Medicare Physician Fee Schedule (2009 MPFS): Yes, there's a 5.7% cut, but it's packed with goodies like telehealth and gainsharing

Congress couldn’t be bothered to stop grandstanding before July 4th long enough to undo the latest SGR-driven physician pay cut (over 10%). 

This week, CMS rolled out its 2009 MPFS with an SGR-mandated 5.7% cut in place, while at the same time advising physicians not to submit bills until Congress comes to its senses and undoes this year’s 10% cut. 

If the proposed rule contained only this doom and gloom, there wouldn’t be much to say about it.  However, CMS loves to stuff all sorts of goodies into these fee schedule rules, and the current proposed rule is no exception.  There are more measures to be added to the PQRI, but several other pieces are of greater interest:

First, physician practices will now be subject to IDTF rules.  The idea is to bring some standards to physician-office-based diagnostic testing.  This may bring a bit of dislocation as practices implement some new policies and procedures to assure compliance with standards, as well as work their way through the IDTF enrollment process.

Second, Medicare is proposing to cover telehealth — telephone or email encounters for established patients (with payments on par with in-person visits).  A smattering of commercial insurers already do this, but this step, if finalized, will promote more efficient use of scarce primary care provider resources and will likely pave the way for further adoption in the private sector.

Third, CMS has issued its first generally applicable proposed gainsharing rule, presented as the new “Incentive Payment and Shared Savings Programs” subsection of the Stark rules. (See the commentary at 73 FR 38548-58 (7/7/08) and the regs at 8604-06; pages 48-58 and 104-06, respectively, of the 2009 MPFS rule.) 

Interestingly, there is no anti-kickback safe harbor promulgated to go along with the Stark exception, so any gainsharing program would still have to comply with AKS.  Since the OIG has issued about a dozen advisory rulings on the AKS issues raised by gainsharing, the CMS suggestion that one may now go out and gainshare so long as one complies with AKS appears, at first blush, to be less than thrilling. The fact that the federales saw the need to amend the Stark rules to allow for gainsharing also raises an interesting question about prosecutorial discretion with respect to gainsharing programs implemented under OIG advisories . . . .  In any event, the criteria set forth in this proposed reg dovetail with criteria set forth in the OIG gainsharing advisories.  Two differences of note: (1) the requirement that an outside clinical expert bless the plan (parallel to the specialty society blessings of best practices obtained by Goodroe for the gainsharing plans approved through the OIG process) and (2) the ability to run a gainsharing program for up to 3 years (vs. the 1-year limit in the OIG advisories).

I suppose we’ll have to wait for a parallel amendment to the AKS regulations before providers can engage in gainsharing behavior willy-nilly.  CMS demonstrations such as the PHCD specifically waived both Stark and AKS.  CMS noted repeatedly in its commentary, however, that the new Stark exception covers a broader range of P4P initiaitives than just gainsharing, and some of them could fit within existing AKS safe harbors.  This is where the action will be, assuming final promulgation of the reg this fall.

Finally, CMS noted in the commentary that this draft was admittedly narrow, since it was difficult to draft a gainsharing rule of general applicability that could encompass all the sorts of things that providers might wish to do, and it is soliciting comments on a variety of specific points. 

The comment period is open through August 29 and a final regulation is expected by November 1, effective January 1, 2009.

— David Harlow

(Updated 7/9/08)