few evacuees, sometimes keeping a few in-house for a few extra days until they could find housing or return home.” In one preparatory effort, his staff picked up several patients by helicopter in the 24–36 hours before Hurricane Katrina made landfall.

In addition, Dr. Martin helped place the patients of a fellow ob.gyn. with a group in Oxford, Miss., when that physician and her family fled to Atlanta.

Christopher Wiggs, M.D., an ob.gyn. who works at Woman's Hospital at River Oaks, River Oaks Hospital, and St. Dominic Hospital in Jackson, has added patients to his daily roster since Katrina. “We'll probably see that [number] increase a bit,” he said in an interview. “There's been more families absorbed into the Jackson area. A lot of people are calling this home for a while.”

As far as Dr. Wiggs knows, the majority of ob.gyn. practices in the Jackson area have taken in displaced patients from New Orleans and other places affected by the storm, Dr. Wiggs said. Many of these evacuated patients have been admitted through referrals of existing patients. One of the patients in his practice, for example, referred a sister who had come to stay with family.

For the past month, his medical practice has been on “referred call,” delivering babies and seeing patients who need ob.gyn. care. One of the patients whose baby he delivered was a woman from Ocean Springs, Miss., located east of Biloxi, who was at term when the hurricane hit.

“Most of the patients are pregnant, but several needed birth control pills, so we called in prescriptions,” he noted. Another evacuee who was going to settle in Jackson for a while was due for an annual checkup, so Dr. Wiggs gave her a yearly exam and gave her oral contraceptives.

The insurance status of these patients is uncertain “because every situation is different.” At least for the Louisiana patients, providers in Mississippi probably would be taking care of them out of network, as “Louisiana has a heavy managed care environment, whereas Mississippi does not,” he said.

Dr. Wiggs has seen some advertisements in newspapers announcing arrangements where Louisiana Medicaid and other insurance companies are waiving out-of-network penalties.

In the meantime, “we've taken care of folks who just have shown up. That's part of our job in a crisis like this.”

Dr. Wiggs has heard many stories from displaced patients about their homes being under water, about losing all of their possessions.

Others were more fortunate.

One patient who gave birth to her baby under Dr. Wiggs' care after the storm “was uplifted from her home, but her everyday life should get back to normal because her house is still intact.”

Theories exist that high levels of stress or physical problems such as dehydration can trigger a preterm labor, Dr. Wiggs said. Psychological issues factor significantly into pregnancy, but it's hard to measure, he said. So far, in his experience, most of these displaced patients have had a good attitude, despite the fact that many have lost their homes, he said. “They're happy to be in a place where they can have medical care provided for them.”

March of Dimes Eyes Long-Term Needs

The March of Dimes, which has been providing resources to sick and premature babies and pregnant women affected by Katrina, anticipates a number of long-term needs for these patients over the next 3–12 months. These include:

▸ The number of babies born prematurely is expected to rise, and these babies will require specialized neonatal intensive care units (NICUs), equipment, and care.

▸ A potentially large increase in the number of births in towns and cities such as Baton Rouge and Jackson that are housing evacuees is expected; this will strain existing facilities and services.

▸ More outreach workers and trained health professionals will need to be organized and deployed to provide prenatal care and counseling for displaced pregnant women.

▸ Updated information on available services for pregnant women and families will need to be provided as situations change; multivitamins with folic acid for women of childbearing age and pregnant women to reduce the risk of birth defects will also be needed.

▸ Infant and child vaccines will have to be purchased for shelters and clinics.

The voluntary health agency has been assisting hospitals, shelters, and towns throughout Louisiana and Mississippi. In one effort, about 100 sick and premature babies from hospitals in New Orleans and Mississippi were airlifted or transported to NICUs at Women's Hospital in Baton Rouge, the site of a new March of Dimes NICU Family Support project. The hospital also asked the March of Dimes for help with supplies such as formula and diapers for healthy babies and those being discharged.

The agency also activated and expanded its national network of 171 “Stork's Nests,” a cooperative program with Zeta Phi Beta Sorority. The program provides pregnant women with maternity clothes, baby clothes, and furniture at little or no cost; it will also enable women living in shelters and temporary housing to access health education seminars on topics such as prenatal care, nutrition, infant care, and parenting.

WASHINGTON — The current process for valuing physician services may result in inaccurate pricing and needs to be reviewed, researchers said during a meeting of the Medicare Payment Advisory Commission.

Relative value units (RVUs) are assigned to services in the physician fee schedule to determine how payment rates vary, one service relative to another. The Centers for Medicare and Medicaid Services reviews and modifies the RVUs for selected services based on recommendations from the RVS Update Committee (RUC), a panel made up of representatives of national and specialty medical societies. CMS usually accepts 90% of the committee's recommendations.

By law, RVUs are reviewed every 5 years. The next review is scheduled for completion in 2007.

There are problems with this review process, much of which involves the subjective nature of measuring physician work, Dana Kelley, a research contractor to the Medicare Payment Advisory Commission (MedPAC), told the advisory committee. “The physicians themselves are intimately involved in setting the RVUs [but at the same time] have a financial interest in how those services are weighted,” she said. This introduces the possibility of biased reporting.

Specialty societies, which have much to gain by RUC decisions, can submit “compelling arguments” that the values are incorrect, Ms. Kelley said. While the RUC has safeguards to make sure that some specialties don't dominate the review process, “specialization remains an important issue.”

Physicians who perform a specific service are often surveyed to determine the “weight” of a particular service. In answering these surveys, physicians obviously have a financial incentive to indicate that their service should be highly weighted, she said.

The assumption that current RVUs are accurate ignores the fact that they may change over time, Ms. Kelley said. “Even starting from the premise that it's set correctly, the way a service is performed can change its value.”

Also, there is a strong bias in favor of identifying and correcting undervalued codes, she said. “Previous 5-year reviews have led to substantially more increases than decreases in RVUs.” This results in passive devaluation of some codes.

Inaccurate payments for physician services can distort the market for health care services, said Kevin Hayes, Ph.D., a MedPAC research director. “It can boost volume for certain services inappropriately, undermine access to care, and make some specialties more financially attractive than others.”

A lot of news has circulated “on how maldistribution of payments is affecting the career choices of young physicians,” observed Ray E. Stowers, D.O., a member of the commission. “It really does create a long-term problem of decreasing the number of primary care physicians in the country, and eventually affecting the access to care of Medicare beneficiaries and increasing the cost of care to the Medicare system.”

While it's easy to criticize the RUC, several MedPAC members cautioned that there are few alternatives to the system. “We have to come up with an alternative. We have a chance of doing something a lot better,” Alan R. Nelson, M.D., a member of the commission, acknowledged.

However, even if you can get the pricing “exactly accurate that day,” the evidence for inaccuracies isn't going to come for a while, he said. Changes in the way medicine is practiced are going to create some distortion. “It's never going to be perfect because it's a rolling ball game. We need to measure that in our perceived criticism of the RUC.”

In light of concerns about inaccurate payments, Dr. Hayes said MedPAC plans to “address the topic of valuing physician services in detail,” along with other issues, such as adjusting payments geographically, revisiting the boundaries of payment localities, and determining practice expense payments in the fee schedule.

The RUC plans to make its recommendations on physician RVUs at the end of October, Ms. Kelley said. CMS would then issue a notice of the proposed rule-making next spring on the valuation of physician services, and a final rule would be issued in January 2007, to set values for the following review cycle.

WASHINGTON — The current process for valuing physician services may result in inaccurate pricing and needs to be reviewed, researchers said during a meeting of the Medicare Payment Advisory Commission.

Relative value units (RVUs) are assigned to services in the physician fee schedule to determine how payment rates vary, one service relative to another. The Centers for Medicare and Medicaid Services reviews and modifies the RVUs for selected services based on recommendations from the RVS Update Committee (RUC), a panel made up of representatives of national and specialty medical societies. CMS usually accepts 90% of the committee's recommendations.

By law, RVUs are reviewed every 5 years. The next review is scheduled for completion in 2007.

There are problems with this review process, much of which involves the subjective nature of measuring physician work, Dana Kelley, a research contractor to the Medicare Payment Advisory Commission (MedPAC), told the advisory committee. “The physicians themselves are intimately involved in setting the RVUs [but at the same time] have a financial interest in how those services are weighted,” she said. This introduces the possibility of biased reporting.

Specialty societies, which have much to gain by RUC decisions, can submit “compelling arguments” that the values are incorrect, Ms. Kelley said. While the RUC has safeguards to make sure that some specialties don't dominate the review process, “specialization remains an important issue.”

Physicians who perform a specific service are often surveyed to determine the “weight” of a particular service. In answering these surveys, physicians obviously have a financial incentive to indicate that their service should be highly weighted, she said.

The assumption that current RVUs are accurate ignores the fact that they may change over time, Ms. Kelley said. “Even starting from the premise that it's set correctly, the way a service is performed can change its value.”

Also, there is a strong bias in favor of identifying and correcting undervalued codes, she said. “Previous 5-year reviews have led to substantially more increases than decreases in RVUs.” This results in passive devaluation of some codes.

Inaccurate payments for physician services can distort the market for health care services, said Kevin Hayes, Ph.D., a MedPAC research director. “It can boost volume for certain services inappropriately, undermine access to care, and make some specialties more financially attractive than others.”

A lot of news has circulated “on how maldistribution of payments is affecting the career choices of young physicians,” observed Ray E. Stowers, D.O., a member of the commission. “It really does create a long-term problem of decreasing the number of primary care physicians in the country, and eventually affecting the access to care of Medicare beneficiaries and increasing the cost of care to the Medicare system.”

While it's easy to criticize the RUC, several MedPAC members cautioned that there are few alternatives to the system. “We have to come up with an alternative. We have a chance of doing something a lot better,” Alan R. Nelson, M.D., a member of the commission, acknowledged.

However, even if you can get the pricing “exactly accurate that day,” the evidence for inaccuracies isn't going to come for a while, he said. Changes in the way medicine is practiced are going to create some distortion. “It's never going to be perfect because it's a rolling ball game. We need to measure that in our perceived criticism of the RUC.”

In light of concerns about inaccurate payments, Dr. Hayes said MedPAC plans to “address the topic of valuing physician services in detail,” along with other issues, such as adjusting payments geographically, revisiting the boundaries of payment localities, and determining practice expense payments in the fee schedule.

The RUC plans to make its recommendations on physician RVUs at the end of October, Ms. Kelley said. CMS would then issue a notice of the proposed rule-making next spring on the valuation of physician services, and a final rule would be issued in January 2007, to set values for the following review cycle.

WASHINGTON — The current process for valuing physician services may result in inaccurate pricing and needs to be reviewed, researchers said during a meeting of the Medicare Payment Advisory Commission.

Relative value units (RVUs) are assigned to services in the physician fee schedule to determine how payment rates vary, one service relative to another. The Centers for Medicare and Medicaid Services reviews and modifies the RVUs for selected services based on recommendations from the RVS Update Committee (RUC), a panel made up of representatives of national and specialty medical societies. CMS usually accepts 90% of the committee's recommendations.

By law, RVUs are reviewed every 5 years. The next review is scheduled for completion in 2007.

There are problems with this review process, much of which involves the subjective nature of measuring physician work, Dana Kelley, a research contractor to the Medicare Payment Advisory Commission (MedPAC), told the advisory committee. “The physicians themselves are intimately involved in setting the RVUs [but at the same time] have a financial interest in how those services are weighted,” she said. This introduces the possibility of biased reporting.

Specialty societies, which have much to gain by RUC decisions, can submit “compelling arguments” that the values are incorrect, Ms. Kelley said. While the RUC has safeguards to make sure that some specialties don't dominate the review process, “specialization remains an important issue.”

Physicians who perform a specific service are often surveyed to determine the “weight” of a particular service. In answering these surveys, physicians obviously have a financial incentive to indicate that their service should be highly weighted, she said.

The assumption that current RVUs are accurate ignores the fact that they may change over time, Ms. Kelley said. “Even starting from the premise that it's set correctly, the way a service is performed can change its value.”

Also, there is a strong bias in favor of identifying and correcting undervalued codes, she said. “Previous 5-year reviews have led to substantially more increases than decreases in RVUs.” This results in passive devaluation of some codes.

Inaccurate payments for physician services can distort the market for health care services, said Kevin Hayes, Ph.D., a MedPAC research director. “It can boost volume for certain services inappropriately, undermine access to care, and make some specialties more financially attractive than others.”

A lot of news has circulated “on how maldistribution of payments is affecting the career choices of young physicians,” observed Ray E. Stowers, D.O., a member of the commission. “It really does create a long-term problem of decreasing the number of primary care physicians in the country, and eventually affecting the access to care of Medicare beneficiaries and increasing the cost of care to the Medicare system.”

While it's easy to criticize the RUC, several MedPAC members cautioned that there are few alternatives to the system. “We have to come up with an alternative. We have a chance of doing something a lot better,” Alan R. Nelson, M.D., a member of the commission, acknowledged.

However, even if you can get the pricing “exactly accurate that day,” the evidence for inaccuracies isn't going to come for a while, he said. Changes in the way medicine is practiced are going to create some distortion. “It's never going to be perfect because it's a rolling ball game. We need to measure that in our perceived criticism of the RUC.”

In light of concerns about inaccurate payments, Dr. Hayes said MedPAC plans to “address the topic of valuing physician services in detail,” along with other issues, such as adjusting payments geographically, revisiting the boundaries of payment localities, and determining practice expense payments in the fee schedule.

The RUC plans to make its recommendations on physician RVUs at the end of October, Ms. Kelley said. CMS would then issue a notice of the proposed rule-making next spring on the valuation of physician services, and a final rule would be issued in January 2007, to set values for the following review cycle.

WASHINGTON — Researchers with the Medicare Payment Advisory Commission are measuring the quality of care delivered by physicians as part of an overall analysis of physician resource use.

“We hope to look at variation in quality performance, to do this across conditions, regions, and to some extent across specialties,” Karen Milgate, a research director for the commission (MedPAC), said at a recent commission meeting. “We also hope to identify any gaps in quality measurement development that we can.”

The ongoing research supports the commission's long-term goal of identifying more “efficient” providers, as a tool to encourage greater efficiency in care.

Variation in resource use may include cost of a service, types of services provided, or types of specialists that patients see, Ms. Milgate said in an interview. It could also mean variation in resource use across regions. Using preliminary computer models, MedPAC researchers found variation in the cost of certain conditions.

For example, treatment of end-stage renal disease is fairly well defined, as the patient either requires long-term dialysis or a kidney transplant. For that reason, average versus median costs for end-stage renal disease episodes don't vary that much, said MedPAC researcher Niall Brennan.

Significantly more variation in cost was seen in the care of hypertension, diabetes, and heart failure. In areas where there is tremendous variation in resource use, “we might want to [see] if there are any guidelines in those areas that would better help us understand appropriate resource use levels,” Ms. Milgate said.

MedPAC could identify conditions with variation in resource use where there might also be high variation in quality, Ms. Milgate said. Those might become priority areas for coordination of care.

Researchers are hoping to address questions such as “how do you attribute the care of a particular beneficiary to a specific physician?” she said. The minimum number of cases needed to get a reliable measurement, and who you actually compare a physician's performance with, are other considerations, Ms. Milgate said. “What other physicians see similar patients to that physician?”

Ms. Milgate clarified that these claims-based measures would not necessarily be used in a pay-for-performance system.

“That's a pretty easy decision because we don't have that information” yet, she said. Researchers are planning to base this analysis on currently available information: claims data.

More than 35 indicators on conditions important to Medicare will be used to measure quality, Ms. Milgate said. “Most of them are primarily what we've talked about before as process measures. For example, for beneficiaries with coronary artery disease, did they have an annual lipid profile?” Outcomes measures would also be used. For example, for beneficiaries with diabetes, what proportion of them ended up in the hospital with short- or long-term complications that were related to their diabetic conditions, she said.

MedPAC earlier this year advised the Department of Health and Human Services to test different types of provider payment differentials, which would essentially offer monetary rewards—bonuses, for example—for meeting certain goals on health care quality.

MedPAC Chair Glenn M. Hackbarth, J.D., said he hoped that Congress was prepared to move ahead with pay-for-performance legislation. Several bills are pending to link relief from the sustainable growth rate formula to the implementation of a pay-for-performance system for physicians, he said.

“Obviously we support both ends of that bargain. We have argued that in order to assure access to quality of care, there does need to be some relief from the SGR. But at the same time, we think that it should be not just more money into the existing system, but one that consistently, in a more focused way, rewards good practice and quality of care.”

WASHINGTON — Researchers with the Medicare Payment Advisory Commission are measuring the quality of care delivered by physicians as part of an overall analysis of physician resource use.

“We hope to look at variation in quality performance, to do this across conditions, regions, and to some extent across specialties,” Karen Milgate, a research director for the commission (MedPAC), said at a recent commission meeting. “We also hope to identify any gaps in quality measurement development that we can.”

The ongoing research supports the commission's long-term goal of identifying more “efficient” providers, as a tool to encourage greater efficiency in care.

Variation in resource use may include cost of a service, types of services provided, or types of specialists that patients see, Ms. Milgate said in an interview. It could also mean variation in resource use across regions. Using preliminary computer models, MedPAC researchers found variation in the cost of certain conditions.

For example, treatment of end-stage renal disease is fairly well defined, as the patient either requires long-term dialysis or a kidney transplant. For that reason, average versus median costs for end-stage renal disease episodes don't vary that much, said MedPAC researcher Niall Brennan.

Significantly more variation in cost was seen in the care of hypertension, diabetes, and heart failure. In areas where there is tremendous variation in resource use, “we might want to [see] if there are any guidelines in those areas that would better help us understand appropriate resource use levels,” Ms. Milgate said.

MedPAC could identify conditions with variation in resource use where there might also be high variation in quality, Ms. Milgate said. Those might become priority areas for coordination of care.

Researchers are hoping to address questions such as “how do you attribute the care of a particular beneficiary to a specific physician?” she said. The minimum number of cases needed to get a reliable measurement, and who you actually compare a physician's performance with, are other considerations, Ms. Milgate said. “What other physicians see similar patients to that physician?”

Ms. Milgate clarified that these claims-based measures would not necessarily be used in a pay-for-performance system.

“That's a pretty easy decision because we don't have that information” yet, she said. Researchers are planning to base this analysis on currently available information: claims data.

More than 35 indicators on conditions important to Medicare will be used to measure quality, Ms. Milgate said. “Most of them are primarily what we've talked about before as process measures. For example, for beneficiaries with coronary artery disease, did they have an annual lipid profile?” Outcomes measures would also be used. For example, for beneficiaries with diabetes, what proportion of them ended up in the hospital with short- or long-term complications that were related to their diabetic conditions, she said.

MedPAC earlier this year advised the Department of Health and Human Services to test different types of provider payment differentials, which would essentially offer monetary rewards—bonuses, for example—for meeting certain goals on health care quality.

MedPAC Chair Glenn M. Hackbarth, J.D., said he hoped that Congress was prepared to move ahead with pay-for-performance legislation. Several bills are pending to link relief from the sustainable growth rate formula to the implementation of a pay-for-performance system for physicians, he said.

“Obviously we support both ends of that bargain. We have argued that in order to assure access to quality of care, there does need to be some relief from the SGR. But at the same time, we think that it should be not just more money into the existing system, but one that consistently, in a more focused way, rewards good practice and quality of care.”

WASHINGTON — Researchers with the Medicare Payment Advisory Commission are measuring the quality of care delivered by physicians as part of an overall analysis of physician resource use.

“We hope to look at variation in quality performance, to do this across conditions, regions, and to some extent across specialties,” Karen Milgate, a research director for the commission (MedPAC), said at a recent commission meeting. “We also hope to identify any gaps in quality measurement development that we can.”

The ongoing research supports the commission's long-term goal of identifying more “efficient” providers, as a tool to encourage greater efficiency in care.

Variation in resource use may include cost of a service, types of services provided, or types of specialists that patients see, Ms. Milgate said in an interview. It could also mean variation in resource use across regions. Using preliminary computer models, MedPAC researchers found variation in the cost of certain conditions.

For example, treatment of end-stage renal disease is fairly well defined, as the patient either requires long-term dialysis or a kidney transplant. For that reason, average versus median costs for end-stage renal disease episodes don't vary that much, said MedPAC researcher Niall Brennan.

Significantly more variation in cost was seen in the care of hypertension, diabetes, and heart failure. In areas where there is tremendous variation in resource use, “we might want to [see] if there are any guidelines in those areas that would better help us understand appropriate resource use levels,” Ms. Milgate said.

MedPAC could identify conditions with variation in resource use where there might also be high variation in quality, Ms. Milgate said. Those might become priority areas for coordination of care.

Researchers are hoping to address questions such as “how do you attribute the care of a particular beneficiary to a specific physician?” she said. The minimum number of cases needed to get a reliable measurement, and who you actually compare a physician's performance with, are other considerations, Ms. Milgate said. “What other physicians see similar patients to that physician?”

Ms. Milgate clarified that these claims-based measures would not necessarily be used in a pay-for-performance system.

“That's a pretty easy decision because we don't have that information” yet, she said. Researchers are planning to base this analysis on currently available information: claims data.

More than 35 indicators on conditions important to Medicare will be used to measure quality, Ms. Milgate said. “Most of them are primarily what we've talked about before as process measures. For example, for beneficiaries with coronary artery disease, did they have an annual lipid profile?” Outcomes measures would also be used. For example, for beneficiaries with diabetes, what proportion of them ended up in the hospital with short- or long-term complications that were related to their diabetic conditions, she said.

MedPAC earlier this year advised the Department of Health and Human Services to test different types of provider payment differentials, which would essentially offer monetary rewards—bonuses, for example—for meeting certain goals on health care quality.

MedPAC Chair Glenn M. Hackbarth, J.D., said he hoped that Congress was prepared to move ahead with pay-for-performance legislation. Several bills are pending to link relief from the sustainable growth rate formula to the implementation of a pay-for-performance system for physicians, he said.

“Obviously we support both ends of that bargain. We have argued that in order to assure access to quality of care, there does need to be some relief from the SGR. But at the same time, we think that it should be not just more money into the existing system, but one that consistently, in a more focused way, rewards good practice and quality of care.”

WASHINGTON — The current process for valuing physician services may result in inaccurate pricing and needs to be reviewed, researchers said during a meeting of the Medicare Payment Advisory Commission.

Relative value units (RVUs) are assigned to services in the physician fee schedule to determine how payment rates vary, one service relative to another. The Centers for Medicare and Medicaid Services reviews and modifies the RVUs for selected services based on recommendations from the RVS Update Committee (RUC), a panel made up of representatives of national and specialty medical societies. CMS usually accepts 90% of the committee's recommendations.

By law, RVUs are reviewed every 5 years. The next review is scheduled for completion in 2007.

There are problems with this review process, much of which involves the subjective nature of measuring physician work, Dana Kelley, a research contractor to the Medicare Payment Advisory Commission (MedPAC), told the advisory committee.

“The physicians themselves are intimately involved in setting the RVUs [but at the same time] have a financial interest in how those services are weighted,” she said. This introduces the possibility of biased reporting.

Specialty societies, which have much to gain by RUC decisions, can submit “compelling arguments” that the values are incorrect, Ms. Kelley said. While the RUC has safeguards to make sure that some specialties don't dominate the review process, “specialization remains an important issue.”

Physicians who perform a specific service are often surveyed to determine the “weight” of a particular service. In answering these surveys, physicians obviously have a financial incentive to indicate that their service should be highly weighted, she said.

The assumption that current RVUs are accurate ignores the fact that they may change over time, Ms. Kelley said. “Even starting from the premise that it's set correctly, the way a service is performed can change its value.”

Also, there is a strong bias in favor of identifying and correcting undervalued codes, she said. “Previous 5-year reviews have led to substantially more increases than decreases in RVUs.” This results in passive devaluation of some codes.

Inaccurate payments for physician services can distort the market for health care services, said Kevin Hayes, Ph.D., a MedPAC research director. “It can boost volume for certain services inappropriately, undermine access to care, and make some specialties more financially attractive than others,” he said.

A lot of news has circulated “on how maldistribution of payments is affecting the career choices of young physicians,” noted Ray E. Stowers, D.O., a commission member. “It really does create a long-term problem of decreasing the number of primary care physicians in the country, and eventually affecting the access to care of Medicare beneficiaries and increasing the cost of care to the Medicare system.”

While it's easy to criticize the RUC, several MedPAC members cautioned that there are few alternatives to the system. “We have to come up with an alternative. We have a chance of doing something a lot better,” Alan R. Nelson, M.D., a member of the commission, acknowledged.

However, even if you can get the pricing “exactly accurate that day,” the evidence for inaccuracies isn't going to come for a while, he said. Changes in the way medicine is practiced are going to create some distortion. “It's never going to be perfect because it's a rolling ball game. We need to measure that in our perceived criticism of the RUC.”

In light of concerns about inaccurate payments, Dr. Hayes said MedPAC plans to “address the topic of valuing physician services in detail,” along with other issues, such as adjusting payments geographically, revisiting the boundaries of payment localities, and determining practice expense payments in the fee schedule.

The RUC plans to make its recommendations on physician RVUs at the end of October, Ms. Kelley said. CMS would then issue a notice of the proposed rule-making next spring on the valuation of physician services, and a final rule would be issued in January 2007, to set values for the following review cycle.

WASHINGTON — The current process for valuing physician services may result in inaccurate pricing and needs to be reviewed, researchers said during a meeting of the Medicare Payment Advisory Commission.

Relative value units (RVUs) are assigned to services in the physician fee schedule to determine how payment rates vary, one service relative to another. The Centers for Medicare and Medicaid Services reviews and modifies the RVUs for selected services based on recommendations from the RVS Update Committee (RUC), a panel made up of representatives of national and specialty medical societies. CMS usually accepts 90% of the committee's recommendations.

By law, RVUs are reviewed every 5 years. The next review is scheduled for completion in 2007.

There are problems with this review process, much of which involves the subjective nature of measuring physician work, Dana Kelley, a research contractor to the Medicare Payment Advisory Commission (MedPAC), told the advisory committee.

“The physicians themselves are intimately involved in setting the RVUs [but at the same time] have a financial interest in how those services are weighted,” she said. This introduces the possibility of biased reporting.

Specialty societies, which have much to gain by RUC decisions, can submit “compelling arguments” that the values are incorrect, Ms. Kelley said. While the RUC has safeguards to make sure that some specialties don't dominate the review process, “specialization remains an important issue.”

Physicians who perform a specific service are often surveyed to determine the “weight” of a particular service. In answering these surveys, physicians obviously have a financial incentive to indicate that their service should be highly weighted, she said.

The assumption that current RVUs are accurate ignores the fact that they may change over time, Ms. Kelley said. “Even starting from the premise that it's set correctly, the way a service is performed can change its value.”

Also, there is a strong bias in favor of identifying and correcting undervalued codes, she said. “Previous 5-year reviews have led to substantially more increases than decreases in RVUs.” This results in passive devaluation of some codes.

Inaccurate payments for physician services can distort the market for health care services, said Kevin Hayes, Ph.D., a MedPAC research director. “It can boost volume for certain services inappropriately, undermine access to care, and make some specialties more financially attractive than others,” he said.

A lot of news has circulated “on how maldistribution of payments is affecting the career choices of young physicians,” noted Ray E. Stowers, D.O., a commission member. “It really does create a long-term problem of decreasing the number of primary care physicians in the country, and eventually affecting the access to care of Medicare beneficiaries and increasing the cost of care to the Medicare system.”

While it's easy to criticize the RUC, several MedPAC members cautioned that there are few alternatives to the system. “We have to come up with an alternative. We have a chance of doing something a lot better,” Alan R. Nelson, M.D., a member of the commission, acknowledged.

However, even if you can get the pricing “exactly accurate that day,” the evidence for inaccuracies isn't going to come for a while, he said. Changes in the way medicine is practiced are going to create some distortion. “It's never going to be perfect because it's a rolling ball game. We need to measure that in our perceived criticism of the RUC.”

In light of concerns about inaccurate payments, Dr. Hayes said MedPAC plans to “address the topic of valuing physician services in detail,” along with other issues, such as adjusting payments geographically, revisiting the boundaries of payment localities, and determining practice expense payments in the fee schedule.

The RUC plans to make its recommendations on physician RVUs at the end of October, Ms. Kelley said. CMS would then issue a notice of the proposed rule-making next spring on the valuation of physician services, and a final rule would be issued in January 2007, to set values for the following review cycle.

WASHINGTON — The current process for valuing physician services may result in inaccurate pricing and needs to be reviewed, researchers said during a meeting of the Medicare Payment Advisory Commission.

Relative value units (RVUs) are assigned to services in the physician fee schedule to determine how payment rates vary, one service relative to another. The Centers for Medicare and Medicaid Services reviews and modifies the RVUs for selected services based on recommendations from the RVS Update Committee (RUC), a panel made up of representatives of national and specialty medical societies. CMS usually accepts 90% of the committee's recommendations.

By law, RVUs are reviewed every 5 years. The next review is scheduled for completion in 2007.

There are problems with this review process, much of which involves the subjective nature of measuring physician work, Dana Kelley, a research contractor to the Medicare Payment Advisory Commission (MedPAC), told the advisory committee.

“The physicians themselves are intimately involved in setting the RVUs [but at the same time] have a financial interest in how those services are weighted,” she said. This introduces the possibility of biased reporting.

Specialty societies, which have much to gain by RUC decisions, can submit “compelling arguments” that the values are incorrect, Ms. Kelley said. While the RUC has safeguards to make sure that some specialties don't dominate the review process, “specialization remains an important issue.”

Physicians who perform a specific service are often surveyed to determine the “weight” of a particular service. In answering these surveys, physicians obviously have a financial incentive to indicate that their service should be highly weighted, she said.

The assumption that current RVUs are accurate ignores the fact that they may change over time, Ms. Kelley said. “Even starting from the premise that it's set correctly, the way a service is performed can change its value.”

Also, there is a strong bias in favor of identifying and correcting undervalued codes, she said. “Previous 5-year reviews have led to substantially more increases than decreases in RVUs.” This results in passive devaluation of some codes.

Inaccurate payments for physician services can distort the market for health care services, said Kevin Hayes, Ph.D., a MedPAC research director. “It can boost volume for certain services inappropriately, undermine access to care, and make some specialties more financially attractive than others,” he said.

A lot of news has circulated “on how maldistribution of payments is affecting the career choices of young physicians,” noted Ray E. Stowers, D.O., a commission member. “It really does create a long-term problem of decreasing the number of primary care physicians in the country, and eventually affecting the access to care of Medicare beneficiaries and increasing the cost of care to the Medicare system.”

While it's easy to criticize the RUC, several MedPAC members cautioned that there are few alternatives to the system. “We have to come up with an alternative. We have a chance of doing something a lot better,” Alan R. Nelson, M.D., a member of the commission, acknowledged.

However, even if you can get the pricing “exactly accurate that day,” the evidence for inaccuracies isn't going to come for a while, he said. Changes in the way medicine is practiced are going to create some distortion. “It's never going to be perfect because it's a rolling ball game. We need to measure that in our perceived criticism of the RUC.”

In light of concerns about inaccurate payments, Dr. Hayes said MedPAC plans to “address the topic of valuing physician services in detail,” along with other issues, such as adjusting payments geographically, revisiting the boundaries of payment localities, and determining practice expense payments in the fee schedule.

The RUC plans to make its recommendations on physician RVUs at the end of October, Ms. Kelley said. CMS would then issue a notice of the proposed rule-making next spring on the valuation of physician services, and a final rule would be issued in January 2007, to set values for the following review cycle.

Preparing for a Pandemic

The Department of Health and Human Services is taking additional steps to prepare for a potential influenza pandemic, purchasing additional vaccine and antiviral medications that will be placed in the nation's Strategic National Stockpile. Sanofi Pasteur received a $100 million contract to manufacture avian influenza vaccine designed to protect against the H5N1 influenza virus strain, the strain behind an avian flu epidemic in Asia. Just how many individuals could be protected by the newly contracted vaccine is the subject of ongoing clinical studies, HHS said in a statement. In addition, HHS awarded a $2.8 million contract to GlaxoSmithKline for 84,300 treatment courses of the antiviral drug zanamivir (Relenza). These contracts build upon a plan to buy enough vaccine for 20 million people and enough antivirals for another 20 million people.

Part B Premiums on the Rise

Monthly Medicare Part B premiums will be $88.50 in 2006, an increase of $10.30 from the current $78.20 premium, the Centers for Medicare and Medicaid Services announced. The agency cited continued rapid growth in the intensity and utilization of Part B services as the primary reason for the premium increase. “This growth is seen in physician office visits, lab tests, minor procedures, and physician-administered drugs,” the agency said in a statement. Part of the premium increase is necessary to increase funds held, for accounting purposes, in the Part B trust fund. Though premiums are rising, most Medicare beneficiaries will see significantly lower out-of-pocket health care costs in 2006 because of the savings in drug costs from the new Medicare prescription drug benefit, the agency claimed. About 25% of beneficiaries can receive assistance that pays for their entire Part B premium, and about 33% can receive assistance for their Part D premium.

Saving Billions Through Health IT

The widespread implementation of electronic medical record systems by physicians could lead to $142 billion in net savings over 15 years, according to a study from the RAND Corporation. And the implementation of hospital-based systems could mean a savings of nearly $371 billion over 15 years, according to the study, which was published in the September/October issue of Health Affairs. “Our findings strongly suggest that it is time for the government and others who pay for health care to aggressively promote health information technology,” Richard Hillestad, the RAND senior management scientist who led the study, said in a statement. While the potential savings would outweigh the costs quickly during the adoption cycle, there are still a number of barriers to the effective adoption and application of health information technology, the researchers wrote. For instance, although providers would pay to implement the system, it's the payers and consumers who are likely to experience savings. In addition, even if the systems are widely adopted, interoperability and information exchange networks might not be developed, according to the study.

Decline Seen in Employer Coverage

The percentage of businesses offering health insurance to their workers has declined steadily over the last 5 years as the cost of providing coverage continues to outpace inflation and wage growth, according to the 2005 Annual Employer Health Benefits Survey released by the Kaiser Family Foundation and Health Research and Educational Trust. The survey found that 60% of employers offered coverage to workers in 2005, a decrease from 69% in 2000 and 66% in 2003. “The drop stems almost entirely from fewer small businesses offering health benefits, as nearly all businesses (98%) with 200 or more workers offer such benefits,” the report stated. The survey found that 20% of employers who offer health insurance now provide a high-deductible health plan option. Large employers—defined as those with 5,000 or more workers—are significantly more likely than smaller ones to offer a high-deductible plan option, with 33% offering one in 2005. The survey defines high-deductible health plans as those with at least a $1,000 deductible for single coverage or at least a $2,000 deductible for family coverage. In the meantime, relatively few workers are enrolled in “consumer-driven” plans, despite their growing availability.

Salary Affects Specialty Choice

When it comes to choosing a specialty, U.S. medical graduates are more concerned with their earning power than with medical liability costs, according to a study published in the September issue of Obstetrics and Gynecology. Procedure-based and hospital-based specialties, which generally are associated with higher incomes, are the most likely to have residency positions filled by U.S. medical graduates, the researchers found, even when the specialty had higher professional liability costs. For example, U.S. medical students filled more than 90% of the residency positions in neurosurgery and orthopedic surgery where medical liability insurance costs are high—but so are average incomes. In contrast, U.S. students filled 70% of the available residency positions in obstetrics and gynecology, according to the American College of Obstetricians and Gynecologists. But the researchers noted that students also may be attracted to high-earning fields because of the technical challenges or the ability to have a more controllable lifestyle. The results are based on data from the 2004 National Resident Matching Program, the American Medical Association, the Medical Group Management Association, and a major Massachusetts liability insurer.

Preparing for a Pandemic

The Department of Health and Human Services is taking additional steps to prepare for a potential influenza pandemic, purchasing additional vaccine and antiviral medications that will be placed in the nation's Strategic National Stockpile. Sanofi Pasteur received a $100 million contract to manufacture avian influenza vaccine designed to protect against the H5N1 influenza virus strain, the strain behind an avian flu epidemic in Asia. Just how many individuals could be protected by the newly contracted vaccine is the subject of ongoing clinical studies, HHS said in a statement. In addition, HHS awarded a $2.8 million contract to GlaxoSmithKline for 84,300 treatment courses of the antiviral drug zanamivir (Relenza). These contracts build upon a plan to buy enough vaccine for 20 million people and enough antivirals for another 20 million people.

Part B Premiums on the Rise

Monthly Medicare Part B premiums will be $88.50 in 2006, an increase of $10.30 from the current $78.20 premium, the Centers for Medicare and Medicaid Services announced. The agency cited continued rapid growth in the intensity and utilization of Part B services as the primary reason for the premium increase. “This growth is seen in physician office visits, lab tests, minor procedures, and physician-administered drugs,” the agency said in a statement. Part of the premium increase is necessary to increase funds held, for accounting purposes, in the Part B trust fund. Though premiums are rising, most Medicare beneficiaries will see significantly lower out-of-pocket health care costs in 2006 because of the savings in drug costs from the new Medicare prescription drug benefit, the agency claimed. About 25% of beneficiaries can receive assistance that pays for their entire Part B premium, and about 33% can receive assistance for their Part D premium.

Saving Billions Through Health IT

The widespread implementation of electronic medical record systems by physicians could lead to $142 billion in net savings over 15 years, according to a study from the RAND Corporation. And the implementation of hospital-based systems could mean a savings of nearly $371 billion over 15 years, according to the study, which was published in the September/October issue of Health Affairs. “Our findings strongly suggest that it is time for the government and others who pay for health care to aggressively promote health information technology,” Richard Hillestad, the RAND senior management scientist who led the study, said in a statement. While the potential savings would outweigh the costs quickly during the adoption cycle, there are still a number of barriers to the effective adoption and application of health information technology, the researchers wrote. For instance, although providers would pay to implement the system, it's the payers and consumers who are likely to experience savings. In addition, even if the systems are widely adopted, interoperability and information exchange networks might not be developed, according to the study.

Decline Seen in Employer Coverage

The percentage of businesses offering health insurance to their workers has declined steadily over the last 5 years as the cost of providing coverage continues to outpace inflation and wage growth, according to the 2005 Annual Employer Health Benefits Survey released by the Kaiser Family Foundation and Health Research and Educational Trust. The survey found that 60% of employers offered coverage to workers in 2005, a decrease from 69% in 2000 and 66% in 2003. “The drop stems almost entirely from fewer small businesses offering health benefits, as nearly all businesses (98%) with 200 or more workers offer such benefits,” the report stated. The survey found that 20% of employers who offer health insurance now provide a high-deductible health plan option. Large employers—defined as those with 5,000 or more workers—are significantly more likely than smaller ones to offer a high-deductible plan option, with 33% offering one in 2005. The survey defines high-deductible health plans as those with at least a $1,000 deductible for single coverage or at least a $2,000 deductible for family coverage. In the meantime, relatively few workers are enrolled in “consumer-driven” plans, despite their growing availability.

Salary Affects Specialty Choice

When it comes to choosing a specialty, U.S. medical graduates are more concerned with their earning power than with medical liability costs, according to a study published in the September issue of Obstetrics and Gynecology. Procedure-based and hospital-based specialties, which generally are associated with higher incomes, are the most likely to have residency positions filled by U.S. medical graduates, the researchers found, even when the specialty had higher professional liability costs. For example, U.S. medical students filled more than 90% of the residency positions in neurosurgery and orthopedic surgery where medical liability insurance costs are high—but so are average incomes. In contrast, U.S. students filled 70% of the available residency positions in obstetrics and gynecology, according to the American College of Obstetricians and Gynecologists. But the researchers noted that students also may be attracted to high-earning fields because of the technical challenges or the ability to have a more controllable lifestyle. The results are based on data from the 2004 National Resident Matching Program, the American Medical Association, the Medical Group Management Association, and a major Massachusetts liability insurer.

Preparing for a Pandemic

The Department of Health and Human Services is taking additional steps to prepare for a potential influenza pandemic, purchasing additional vaccine and antiviral medications that will be placed in the nation's Strategic National Stockpile. Sanofi Pasteur received a $100 million contract to manufacture avian influenza vaccine designed to protect against the H5N1 influenza virus strain, the strain behind an avian flu epidemic in Asia. Just how many individuals could be protected by the newly contracted vaccine is the subject of ongoing clinical studies, HHS said in a statement. In addition, HHS awarded a $2.8 million contract to GlaxoSmithKline for 84,300 treatment courses of the antiviral drug zanamivir (Relenza). These contracts build upon a plan to buy enough vaccine for 20 million people and enough antivirals for another 20 million people.

Part B Premiums on the Rise

Monthly Medicare Part B premiums will be $88.50 in 2006, an increase of $10.30 from the current $78.20 premium, the Centers for Medicare and Medicaid Services announced. The agency cited continued rapid growth in the intensity and utilization of Part B services as the primary reason for the premium increase. “This growth is seen in physician office visits, lab tests, minor procedures, and physician-administered drugs,” the agency said in a statement. Part of the premium increase is necessary to increase funds held, for accounting purposes, in the Part B trust fund. Though premiums are rising, most Medicare beneficiaries will see significantly lower out-of-pocket health care costs in 2006 because of the savings in drug costs from the new Medicare prescription drug benefit, the agency claimed. About 25% of beneficiaries can receive assistance that pays for their entire Part B premium, and about 33% can receive assistance for their Part D premium.

Saving Billions Through Health IT

The widespread implementation of electronic medical record systems by physicians could lead to $142 billion in net savings over 15 years, according to a study from the RAND Corporation. And the implementation of hospital-based systems could mean a savings of nearly $371 billion over 15 years, according to the study, which was published in the September/October issue of Health Affairs. “Our findings strongly suggest that it is time for the government and others who pay for health care to aggressively promote health information technology,” Richard Hillestad, the RAND senior management scientist who led the study, said in a statement. While the potential savings would outweigh the costs quickly during the adoption cycle, there are still a number of barriers to the effective adoption and application of health information technology, the researchers wrote. For instance, although providers would pay to implement the system, it's the payers and consumers who are likely to experience savings. In addition, even if the systems are widely adopted, interoperability and information exchange networks might not be developed, according to the study.

Decline Seen in Employer Coverage

The percentage of businesses offering health insurance to their workers has declined steadily over the last 5 years as the cost of providing coverage continues to outpace inflation and wage growth, according to the 2005 Annual Employer Health Benefits Survey released by the Kaiser Family Foundation and Health Research and Educational Trust. The survey found that 60% of employers offered coverage to workers in 2005, a decrease from 69% in 2000 and 66% in 2003. “The drop stems almost entirely from fewer small businesses offering health benefits, as nearly all businesses (98%) with 200 or more workers offer such benefits,” the report stated. The survey found that 20% of employers who offer health insurance now provide a high-deductible health plan option. Large employers—defined as those with 5,000 or more workers—are significantly more likely than smaller ones to offer a high-deductible plan option, with 33% offering one in 2005. The survey defines high-deductible health plans as those with at least a $1,000 deductible for single coverage or at least a $2,000 deductible for family coverage. In the meantime, relatively few workers are enrolled in “consumer-driven” plans, despite their growing availability.

Salary Affects Specialty Choice

When it comes to choosing a specialty, U.S. medical graduates are more concerned with their earning power than with medical liability costs, according to a study published in the September issue of Obstetrics and Gynecology. Procedure-based and hospital-based specialties, which generally are associated with higher incomes, are the most likely to have residency positions filled by U.S. medical graduates, the researchers found, even when the specialty had higher professional liability costs. For example, U.S. medical students filled more than 90% of the residency positions in neurosurgery and orthopedic surgery where medical liability insurance costs are high—but so are average incomes. In contrast, U.S. students filled 70% of the available residency positions in obstetrics and gynecology, according to the American College of Obstetricians and Gynecologists. But the researchers noted that students also may be attracted to high-earning fields because of the technical challenges or the ability to have a more controllable lifestyle. The results are based on data from the 2004 National Resident Matching Program, the American Medical Association, the Medical Group Management Association, and a major Massachusetts liability insurer.

Preparing for a Pandemic

The Department of Health and Human Services is taking additional steps to prepare for a potential influenza pandemic, purchasing additional vaccine and antiviral medications that will be placed in the nation's Strategic National Stockpile. Sanofi Pasteur received a $100 million contract to manufacture avian influenza vaccine designed to protect against the H5N1 influenza virus strain, the strain behind an avian flu epidemic in Asia. Just how many individuals could be protected by the newly contracted vaccine is the subject of ongoing clinical studies, HHS said in a statement. In addition, HHS awarded a $2.8 million contract to GlaxoSmithKline for 84,300 treatment courses of the antiviral drug zanamivir (Relenza). These contracts build upon a plan to buy enough vaccine for 20 million people and enough antivirals for another 20 million people.

Part B Premiums on the Rise

Monthly Medicare Part B premiums will be $88.50 in 2006, an increase of $10.30 from the current $78.20 premium, the Centers for Medicare and Medicaid Services announced. The agency cited continued rapid growth in the intensity and utilization of Part B services as the primary reason for the premium increase. “This growth is seen in physician office visits, lab tests, minor procedures, and physician-administered drugs. It also includes rapid growth in hospital outpatient services,” the agency said in a statement. Part of the premium increase is necessary to increase funds held, for accounting purposes, in the Part B trust fund. Most Medicare beneficiaries will see significantly lower out-of-pocket health care costs in 2006 because of the savings in drug costs from the new Medicare prescription drug benefit, the agency claimed. About 25% of beneficiaries can receive assistance that pays for their entire Part B premium, and about 33% can receive assistance for their Part D premium.

Saving Billions Through Health IT

The widespread implementation of electronic medical record systems by physicians could lead to $142 billion in net savings over 15 years, according to a study from the RAND Corporation. And the implementation of hospital-based systems could mean a savings of nearly $371 billion over 15 years, according to the study, which was published in the September/October issue of Health Affairs. “Our findings strongly suggest that it is time for the government and others who pay for health care to aggressively promote health information technology,” Richard Hillestad, the RAND senior management scientist who led the study, said in a statement. While the potential savings would outweigh the costs quickly during the adoption cycle, there are still a number of barriers to the effective adoption and application of health information technology, the researchers wrote. For instance, although providers would pay to implement the system, it's the payers and consumers who are likely to experience savings. In addition, even if the systems are widely adopted, interoperability and information exchange networks might not be developed, according to the study.

Decline in Employer Coverage

The percentage of businesses offering health insurance to their workers has declined steadily over the last 5 years as the cost of providing coverage continues to outpace inflation and wage growth, according to the 2005 Annual Employer Health Benefits Survey released by the Kaiser Family Foundation and Health Research and Educational Trust. The survey found that 60% of employers offered coverage to workers in 2005, a decrease from 69% in 2000 and 66% in 2003. “The drop stems almost entirely from fewer small businesses offering health benefits, as nearly all businesses (98%) with 200 or more workers offer such benefits,” the report stated. The survey found that 20% of employers who offer health insurance now provide a high-deductible health plan option. Large employers—defined as those with 5,000 or more workers—are significantly more likely than smaller ones to offer a high-deductible plan option, with 33% offering one in 2005. The survey defines high-deductible health plans as those with at least a $1,000 deductible for single coverage or at least a $2,000 deductible for family coverage. In the meantime, relatively few workers are enrolled in “consumer-driven” plans, despite their growing availability.

Salary Affects Specialty Choice

When it comes to choosing a specialty, U.S. medical graduates are more concerned with their earning power than with medical liability costs, according to a study published in the September issue of Obstetrics and Gynecology. Procedure-based and hospital-based specialties, which generally are associated with higher incomes, are the most likely to have residency positions filled by U.S. medical graduates, the researchers found, even when the specialty had higher professional liability costs. For example, U.S. medical students filled more than 90% of the residency positions in neurosurgery and orthopedic surgery, for which medical liability insurance costs are high—but so are average incomes. In contrast, U.S. students filled 70% of the available residency positions in obstetrics and gynecology, according to the American College of Obstetricians and Gynecologists. But the researchers noted that students also may be attracted to high-earning fields because of the technical challenges or the ability to have a more controllable lifestyle. The results are based on data from the 2004 National Resident Matching Program, the American Medical Association, the Medical Group Management Association, and a major Massachusetts liability insurer.

Preparing for a Pandemic

The Department of Health and Human Services is taking additional steps to prepare for a potential influenza pandemic, purchasing additional vaccine and antiviral medications that will be placed in the nation's Strategic National Stockpile. Sanofi Pasteur received a $100 million contract to manufacture avian influenza vaccine designed to protect against the H5N1 influenza virus strain, the strain behind an avian flu epidemic in Asia. Just how many individuals could be protected by the newly contracted vaccine is the subject of ongoing clinical studies, HHS said in a statement. In addition, HHS awarded a $2.8 million contract to GlaxoSmithKline for 84,300 treatment courses of the antiviral drug zanamivir (Relenza). These contracts build upon a plan to buy enough vaccine for 20 million people and enough antivirals for another 20 million people.

Part B Premiums on the Rise

Monthly Medicare Part B premiums will be $88.50 in 2006, an increase of $10.30 from the current $78.20 premium, the Centers for Medicare and Medicaid Services announced. The agency cited continued rapid growth in the intensity and utilization of Part B services as the primary reason for the premium increase. “This growth is seen in physician office visits, lab tests, minor procedures, and physician-administered drugs. It also includes rapid growth in hospital outpatient services,” the agency said in a statement. Part of the premium increase is necessary to increase funds held, for accounting purposes, in the Part B trust fund. Most Medicare beneficiaries will see significantly lower out-of-pocket health care costs in 2006 because of the savings in drug costs from the new Medicare prescription drug benefit, the agency claimed. About 25% of beneficiaries can receive assistance that pays for their entire Part B premium, and about 33% can receive assistance for their Part D premium.

Saving Billions Through Health IT

The widespread implementation of electronic medical record systems by physicians could lead to $142 billion in net savings over 15 years, according to a study from the RAND Corporation. And the implementation of hospital-based systems could mean a savings of nearly $371 billion over 15 years, according to the study, which was published in the September/October issue of Health Affairs. “Our findings strongly suggest that it is time for the government and others who pay for health care to aggressively promote health information technology,” Richard Hillestad, the RAND senior management scientist who led the study, said in a statement. While the potential savings would outweigh the costs quickly during the adoption cycle, there are still a number of barriers to the effective adoption and application of health information technology, the researchers wrote. For instance, although providers would pay to implement the system, it's the payers and consumers who are likely to experience savings. In addition, even if the systems are widely adopted, interoperability and information exchange networks might not be developed, according to the study.

Decline in Employer Coverage

The percentage of businesses offering health insurance to their workers has declined steadily over the last 5 years as the cost of providing coverage continues to outpace inflation and wage growth, according to the 2005 Annual Employer Health Benefits Survey released by the Kaiser Family Foundation and Health Research and Educational Trust. The survey found that 60% of employers offered coverage to workers in 2005, a decrease from 69% in 2000 and 66% in 2003. “The drop stems almost entirely from fewer small businesses offering health benefits, as nearly all businesses (98%) with 200 or more workers offer such benefits,” the report stated. The survey found that 20% of employers who offer health insurance now provide a high-deductible health plan option. Large employers—defined as those with 5,000 or more workers—are significantly more likely than smaller ones to offer a high-deductible plan option, with 33% offering one in 2005. The survey defines high-deductible health plans as those with at least a $1,000 deductible for single coverage or at least a $2,000 deductible for family coverage. In the meantime, relatively few workers are enrolled in “consumer-driven” plans, despite their growing availability.

Salary Affects Specialty Choice

When it comes to choosing a specialty, U.S. medical graduates are more concerned with their earning power than with medical liability costs, according to a study published in the September issue of Obstetrics and Gynecology. Procedure-based and hospital-based specialties, which generally are associated with higher incomes, are the most likely to have residency positions filled by U.S. medical graduates, the researchers found, even when the specialty had higher professional liability costs. For example, U.S. medical students filled more than 90% of the residency positions in neurosurgery and orthopedic surgery, for which medical liability insurance costs are high—but so are average incomes. In contrast, U.S. students filled 70% of the available residency positions in obstetrics and gynecology, according to the American College of Obstetricians and Gynecologists. But the researchers noted that students also may be attracted to high-earning fields because of the technical challenges or the ability to have a more controllable lifestyle. The results are based on data from the 2004 National Resident Matching Program, the American Medical Association, the Medical Group Management Association, and a major Massachusetts liability insurer.

Preparing for a Pandemic

The Department of Health and Human Services is taking additional steps to prepare for a potential influenza pandemic, purchasing additional vaccine and antiviral medications that will be placed in the nation's Strategic National Stockpile. Sanofi Pasteur received a $100 million contract to manufacture avian influenza vaccine designed to protect against the H5N1 influenza virus strain, the strain behind an avian flu epidemic in Asia. Just how many individuals could be protected by the newly contracted vaccine is the subject of ongoing clinical studies, HHS said in a statement. In addition, HHS awarded a $2.8 million contract to GlaxoSmithKline for 84,300 treatment courses of the antiviral drug zanamivir (Relenza). These contracts build upon a plan to buy enough vaccine for 20 million people and enough antivirals for another 20 million people.

Part B Premiums on the Rise

Monthly Medicare Part B premiums will be $88.50 in 2006, an increase of $10.30 from the current $78.20 premium, the Centers for Medicare and Medicaid Services announced. The agency cited continued rapid growth in the intensity and utilization of Part B services as the primary reason for the premium increase. “This growth is seen in physician office visits, lab tests, minor procedures, and physician-administered drugs. It also includes rapid growth in hospital outpatient services,” the agency said in a statement. Part of the premium increase is necessary to increase funds held, for accounting purposes, in the Part B trust fund. Most Medicare beneficiaries will see significantly lower out-of-pocket health care costs in 2006 because of the savings in drug costs from the new Medicare prescription drug benefit, the agency claimed. About 25% of beneficiaries can receive assistance that pays for their entire Part B premium, and about 33% can receive assistance for their Part D premium.

Saving Billions Through Health IT

The widespread implementation of electronic medical record systems by physicians could lead to $142 billion in net savings over 15 years, according to a study from the RAND Corporation. And the implementation of hospital-based systems could mean a savings of nearly $371 billion over 15 years, according to the study, which was published in the September/October issue of Health Affairs. “Our findings strongly suggest that it is time for the government and others who pay for health care to aggressively promote health information technology,” Richard Hillestad, the RAND senior management scientist who led the study, said in a statement. While the potential savings would outweigh the costs quickly during the adoption cycle, there are still a number of barriers to the effective adoption and application of health information technology, the researchers wrote. For instance, although providers would pay to implement the system, it's the payers and consumers who are likely to experience savings. In addition, even if the systems are widely adopted, interoperability and information exchange networks might not be developed, according to the study.

Decline in Employer Coverage

The percentage of businesses offering health insurance to their workers has declined steadily over the last 5 years as the cost of providing coverage continues to outpace inflation and wage growth, according to the 2005 Annual Employer Health Benefits Survey released by the Kaiser Family Foundation and Health Research and Educational Trust. The survey found that 60% of employers offered coverage to workers in 2005, a decrease from 69% in 2000 and 66% in 2003. “The drop stems almost entirely from fewer small businesses offering health benefits, as nearly all businesses (98%) with 200 or more workers offer such benefits,” the report stated. The survey found that 20% of employers who offer health insurance now provide a high-deductible health plan option. Large employers—defined as those with 5,000 or more workers—are significantly more likely than smaller ones to offer a high-deductible plan option, with 33% offering one in 2005. The survey defines high-deductible health plans as those with at least a $1,000 deductible for single coverage or at least a $2,000 deductible for family coverage. In the meantime, relatively few workers are enrolled in “consumer-driven” plans, despite their growing availability.

Salary Affects Specialty Choice

When it comes to choosing a specialty, U.S. medical graduates are more concerned with their earning power than with medical liability costs, according to a study published in the September issue of Obstetrics and Gynecology. Procedure-based and hospital-based specialties, which generally are associated with higher incomes, are the most likely to have residency positions filled by U.S. medical graduates, the researchers found, even when the specialty had higher professional liability costs. For example, U.S. medical students filled more than 90% of the residency positions in neurosurgery and orthopedic surgery, for which medical liability insurance costs are high—but so are average incomes. In contrast, U.S. students filled 70% of the available residency positions in obstetrics and gynecology, according to the American College of Obstetricians and Gynecologists. But the researchers noted that students also may be attracted to high-earning fields because of the technical challenges or the ability to have a more controllable lifestyle. The results are based on data from the 2004 National Resident Matching Program, the American Medical Association, the Medical Group Management Association, and a major Massachusetts liability insurer.

WASHINGTON — The Centers for Medicare and Medicaid Services should not institute the 4.3% decrease proposed in the 2006 physician fee schedule, a federal advisory panel recommended.

As it works to fix the sustainable growth rate, CMS should, instead, adopt the Medicare Payment Advisory Commission's recent recommendation to increase payments by 2.7% to keep pace with the cost of care, the Practicing Physicians Advisory Council recommended.

The council meets quarterly to advise the Department of Health and Human Services on proposed changes in Medicare regulations and carrier manual instructions related to physicians' services.

MedPAC advises Congress in a similar manner.

Physician reimbursements under Medicare will be cut 26% over the next 6 years unless the sustainable growth rate (SGR) formula is changed. Although the PPAC recommendation calls on CMS to take action, only Congress has the statutory authority to fix the formula.

The average physician facing these cuts “is stuck,” Ronald Castellanos, M.D., PPAC chairman, told CMS officials who presented a summary of the proposed fee schedule at the meeting. Reductions in Medicare payments have forced some physicians to do ancillary procedures in their offices to make up for the lost income, he said.

Leroy Sprang, M.D., an ob.gyn. who was recently named to the panel, said he's seen at least a dozen ob.gyns. in his area of Evanston, Ill., leave the profession due to the pressures of medical malpractice combined with reduced Medicare payments. While they don't deal with older patients as much as do other primary care physicians, some ob.gyn. practices have stopped seeing Medicare patients, he said.

In another avenue for addressing low physician reimbursement, the PPAC asked CMS for a report on whether Medicare Part B drugs could be removed retrospectively, using an administrative methodology.

The council asked that the report be ready in time for its December meeting.

“We've been talking about this for the past 2 years,” said PPAC member Gregory Przybylski, M.D. The question is whether CMS could do this administratively by a certain date, he said.

Testifying before the panel, Ardis Hoven, M.D., who spoke on behalf of the American Medical Association, said the AMA was confident of CMS' authority to remove the drugs. “Drugs are not paid under the Medicare physician fee schedule, and it is illogical to include them in calculating the SGR,” Dr. Hoven said in her testimony.

If CMS adopted a revised definition of “physicians' services” that excludes drugs, it could revise its SGR calculations going back to 1996 using its revised definition, although the revisions would affect payment updates in future years, she said.

Leslie Norwalk, CMS deputy administrator, conceded that Congress needed to institute a more rational approach to physician payments.

Addressing other possible options, HHS's Office of Inspector General may take another look at “gainsharing,” an arrangement where physicians could make suggestions on ways to improve care, and in return receive a portion of the cost savings achieved when their ideas are implemented. “The OIG has permitted physicians to engage in this, but only with respect to supplies, not specifically to medical savings,” Ms. Norwalk commented.

To her knowledge, Congress has engaged in some ideas where physicians would be able to share in hospital savings for instance, “without it being a kickback violation,” she told the advisory panel.

CMS also has the ability to change payment systems statutorily through its practice group demonstration projects, Ms. Norwalk said. Several projects are currently testing pay-for-performance systems.

For the first time, Congress, MedPAC, CMS, PPAC, and all of the medical specialties are in agreement about something: that the SGR is flawed, Dr. Castellanos said. For that reason, “maybe something constructive can come out of this.”

WASHINGTON — The Centers for Medicare and Medicaid Services should not institute the 4.3% decrease proposed in the 2006 physician fee schedule, a federal advisory panel recommended.

As it works to fix the sustainable growth rate, CMS should, instead, adopt the Medicare Payment Advisory Commission's recent recommendation to increase payments by 2.7% to keep pace with the cost of care, the Practicing Physicians Advisory Council recommended.

The council meets quarterly to advise the Department of Health and Human Services on proposed changes in Medicare regulations and carrier manual instructions related to physicians' services.

MedPAC advises Congress in a similar manner.

Physician reimbursements under Medicare will be cut 26% over the next 6 years unless the sustainable growth rate (SGR) formula is changed. Although the PPAC recommendation calls on CMS to take action, only Congress has the statutory authority to fix the formula.

The average physician facing these cuts “is stuck,” Ronald Castellanos, M.D., PPAC chairman, told CMS officials who presented a summary of the proposed fee schedule at the meeting. Reductions in Medicare payments have forced some physicians to do ancillary procedures in their offices to make up for the lost income, he said.

Leroy Sprang, M.D., an ob.gyn. who was recently named to the panel, said he's seen at least a dozen ob.gyns. in his area of Evanston, Ill., leave the profession due to the pressures of medical malpractice combined with reduced Medicare payments. While they don't deal with older patients as much as do other primary care physicians, some ob.gyn. practices have stopped seeing Medicare patients, he said.

In another avenue for addressing low physician reimbursement, the PPAC asked CMS for a report on whether Medicare Part B drugs could be removed retrospectively, using an administrative methodology.

The council asked that the report be ready in time for its December meeting.

“We've been talking about this for the past 2 years,” said PPAC member Gregory Przybylski, M.D. The question is whether CMS could do this administratively by a certain date, he said.

Testifying before the panel, Ardis Hoven, M.D., who spoke on behalf of the American Medical Association, said the AMA was confident of CMS' authority to remove the drugs. “Drugs are not paid under the Medicare physician fee schedule, and it is illogical to include them in calculating the SGR,” Dr. Hoven said in her testimony.

If CMS adopted a revised definition of “physicians' services” that excludes drugs, it could revise its SGR calculations going back to 1996 using its revised definition, although the revisions would affect payment updates in future years, she said.

Leslie Norwalk, CMS deputy administrator, conceded that Congress needed to institute a more rational approach to physician payments.

Addressing other possible options, HHS's Office of Inspector General may take another look at “gainsharing,” an arrangement where physicians could make suggestions on ways to improve care, and in return receive a portion of the cost savings achieved when their ideas are implemented. “The OIG has permitted physicians to engage in this, but only with respect to supplies, not specifically to medical savings,” Ms. Norwalk commented.

To her knowledge, Congress has engaged in some ideas where physicians would be able to share in hospital savings for instance, “without it being a kickback violation,” she told the advisory panel.

CMS also has the ability to change payment systems statutorily through its practice group demonstration projects, Ms. Norwalk said. Several projects are currently testing pay-for-performance systems.

For the first time, Congress, MedPAC, CMS, PPAC, and all of the medical specialties are in agreement about something: that the SGR is flawed, Dr. Castellanos said. For that reason, “maybe something constructive can come out of this.”

WASHINGTON — The Centers for Medicare and Medicaid Services should not institute the 4.3% decrease proposed in the 2006 physician fee schedule, a federal advisory panel recommended.

As it works to fix the sustainable growth rate, CMS should, instead, adopt the Medicare Payment Advisory Commission's recent recommendation to increase payments by 2.7% to keep pace with the cost of care, the Practicing Physicians Advisory Council recommended.

The council meets quarterly to advise the Department of Health and Human Services on proposed changes in Medicare regulations and carrier manual instructions related to physicians' services.

MedPAC advises Congress in a similar manner.

Physician reimbursements under Medicare will be cut 26% over the next 6 years unless the sustainable growth rate (SGR) formula is changed. Although the PPAC recommendation calls on CMS to take action, only Congress has the statutory authority to fix the formula.

The average physician facing these cuts “is stuck,” Ronald Castellanos, M.D., PPAC chairman, told CMS officials who presented a summary of the proposed fee schedule at the meeting. Reductions in Medicare payments have forced some physicians to do ancillary procedures in their offices to make up for the lost income, he said.

Leroy Sprang, M.D., an ob.gyn. who was recently named to the panel, said he's seen at least a dozen ob.gyns. in his area of Evanston, Ill., leave the profession due to the pressures of medical malpractice combined with reduced Medicare payments. While they don't deal with older patients as much as do other primary care physicians, some ob.gyn. practices have stopped seeing Medicare patients, he said.

In another avenue for addressing low physician reimbursement, the PPAC asked CMS for a report on whether Medicare Part B drugs could be removed retrospectively, using an administrative methodology.

The council asked that the report be ready in time for its December meeting.

“We've been talking about this for the past 2 years,” said PPAC member Gregory Przybylski, M.D. The question is whether CMS could do this administratively by a certain date, he said.

Testifying before the panel, Ardis Hoven, M.D., who spoke on behalf of the American Medical Association, said the AMA was confident of CMS' authority to remove the drugs. “Drugs are not paid under the Medicare physician fee schedule, and it is illogical to include them in calculating the SGR,” Dr. Hoven said in her testimony.

If CMS adopted a revised definition of “physicians' services” that excludes drugs, it could revise its SGR calculations going back to 1996 using its revised definition, although the revisions would affect payment updates in future years, she said.

Leslie Norwalk, CMS deputy administrator, conceded that Congress needed to institute a more rational approach to physician payments.

Addressing other possible options, HHS's Office of Inspector General may take another look at “gainsharing,” an arrangement where physicians could make suggestions on ways to improve care, and in return receive a portion of the cost savings achieved when their ideas are implemented. “The OIG has permitted physicians to engage in this, but only with respect to supplies, not specifically to medical savings,” Ms. Norwalk commented.

To her knowledge, Congress has engaged in some ideas where physicians would be able to share in hospital savings for instance, “without it being a kickback violation,” she told the advisory panel.

CMS also has the ability to change payment systems statutorily through its practice group demonstration projects, Ms. Norwalk said. Several projects are currently testing pay-for-performance systems.

For the first time, Congress, MedPAC, CMS, PPAC, and all of the medical specialties are in agreement about something: that the SGR is flawed, Dr. Castellanos said. For that reason, “maybe something constructive can come out of this.”

WASHINGTON — The full cost of drugs obtained through patient-assistance programs should be counted as out-of-pocket expenses under the new Medicare Part D prescription drug benefit, according to council members at a meeting of the Practicing Physicians Advisory Council.

The Centers for Medicare and Medicaid Services (CMS) should work with the Health and Human Services Department's Office of Inspector General to give final guidance on this issue, the panel stated.

Under the coming Part D benefit, until the patient has met his or her out-of-pocket expense limit, the patient has to pay for the drug, said PPAC member Barbara McAneny, M.D., an oncologist from Albuquerque. If the patient can't afford it, but “we obtain it for free from the pharmaceutical companies, and if it doesn't count toward true out-of-pocket expenses, the patient will never get through the out-of-pocket [limit] and into the benefit.”

Jeffrey Kelman, M.D., medical officer with the CMS Center for Beneficiary Choices told the council that there are circumstances in which out-of-pocket expenses would be covered: Payments made by qualified state pharmaceutical assistance programs toward copays or other cost-sharing would count toward true out-of-pocket expenses, for example, in terms of reaching the $3,600 out-of-pocket limit before reinsurance, he said.

However, payments from a third-party insurance company—or from government agency policies—would not, he said.

“There needs to be guidance as to what that means,” he acknowledged.

For the Part D benefit, CMS has divided the country into 34 regions, and all will have robust coverage with several Part D drug plans available for beneficiaries of all incomes and for dual eligible patients in the Medicare and Medicaid programs, Dr. Kelman told the PPAC.

He expressed confidence that beneficiaries would be able to afford the benefit. The average monthly premium for the benefit is $32.30 nationally, lower than what the agency expected, he said.

“All regions will have plans with premiums well below that average,” he said. (See box.) In addition, all of the formularies submitted for the program are much more robust than most commercial formularies or any state formulary. “That's going to make the transition in January much easier,” Dr. Kelman said.

Dr. McAneny noted that rumors were floating around regarding whether Part B drugs—such as oral chemotherapy agents that are covered under the medical benefit as opposed to the pharmacy benefit—would be moving over to Part D.

“At the moment, those drugs aren't moving anywhere,” Dr. Kelman said. “There's talk of it because, starting in January, there will be two drug benefits, and there is a potential for confusion, particularly over the oral drugs or chemo drugs, because all those drugs in theory could be [Part] B or D drugs.”

It's an issue that will be looked at again, he said.

In the months leading up to the January start of Part D, CMS has actively been spending time on the education of, communication with, and enrollment of beneficiaries, but outreach to physicians about the drug benefit is an area that needs work, Dr. Kelman said. “Is it toolkits, training sessions, CME?” he asked the panel.

Such tools are important, he noted, as “it's very clear that the practicing physician will be the point of contact for the beneficiary” who needs guidance on what to do about the new benefit.

No physician wants patients to miss out on the Part D benefit, Dr. Kelman noted, “especially because the low-income subsidy is a good benefit. There [are] no premiums, no gap, a minimum copay, no deductible, and a full catastrophic benefit.”

Medicare also needs input on how it could interact with physicians on formulary changes, such as matching the formulary with the patient's current drug list, he said.

In a resolution, PPAC indicated it would complement the efforts of CMS to disseminate information to the public about the Part D benefit program.

CMS, in the meantime, is developing a new Web tool to help facilitate the enrollment process of the new Part D benefit, Dr. Kelman said.

This new tool “will allow the beneficiary and the physician to identify the plans that the [beneficiary] has been auto-enrolled into or has actively enrolled into,” with additional information on the Medicare drug cards.

Auto-enrollment has been a big question in particular for the full-benefit dual-eligibles (those patients who are eligible for Medicare and Medicaid), he said. “Now they can do it on the Web or, more likely, their physician, pharmacist or social worker can do it on the Web.”

The council meets quarterly to advise the Department of Health and Human Services on proposed changes in Medicare regulations and carrier manual instructions related to physicians' services.

Source: Dr. Lukacz

WASHINGTON — The full cost of drugs obtained through patient-assistance programs should be counted as out-of-pocket expenses under the new Medicare Part D prescription drug benefit, according to council members at a meeting of the Practicing Physicians Advisory Council.

The Centers for Medicare and Medicaid Services (CMS) should work with the Health and Human Services Department's Office of Inspector General to give final guidance on this issue, the panel stated.

Under the coming Part D benefit, until the patient has met his or her out-of-pocket expense limit, the patient has to pay for the drug, said PPAC member Barbara McAneny, M.D., an oncologist from Albuquerque. If the patient can't afford it, but “we obtain it for free from the pharmaceutical companies, and if it doesn't count toward true out-of-pocket expenses, the patient will never get through the out-of-pocket [limit] and into the benefit.”

Jeffrey Kelman, M.D., medical officer with the CMS Center for Beneficiary Choices told the council that there are circumstances in which out-of-pocket expenses would be covered: Payments made by qualified state pharmaceutical assistance programs toward copays or other cost-sharing would count toward true out-of-pocket expenses, for example, in terms of reaching the $3,600 out-of-pocket limit before reinsurance, he said.

However, payments from a third-party insurance company—or from government agency policies—would not, he said.

“There needs to be guidance as to what that means,” he acknowledged.

For the Part D benefit, CMS has divided the country into 34 regions, and all will have robust coverage with several Part D drug plans available for beneficiaries of all incomes and for dual eligible patients in the Medicare and Medicaid programs, Dr. Kelman told the PPAC.

He expressed confidence that beneficiaries would be able to afford the benefit. The average monthly premium for the benefit is $32.30 nationally, lower than what the agency expected, he said.

“All regions will have plans with premiums well below that average,” he said. (See box.) In addition, all of the formularies submitted for the program are much more robust than most commercial formularies or any state formulary. “That's going to make the transition in January much easier,” Dr. Kelman said.

Dr. McAneny noted that rumors were floating around regarding whether Part B drugs—such as oral chemotherapy agents that are covered under the medical benefit as opposed to the pharmacy benefit—would be moving over to Part D.

“At the moment, those drugs aren't moving anywhere,” Dr. Kelman said. “There's talk of it because, starting in January, there will be two drug benefits, and there is a potential for confusion, particularly over the oral drugs or chemo drugs, because all those drugs in theory could be [Part] B or D drugs.”

It's an issue that will be looked at again, he said.

In the months leading up to the January start of Part D, CMS has actively been spending time on the education of, communication with, and enrollment of beneficiaries, but outreach to physicians about the drug benefit is an area that needs work, Dr. Kelman said. “Is it toolkits, training sessions, CME?” he asked the panel.

Such tools are important, he noted, as “it's very clear that the practicing physician will be the point of contact for the beneficiary” who needs guidance on what to do about the new benefit.

No physician wants patients to miss out on the Part D benefit, Dr. Kelman noted, “especially because the low-income subsidy is a good benefit. There [are] no premiums, no gap, a minimum copay, no deductible, and a full catastrophic benefit.”

Medicare also needs input on how it could interact with physicians on formulary changes, such as matching the formulary with the patient's current drug list, he said.

In a resolution, PPAC indicated it would complement the efforts of CMS to disseminate information to the public about the Part D benefit program.

CMS, in the meantime, is developing a new Web tool to help facilitate the enrollment process of the new Part D benefit, Dr. Kelman said.

This new tool “will allow the beneficiary and the physician to identify the plans that the [beneficiary] has been auto-enrolled into or has actively enrolled into,” with additional information on the Medicare drug cards.

Auto-enrollment has been a big question in particular for the full-benefit dual-eligibles (those patients who are eligible for Medicare and Medicaid), he said. “Now they can do it on the Web or, more likely, their physician, pharmacist or social worker can do it on the Web.”

The council meets quarterly to advise the Department of Health and Human Services on proposed changes in Medicare regulations and carrier manual instructions related to physicians' services.

Source: Dr. Lukacz

WASHINGTON — The full cost of drugs obtained through patient-assistance programs should be counted as out-of-pocket expenses under the new Medicare Part D prescription drug benefit, according to council members at a meeting of the Practicing Physicians Advisory Council.

The Centers for Medicare and Medicaid Services (CMS) should work with the Health and Human Services Department's Office of Inspector General to give final guidance on this issue, the panel stated.

Under the coming Part D benefit, until the patient has met his or her out-of-pocket expense limit, the patient has to pay for the drug, said PPAC member Barbara McAneny, M.D., an oncologist from Albuquerque. If the patient can't afford it, but “we obtain it for free from the pharmaceutical companies, and if it doesn't count toward true out-of-pocket expenses, the patient will never get through the out-of-pocket [limit] and into the benefit.”

Jeffrey Kelman, M.D., medical officer with the CMS Center for Beneficiary Choices told the council that there are circumstances in which out-of-pocket expenses would be covered: Payments made by qualified state pharmaceutical assistance programs toward copays or other cost-sharing would count toward true out-of-pocket expenses, for example, in terms of reaching the $3,600 out-of-pocket limit before reinsurance, he said.

However, payments from a third-party insurance company—or from government agency policies—would not, he said.

“There needs to be guidance as to what that means,” he acknowledged.

For the Part D benefit, CMS has divided the country into 34 regions, and all will have robust coverage with several Part D drug plans available for beneficiaries of all incomes and for dual eligible patients in the Medicare and Medicaid programs, Dr. Kelman told the PPAC.

He expressed confidence that beneficiaries would be able to afford the benefit. The average monthly premium for the benefit is $32.30 nationally, lower than what the agency expected, he said.

“All regions will have plans with premiums well below that average,” he said. (See box.) In addition, all of the formularies submitted for the program are much more robust than most commercial formularies or any state formulary. “That's going to make the transition in January much easier,” Dr. Kelman said.

Dr. McAneny noted that rumors were floating around regarding whether Part B drugs—such as oral chemotherapy agents that are covered under the medical benefit as opposed to the pharmacy benefit—would be moving over to Part D.

“At the moment, those drugs aren't moving anywhere,” Dr. Kelman said. “There's talk of it because, starting in January, there will be two drug benefits, and there is a potential for confusion, particularly over the oral drugs or chemo drugs, because all those drugs in theory could be [Part] B or D drugs.”

It's an issue that will be looked at again, he said.

In the months leading up to the January start of Part D, CMS has actively been spending time on the education of, communication with, and enrollment of beneficiaries, but outreach to physicians about the drug benefit is an area that needs work, Dr. Kelman said. “Is it toolkits, training sessions, CME?” he asked the panel.

Such tools are important, he noted, as “it's very clear that the practicing physician will be the point of contact for the beneficiary” who needs guidance on what to do about the new benefit.

No physician wants patients to miss out on the Part D benefit, Dr. Kelman noted, “especially because the low-income subsidy is a good benefit. There [are] no premiums, no gap, a minimum copay, no deductible, and a full catastrophic benefit.”

Medicare also needs input on how it could interact with physicians on formulary changes, such as matching the formulary with the patient's current drug list, he said.

In a resolution, PPAC indicated it would complement the efforts of CMS to disseminate information to the public about the Part D benefit program.

CMS, in the meantime, is developing a new Web tool to help facilitate the enrollment process of the new Part D benefit, Dr. Kelman said.

This new tool “will allow the beneficiary and the physician to identify the plans that the [beneficiary] has been auto-enrolled into or has actively enrolled into,” with additional information on the Medicare drug cards.

Auto-enrollment has been a big question in particular for the full-benefit dual-eligibles (those patients who are eligible for Medicare and Medicaid), he said. “Now they can do it on the Web or, more likely, their physician, pharmacist or social worker can do it on the Web.”

The council meets quarterly to advise the Department of Health and Human Services on proposed changes in Medicare regulations and carrier manual instructions related to physicians' services.

Source: Dr. Lukacz

WASHINGTON — The full cost of drugs obtained through patient-assistance programs should be counted as out-of-pocket expenses under the new Medicare Part D prescription drug benefit, according to council members at a meeting of the Practicing Physicians Advisory Council.

The Centers for Medicare and Medicaid Services (CMS) should work with the Health and Human Services Department's Office of Inspector General to give final guidance on this issue, the panel stated.

Under the coming Part D benefit, until the patient has met his or her out-of-pocket expense limit, the patient has to pay for the drug, said PPAC member Barbara McAneny, M.D., from Albuquerque. If the patient can't afford it, but “we obtain it for free from the pharmaceutical companies, and if it doesn't count toward true out-of-pocket expenses, the patient will never get through the out-of-pocket [limit] and into the benefit.”

Jeffrey Kelman, M.D., medical officer with the CMS Center for Beneficiary Choices, told the council that there are circumstances in which out-of-pocket expenses would be covered: Payments made by qualified state pharmaceutical assistance programs toward copayments or other cost-sharing would count toward true out-of-pocket expenses, for example, in terms of reaching the $3,600 out-of-pocket limit before reinsurance, he said.

However, payments from a third-party insurance company—or from government agency policies—would not, he said.

For the Part D benefit, CMS has divided the country into 34 regions, and all will have robust coverage with several Part D drug plans available for beneficiaries of all incomes and for dual-eligible patients in the Medicare and Medicaid programs, Dr. Kelman told the PPAC.

He expressed confidence that beneficiaries would be able to afford the benefit. The average monthly premium for the benefit is $32.30 nationally, lower than what the agency expected, he said.

Dr. McAneny noted that rumors were floating around regarding whether Part B drugs—such as oral chemotherapy agents that are covered under the medical benefit as opposed to the pharmacy benefit—would be moving over to Part D.

“At the moment, those drugs aren't moving anywhere,” Dr. Kelman said. “There's talk of it because, starting in January, there will be two drug benefits, and there is a potential for confusion, particularly over the oral drugs or chemo drugs, because all those drugs in theory could be [Part] B or D drugs.”

In the months leading up to the January start of Part D, CMS has actively been spending time on the education of, communication with, and enrollment of beneficiaries, but outreach to physicians about the drug benefit is an area that needs work, Dr. Kelman said. “Is it toolkits, training sessions, CME?” he asked the panel.

Such tools are important, he noted, as “it's very clear that the practicing physician will be the point of contact for the beneficiary” who needs guidance on what to do about the new benefit.

No physician wants patients to miss out on the Part D benefit, Dr. Kelman noted, “especially because the low-income subsidy is a good benefit.

“There [are] no premiums, no gap, a minimum copay, no deductible, and a full catastrophic benefit.”

Medicare needs input on how it could interact with physicians on formulary changes, such as matching the formulary with the patient's current drug list, he said.

In a resolution, PPAC indicated it would complement the efforts of CMS to disseminate information to the public about the Part D benefit program.

CMS, in the meantime, is developing a new Web tool to help facilitate the enrollment process of the new Part D benefit, Dr. Kelman said.

This new tool “will allow the beneficiary and the physician to identify the plans that the [beneficiary] has been auto-enrolled into or has actively enrolled into,” with additional information on the Medicare drug cards.

Auto-enrollment has been a big question in particular for the full-benefit dual-eligibles (those patients who are eligible fore Medicare and Medicaid), he said. “Now they can do it on the Web or, more likely, their physician, pharmacist, or social worker can do it on the Web.”

WASHINGTON — The full cost of drugs obtained through patient-assistance programs should be counted as out-of-pocket expenses under the new Medicare Part D prescription drug benefit, according to council members at a meeting of the Practicing Physicians Advisory Council.

The Centers for Medicare and Medicaid Services (CMS) should work with the Health and Human Services Department's Office of Inspector General to give final guidance on this issue, the panel stated.

Under the coming Part D benefit, until the patient has met his or her out-of-pocket expense limit, the patient has to pay for the drug, said PPAC member Barbara McAneny, M.D., from Albuquerque. If the patient can't afford it, but “we obtain it for free from the pharmaceutical companies, and if it doesn't count toward true out-of-pocket expenses, the patient will never get through the out-of-pocket [limit] and into the benefit.”

Jeffrey Kelman, M.D., medical officer with the CMS Center for Beneficiary Choices, told the council that there are circumstances in which out-of-pocket expenses would be covered: Payments made by qualified state pharmaceutical assistance programs toward copayments or other cost-sharing would count toward true out-of-pocket expenses, for example, in terms of reaching the $3,600 out-of-pocket limit before reinsurance, he said.

However, payments from a third-party insurance company—or from government agency policies—would not, he said.

For the Part D benefit, CMS has divided the country into 34 regions, and all will have robust coverage with several Part D drug plans available for beneficiaries of all incomes and for dual-eligible patients in the Medicare and Medicaid programs, Dr. Kelman told the PPAC.

He expressed confidence that beneficiaries would be able to afford the benefit. The average monthly premium for the benefit is $32.30 nationally, lower than what the agency expected, he said.

Dr. McAneny noted that rumors were floating around regarding whether Part B drugs—such as oral chemotherapy agents that are covered under the medical benefit as opposed to the pharmacy benefit—would be moving over to Part D.

“At the moment, those drugs aren't moving anywhere,” Dr. Kelman said. “There's talk of it because, starting in January, there will be two drug benefits, and there is a potential for confusion, particularly over the oral drugs or chemo drugs, because all those drugs in theory could be [Part] B or D drugs.”

In the months leading up to the January start of Part D, CMS has actively been spending time on the education of, communication with, and enrollment of beneficiaries, but outreach to physicians about the drug benefit is an area that needs work, Dr. Kelman said. “Is it toolkits, training sessions, CME?” he asked the panel.

Such tools are important, he noted, as “it's very clear that the practicing physician will be the point of contact for the beneficiary” who needs guidance on what to do about the new benefit.

No physician wants patients to miss out on the Part D benefit, Dr. Kelman noted, “especially because the low-income subsidy is a good benefit.

“There [are] no premiums, no gap, a minimum copay, no deductible, and a full catastrophic benefit.”

Medicare needs input on how it could interact with physicians on formulary changes, such as matching the formulary with the patient's current drug list, he said.

In a resolution, PPAC indicated it would complement the efforts of CMS to disseminate information to the public about the Part D benefit program.

CMS, in the meantime, is developing a new Web tool to help facilitate the enrollment process of the new Part D benefit, Dr. Kelman said.

This new tool “will allow the beneficiary and the physician to identify the plans that the [beneficiary] has been auto-enrolled into or has actively enrolled into,” with additional information on the Medicare drug cards.

Auto-enrollment has been a big question in particular for the full-benefit dual-eligibles (those patients who are eligible fore Medicare and Medicaid), he said. “Now they can do it on the Web or, more likely, their physician, pharmacist, or social worker can do it on the Web.”

WASHINGTON — The full cost of drugs obtained through patient-assistance programs should be counted as out-of-pocket expenses under the new Medicare Part D prescription drug benefit, according to council members at a meeting of the Practicing Physicians Advisory Council.

The Centers for Medicare and Medicaid Services (CMS) should work with the Health and Human Services Department's Office of Inspector General to give final guidance on this issue, the panel stated.

Under the coming Part D benefit, until the patient has met his or her out-of-pocket expense limit, the patient has to pay for the drug, said PPAC member Barbara McAneny, M.D., from Albuquerque. If the patient can't afford it, but “we obtain it for free from the pharmaceutical companies, and if it doesn't count toward true out-of-pocket expenses, the patient will never get through the out-of-pocket [limit] and into the benefit.”

Jeffrey Kelman, M.D., medical officer with the CMS Center for Beneficiary Choices, told the council that there are circumstances in which out-of-pocket expenses would be covered: Payments made by qualified state pharmaceutical assistance programs toward copayments or other cost-sharing would count toward true out-of-pocket expenses, for example, in terms of reaching the $3,600 out-of-pocket limit before reinsurance, he said.

However, payments from a third-party insurance company—or from government agency policies—would not, he said.

For the Part D benefit, CMS has divided the country into 34 regions, and all will have robust coverage with several Part D drug plans available for beneficiaries of all incomes and for dual-eligible patients in the Medicare and Medicaid programs, Dr. Kelman told the PPAC.

He expressed confidence that beneficiaries would be able to afford the benefit. The average monthly premium for the benefit is $32.30 nationally, lower than what the agency expected, he said.

Dr. McAneny noted that rumors were floating around regarding whether Part B drugs—such as oral chemotherapy agents that are covered under the medical benefit as opposed to the pharmacy benefit—would be moving over to Part D.

“At the moment, those drugs aren't moving anywhere,” Dr. Kelman said. “There's talk of it because, starting in January, there will be two drug benefits, and there is a potential for confusion, particularly over the oral drugs or chemo drugs, because all those drugs in theory could be [Part] B or D drugs.”

In the months leading up to the January start of Part D, CMS has actively been spending time on the education of, communication with, and enrollment of beneficiaries, but outreach to physicians about the drug benefit is an area that needs work, Dr. Kelman said. “Is it toolkits, training sessions, CME?” he asked the panel.

Such tools are important, he noted, as “it's very clear that the practicing physician will be the point of contact for the beneficiary” who needs guidance on what to do about the new benefit.

No physician wants patients to miss out on the Part D benefit, Dr. Kelman noted, “especially because the low-income subsidy is a good benefit.

“There [are] no premiums, no gap, a minimum copay, no deductible, and a full catastrophic benefit.”

Medicare needs input on how it could interact with physicians on formulary changes, such as matching the formulary with the patient's current drug list, he said.

In a resolution, PPAC indicated it would complement the efforts of CMS to disseminate information to the public about the Part D benefit program.

CMS, in the meantime, is developing a new Web tool to help facilitate the enrollment process of the new Part D benefit, Dr. Kelman said.

This new tool “will allow the beneficiary and the physician to identify the plans that the [beneficiary] has been auto-enrolled into or has actively enrolled into,” with additional information on the Medicare drug cards.

Auto-enrollment has been a big question in particular for the full-benefit dual-eligibles (those patients who are eligible fore Medicare and Medicaid), he said. “Now they can do it on the Web or, more likely, their physician, pharmacist, or social worker can do it on the Web.”

WASHINGTON — Vendors should not be allowed to cut off distribution of drugs to patients regardless of their ability to pay under Medicare's new drug acquisition program, the Practicing Physicians Advisory Council recommended.

Scheduled to begin mid-2006, the Medicare competitive acquisition program (CAP) for Part B drugs and biologicals will select vendors through a bidding process to bill Medicare for these types of drugs and collect coinsurance or deductibles from patients.

Currently, physicians must purchase these drugs and biologicals from a distributor or manufacturer and then bill Medicare for reimbursement, which is set at a statutorily mandated payment rate of 106% of the manufacturer's average sales price (or ASP + 6%). Medicare pays 80% of this rate, and the physician collects a 20% copayment from the beneficiary.

Under the CAP, the only thing the physician has to do is purchase the drugs from the preselected vendors.

The program was designed to reduce the administrative burden for physicians by taking them out of the financial loop. However, it also means that physicians won't have as much control over these drugs—and that vendors can elect not to ship a drug if the patient has not met some of the copay obligations.

This system will inevitably work against patients who need therapy but have no money and the physicians who treat them, said Barbara McAneny, M.D., a member of the PPAC and an oncologist, who proposed the recommendation. If the patient is unemployed, “there is no way to make that copay,” she said.

Physicians are required by law to attempt to collect those copayments, “but we know that we're going to end up eating [the cost of the drug] because the patient doesn't have it.” However, the physician is going to continue treating those patients.

The provision that an executive of a vendor corporation can make the decision to cut somebody off 15 days after they've failed to make a payment is unfair, Dr. McAneny said. The vendors “never have to face that person and say, 'I'm sorry, you get to die now.' But when I'm in my practice looking at that person, that's what it will come down to. The person they'll see will be me.”

From a moral and ethical standpoint, the interim final rule leaves physicians with only one option: to opt out of the CAP to avoid abandoning patients, continue to purchase drugs on the ASP + 6% market, receive 86% of the cost of the drug, “and chew up the rest,” she said.

Medicare's reimbursement under ASP can fall short of what the drugs actually cost, given fluctuations in what distributors and manufacturers charge for the drugs.

“I assume the vendors, who tend to be large pharmaceutical manufacturing corporations, would be in a much better position to eat those costs than I would as an individual physician,” Dr. McAneny said.

Amy Bassano, director of the division of ambulatory services at the Centers for Medicare and Medicaid Services (CMS) Center for Medicare Management, noted that Medicare supplier provider agreements do not require services to be provided except in cases of emergency and civil rights. “That's what we're coming up against,” she said. However, there are cases where coinsurance could be waived if there is a demonstrated financial hardship and the vendor made an attempt to collect, she added.

The panel decided that CMS should reevaluate its contention that working with CAP vendors would not increase the administrative burden of physicians.

In other PPAC recommendations:

▸ CMS should work with Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, to clarify how Congress intended the ASP and CAP to function independently of each other.

▸ CAP vendor prices should not be included in the calculation of the ASP. The inclusion is duplicative and unfair to physicians not participating in the CAP, the PPAC determined.

Given that the CMS has recognized the increased cost of dispensing drugs by pharmacies and has added 2% of the average sales price to cover pharmacy overhead costs under the ASP, the PPAC recommended that the CMS “treat physicians equally” and add 2% for physicians using the ASP + 6% and a dispensing fee for physicians using the CAP.

Physicians under the interim final rule would have only 14 days to submit to Medicare carriers procedural claims, including all necessary codes, for the administration of the drugs. Taking into account the challenges associated with meeting that deadline, the PPAC recommended that the time frame be extended to 30 days.

Also, CAP participation should be determined on an individual basis, and not as a group requirement, the panel recommended.

Under the interim final rule, if one physician in a group practice decides to participate in the CAP, all of the physicians in that practice are forced to do so, Ronald Castellanos, M.D., chairman of the PPAC, said in an interview. This is the only requirement under Medicare where an individual determines whether a group participates, he said.

The program's launch was originally scheduled for January 2006, but it was delayed for 6 months after the CMS announced the suspension of the vendor bidding process to allow more time for review of public comments.

The agency expects to publish a final rule on the CAP in late 2005, which would reopen the bidding process. Drugs could be first delivered under the program by July 2006.

WASHINGTON — Vendors should not be allowed to cut off distribution of drugs to patients regardless of their ability to pay under Medicare's new drug acquisition program, the Practicing Physicians Advisory Council recommended.

Scheduled to begin mid-2006, the Medicare competitive acquisition program (CAP) for Part B drugs and biologicals will select vendors through a bidding process to bill Medicare for these types of drugs and collect coinsurance or deductibles from patients.

Currently, physicians must purchase these drugs and biologicals from a distributor or manufacturer and then bill Medicare for reimbursement, which is set at a statutorily mandated payment rate of 106% of the manufacturer's average sales price (or ASP + 6%). Medicare pays 80% of this rate, and the physician collects a 20% copayment from the beneficiary.

Under the CAP, the only thing the physician has to do is purchase the drugs from the preselected vendors.

The program was designed to reduce the administrative burden for physicians by taking them out of the financial loop. However, it also means that physicians won't have as much control over these drugs—and that vendors can elect not to ship a drug if the patient has not met some of the copay obligations.

This system will inevitably work against patients who need therapy but have no money and the physicians who treat them, said Barbara McAneny, M.D., a member of the PPAC and an oncologist, who proposed the recommendation. If the patient is unemployed, “there is no way to make that copay,” she said.

Physicians are required by law to attempt to collect those copayments, “but we know that we're going to end up eating [the cost of the drug] because the patient doesn't have it.” However, the physician is going to continue treating those patients.

The provision that an executive of a vendor corporation can make the decision to cut somebody off 15 days after they've failed to make a payment is unfair, Dr. McAneny said. The vendors “never have to face that person and say, 'I'm sorry, you get to die now.' But when I'm in my practice looking at that person, that's what it will come down to. The person they'll see will be me.”

From a moral and ethical standpoint, the interim final rule leaves physicians with only one option: to opt out of the CAP to avoid abandoning patients, continue to purchase drugs on the ASP + 6% market, receive 86% of the cost of the drug, “and chew up the rest,” she said.

Medicare's reimbursement under ASP can fall short of what the drugs actually cost, given fluctuations in what distributors and manufacturers charge for the drugs.

“I assume the vendors, who tend to be large pharmaceutical manufacturing corporations, would be in a much better position to eat those costs than I would as an individual physician,” Dr. McAneny said.

Amy Bassano, director of the division of ambulatory services at the Centers for Medicare and Medicaid Services (CMS) Center for Medicare Management, noted that Medicare supplier provider agreements do not require services to be provided except in cases of emergency and civil rights. “That's what we're coming up against,” she said. However, there are cases where coinsurance could be waived if there is a demonstrated financial hardship and the vendor made an attempt to collect, she added.

The panel decided that CMS should reevaluate its contention that working with CAP vendors would not increase the administrative burden of physicians.

In other PPAC recommendations:

▸ CMS should work with Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, to clarify how Congress intended the ASP and CAP to function independently of each other.

▸ CAP vendor prices should not be included in the calculation of the ASP. The inclusion is duplicative and unfair to physicians not participating in the CAP, the PPAC determined.

Given that the CMS has recognized the increased cost of dispensing drugs by pharmacies and has added 2% of the average sales price to cover pharmacy overhead costs under the ASP, the PPAC recommended that the CMS “treat physicians equally” and add 2% for physicians using the ASP + 6% and a dispensing fee for physicians using the CAP.

Physicians under the interim final rule would have only 14 days to submit to Medicare carriers procedural claims, including all necessary codes, for the administration of the drugs. Taking into account the challenges associated with meeting that deadline, the PPAC recommended that the time frame be extended to 30 days.

Also, CAP participation should be determined on an individual basis, and not as a group requirement, the panel recommended.

Under the interim final rule, if one physician in a group practice decides to participate in the CAP, all of the physicians in that practice are forced to do so, Ronald Castellanos, M.D., chairman of the PPAC, said in an interview. This is the only requirement under Medicare where an individual determines whether a group participates, he said.

The program's launch was originally scheduled for January 2006, but it was delayed for 6 months after the CMS announced the suspension of the vendor bidding process to allow more time for review of public comments.

The agency expects to publish a final rule on the CAP in late 2005, which would reopen the bidding process. Drugs could be first delivered under the program by July 2006.

WASHINGTON — Vendors should not be allowed to cut off distribution of drugs to patients regardless of their ability to pay under Medicare's new drug acquisition program, the Practicing Physicians Advisory Council recommended.

Scheduled to begin mid-2006, the Medicare competitive acquisition program (CAP) for Part B drugs and biologicals will select vendors through a bidding process to bill Medicare for these types of drugs and collect coinsurance or deductibles from patients.

Currently, physicians must purchase these drugs and biologicals from a distributor or manufacturer and then bill Medicare for reimbursement, which is set at a statutorily mandated payment rate of 106% of the manufacturer's average sales price (or ASP + 6%). Medicare pays 80% of this rate, and the physician collects a 20% copayment from the beneficiary.

Under the CAP, the only thing the physician has to do is purchase the drugs from the preselected vendors.

The program was designed to reduce the administrative burden for physicians by taking them out of the financial loop. However, it also means that physicians won't have as much control over these drugs—and that vendors can elect not to ship a drug if the patient has not met some of the copay obligations.

This system will inevitably work against patients who need therapy but have no money and the physicians who treat them, said Barbara McAneny, M.D., a member of the PPAC and an oncologist, who proposed the recommendation. If the patient is unemployed, “there is no way to make that copay,” she said.

Physicians are required by law to attempt to collect those copayments, “but we know that we're going to end up eating [the cost of the drug] because the patient doesn't have it.” However, the physician is going to continue treating those patients.

The provision that an executive of a vendor corporation can make the decision to cut somebody off 15 days after they've failed to make a payment is unfair, Dr. McAneny said. The vendors “never have to face that person and say, 'I'm sorry, you get to die now.' But when I'm in my practice looking at that person, that's what it will come down to. The person they'll see will be me.”

From a moral and ethical standpoint, the interim final rule leaves physicians with only one option: to opt out of the CAP to avoid abandoning patients, continue to purchase drugs on the ASP + 6% market, receive 86% of the cost of the drug, “and chew up the rest,” she said.

Medicare's reimbursement under ASP can fall short of what the drugs actually cost, given fluctuations in what distributors and manufacturers charge for the drugs.

“I assume the vendors, who tend to be large pharmaceutical manufacturing corporations, would be in a much better position to eat those costs than I would as an individual physician,” Dr. McAneny said.

Amy Bassano, director of the division of ambulatory services at the Centers for Medicare and Medicaid Services (CMS) Center for Medicare Management, noted that Medicare supplier provider agreements do not require services to be provided except in cases of emergency and civil rights. “That's what we're coming up against,” she said. However, there are cases where coinsurance could be waived if there is a demonstrated financial hardship and the vendor made an attempt to collect, she added.

The panel decided that CMS should reevaluate its contention that working with CAP vendors would not increase the administrative burden of physicians.

In other PPAC recommendations:

▸ CMS should work with Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, to clarify how Congress intended the ASP and CAP to function independently of each other.

▸ CAP vendor prices should not be included in the calculation of the ASP. The inclusion is duplicative and unfair to physicians not participating in the CAP, the PPAC determined.

Given that the CMS has recognized the increased cost of dispensing drugs by pharmacies and has added 2% of the average sales price to cover pharmacy overhead costs under the ASP, the PPAC recommended that the CMS “treat physicians equally” and add 2% for physicians using the ASP + 6% and a dispensing fee for physicians using the CAP.

Physicians under the interim final rule would have only 14 days to submit to Medicare carriers procedural claims, including all necessary codes, for the administration of the drugs. Taking into account the challenges associated with meeting that deadline, the PPAC recommended that the time frame be extended to 30 days.

Also, CAP participation should be determined on an individual basis, and not as a group requirement, the panel recommended.

Under the interim final rule, if one physician in a group practice decides to participate in the CAP, all of the physicians in that practice are forced to do so, Ronald Castellanos, M.D., chairman of the PPAC, said in an interview. This is the only requirement under Medicare where an individual determines whether a group participates, he said.

The program's launch was originally scheduled for January 2006, but it was delayed for 6 months after the CMS announced the suspension of the vendor bidding process to allow more time for review of public comments.

The agency expects to publish a final rule on the CAP in late 2005, which would reopen the bidding process. Drugs could be first delivered under the program by July 2006.