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MGMA Submits Comments to CMS on Proposed Rule Affecting Physician Fees

10/10/2006

The Medical Group Management Association (MGMA) has submitted to the Centers for Medicare and Medicaid Services (CMS) its comments in response to the CMS proposed rule, “Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2007,” as published in the Aug. 22, 2006 issue of the Federal Register.

The letter to Mark McClellan, MD, PhD, administrator of CMS, written by William F. Jessee, MD, FACMPE, the president and CEO of the MGMA, reads as follows: “We appreciate the Centers for Medicare & Medicaid Services’ (CMS) outreach to the provider community and their willingness to participate in constructive dialogue to improve the Medicare program. We look forward to continuing to collaborate on this and other administrative simplification issues. For these reasons, MGMA offers the following critiques and recommendations related to this rule, as outlined below. MGMA, founded in 1926, is the oldest and largest organization representing physician group practices. MGMA’s 20,000 members manage and lead more than 12,000 organizations nationwide in which over 242,000 physicians practice medicine. Individual members, including practice managers, clinic administrators and physician executives, work on a daily basis to ensure that the financial and administrative mechanisms within group practices operate efficiently so physician time and resources can be focused on patient care.

Sustainable Growth Rate

The downward spiral of payment updates for providers paid under the Medicare physician fee schedule is prolonged for the fifth consecutive year with the 2007 projected cut of 5.1 percent. Without Congressional action, physician payments would have been reduced over 19 percent since 2001. If the current trend remains, providers will face difficult decisions as they evaluate the economic practicability of caring for Medicare beneficiaries. According to the responses of more than 1,600 group practices to a June 2006 MGMA questionnaire, 39 percent of practices anticipate limiting the number of Medicare patients seen in their offices if reimbursement is reduced by the projected 5.1 percent. Another 19 percent may refuse to accept new Medicare patients. The economic viability of practices is further undermined by the widespread use of the Medicare physician fee schedule as a benchmark for private insurance reimbursement rates.

MGMA has conducted extensive surveys of medical practice costs for more than 50 years. MGMA-collected data indicate that the cost of operating a group practice rose by an average 4.48 percent per year over the last 10 years. In fact, between 2000 and 2005, MGMA data show that operating costs have risen more than 26.1 percent. Medicare reimbursement rates for physician services have fallen far short of the increased cost of delivering quality services to Medicare patients. Agency-initiated administrative modifications can help mitigate the anticipated cuts for calendar year 2007 and beyond.

Definition of “physician services”

The statutory language of the Social Security Act that defines the payment update formula requires CMS to assess the allowed and actual expenditures of the Medicare program. MGMA maintains that the definition used by CMS for “physician services” in the sustainable growth rate (SGR) formula is inappropriate because of the inclusion of the cost of physician-administered outpatient prescription drugs. A significant factor in the growth in Medicare expenditures has been the introduction of the program’s coverage of costly new prescription drugs administered in the physician’s office. Since 1996 (the SGR base year), SGR spending for physician-administered drugs has more than doubled. These expenses reflect the acquisition of products rather than services rendered by a medical professional, and therefore, are different from “physician services.” The inclusion of drugs in the definition of physician services is inaccurate and runs counter to CMS’ stated goal of paying appropriately for drugs and physician services. MGMA asserts that the definition of “physician services,” as required by the statute, does not include the cost of prescription drugs.

A separate definition of physician services used by the Medicare program clearly distinguishes physician-administered outpatient prescription drugs from services rendered by physicians. CMS adopted this definition in the Dec. 12, 2002 “Inherent Reasonableness” rule (67 FR 76684). Plainly, the definition of physician services must be applied consistently for fair and equitable administration of the Medicare program. Furthermore, the recent reforms to the payment system for physician-administered prescription drugs establish a separate venue to address the utilization and cost of drugs. MGMA strongly urges CMS to remove prescription drug expenditures from the definition of “physician services” used to calculate the physician payment update factor.

Full impact of law and regulation

The current SGR calculation fails to adequately capture the impact of changes to laws and regulations as required by law. For example, the formula fails to account for the downstream services that will result when the new screening benefits reveal health problems. The same is true of the Medicare prescription drug benefit, which will unquestionably lead to more medical visits, and in turn, will generate additional tests and care. The SGR does not account for this inevitable spending. Additionally, the impact of CMS coverage decisions is excluded from the SGR entirely, even though those decisions may have as great an impact on patient demand for services as a statutory change. Such

changes are likely to be highly beneficial for patients, but they may also contribute to negative reimbursement updates through the SGR calculation. MGMA believes CMS has the administrative authority to better account for the full impact of such changes to law and regulation, and vigorously urges CMS to assert this authority.

MEI calculation

Another component of the Medicare physician reimbursement formula that requires improvement is the Medicare Economic Index (MEI). The MEI was established in 1973 to reflect the rising cost of practicing medicine. However, the current MEI calculation is showing its age, and fails to incorporate all of the costs a medical group practice bears to care for patients. MGMA agrees with a 2004 recommendation by the Practicing Physicians Advisory Council to CMS that the MEI be expanded to reflect costs, such as compliance with extensive new billing regulations, hiring new staff and increased training for current staff to comply with expanding regulations. The MEI also should reflect steps taken to improve patient safety and include those additional costs not included in the MEI in 1973, but which clearly must be a part of the calculation today.

Additionally, the MEI must reflect the modern level of support staff. MGMA is particularly concerned that employee wages used in the MEI formula do not capture those of highly skilled professionals now considered essential for the delivery of medical services. These professionals include nurse practitioners, physician assistants, certified nurse specialists, nurse midwives, certified registered nurse anesthetists, occupational therapists, physical therapists, certified practice managers, computer professionals, transcriptionists and certified coders. MGMA recommends that CMS work with other government agencies such as the Bureau of Labor Statistics and private organizations to identify other nationally collected data sources or to collaborate in the development of survey methodology and data collection if no such source currently exists.

Practice Expense

MGMA brings a particularly valuable perspective to this issue. As a research-oriented organization, MGMA has collected practice expense data since 1955. Our data collection involves group practices which range in size from two to several hundred physicians. As such, we understand the magnitude and complexity of CMS’ task. In addition, MGMA represents an equal proportion of primary and specialty care practices that are in the primary care and specialty care sectors. Consequently, we are able to detach ourselves from the “outcome” and focus primarily on the “methodology” applied.

Methodology

MGMA supports CMS’ decision to implement a bottom-up methodology as opposed to the previous topdown approach. While the results of both approaches depend on the quality of the medical practice expense data collected, MGMA believes the bottom-up approach has a greater likelihood of resulting in accurate values. History has shown that calculating practice expenses using a data- based methodology is more accurate when compared to a method that uses estimates of actual inputs. In previous years, CMS has provided a significant amount of specificity regarding the process for developing the practice expense methodology. This year CMS did not include in the NPRM a thorough

explanation of the calculations to allow specialties to determine their individual impact level of the practice expense changes to their specialty. CMS did not present sufficient examples to the provider community to make the change in methodology understandable. MGMA recommends that CMS provide explicit examples for selected specialties to demonstrate to the provider community how the methodology is calculated. In addition, CMS provides data on the first and fourth year of the transition period; however, there is no data provided on the impact of the changes to the methodology for years two and three. MGMA recommends that CMS provide that information to the provider community in an interim final rule with comment period.

Data Source

As in previous comments, MGMA maintains its concern that the practice expenses methodology is based on the American Medical Association’s (AMA) Socioeconomic Monitoring System (SMS) data, which is dated, and the Clinical Practice Expert Panel’s (CPEP) data, which is extremely subjective. The SMS data used to calculate practice expenses for FY2007 is from 1995-1999. MGMA recommends CMS conduct a new SMS survey in order to develop more accurate data that would result in equality for all specialties. The entity or organization contracted to conduct this new survey needs to be one that has proven its reliability in this area previously.

MGMA agrees with CMS that while the AMA SMS survey data is dated, a survey of this nature is the most appropriate and only primary data set in existence to determine specialty-specific cost pools. We believe that not only does a new survey need to be conducted, but the methodology for conducting the survey needs to be enhanced as described below. It is critical that the unit of observation used in a new survey reflect the organization rather than individual physicians who are owners or part-owners of their practices. The primary responsibility of the particular respondents is often the practice of medicine rather than the business operations of the practice. There are several reasons why the organization is preferable. First, the respondent must have both adequate knowledge about the business of medical practices and a comprehensive understanding about the information being sought. Second, the respondent must have the ability to access such information for the entire practice.

While AMA’s survey response rate has been strong historically at about 60 percent, not all respondents answered the practice expense portion of the survey. Specifically, the 1996 SMS report based on 1995 data indicates that of the 4004 overall respondents to the survey, 2352 were self-employed physicians and therefore eligible to report data on practice expenses. Of the 2352, 1552 provided total professional expenses, 1595 payroll, 1504 medical equipment, 1538 medical supply optimal resources, and 1573 office expenses. The overall response rate to the practice expense portion was 39.9 percent. While we understand that it is difficult for physicians who are owners or part-time owners of practices to respond to the practice expense portion, MGMA is hopeful that the response rate and thus the quality of responses will improve when the practice becomes the unit of observation.

AMA collected data on clinical labor, supplies, equipment and other practice costs. MGMA recommends that the entity chosen to conduct a new survey refine the expense categories to identify ancillary service expenses and activity data. Our experience has shown that medical groups with radiology or laboratory ancillary services have different expense experience than medical groups that do not have these services. Future refinements of the practice expense Relative Value Unit (RVU) component should isolate the effect of ancillary services from the total expense profile of the practice. This can only be accomplished if ancillary service expense data is separately collected. When conducting a new survey, there must be a mechanism to validate data. The benefit of collecting data from profit and loss statements is that the practice expense responses cannot be exaggerated.

MGMA remains concerned about the quality of the data gathered by the CPEPs but is pleased that it plays less of a role in the bottom-up methodology. Historically, our concern can be summarized as follows: (1) the composition of the CPEPs was inadequate as it consisted primarily of practicing physicians without adequate representation from practice managers; (2) there was no uniform policy on how CPEPs should deal with issues such as duplication of time or efficiencies that might result from performing more than one task at a time; and (3) there was inadequate time allotted for the CPEPs to meet. For example, because of the vast number of codes the CPEP had to value during their meetings, there simply was not enough time to devote to differences among codes.

As CMS, or an entity in its place, considers the practice expense issue, it must seek input from practice managers, especially since the information sought focuses largely on clinical and administrative staff time and not on physician time. Assuming the make-up of the panels is appropriate, they have the potential to refine the CPEP’s data. However, to the extent that the panels will not have access to any actual practice expense data gathered from physician practices, they will have limited effectiveness. Nevertheless,

convening panels could help identify egregious errors and/or highly anomalous results. MGMA recommends that panels be convened subsequent to the accumulation of actual practice expense data to allow them to complete their work based on more accurate information. MGMA is concerned about the process that CMS used to determine practice expenses. The bottom-up methodology loses an element of the data that accounts for the significant differences between practices of the same specialty. To create a resource-based approach that conforms to real-world practice costs, CMS must collect actual service-level practice expense data directly from physician practices and base both direct and indirect PE RVUs on that data. Such data would give CMS a far more accurate database for direct costs than the current estimates developed by the CPEPs’ process. Recognizing time constraints established by Congress and limited resources, at the very least, CMS should undertake a limited study on a cross-section of practice settings nationwide to obtain actual practice expense data from physicians’ offices. The agency could use this data, however limited, to validate or refine the existing data obtained

through the panels’ process.

Four-year transition

MGMA supports a transition period and applauds CMS for the development of a transition period. We appreciate CMS’ consideration of the upcoming negative update factor for CY 2007; however, we believe that the implementation timeline is not ideal because of the level of uncertainty surrounding the cumulative impact of the reductions in reimbursements on medical practices. MGMA recommends that CMS delay the implementation of practice expenses until all of the provisions within the Medicare

Modernization Act have been implemented. This would allow all specialties sufficient time to implement provisions regulated prior to the practice expense changes.

Budget neutrality adjustor

MGMA believes that CMS should reconsider applying the budget neutrality adjustment factor to work RVUs. CMS does not provide an adequate rationale for shifting the budget neutrality adjustor to the work RVUs. In the past, CMS has suggested the same proposal and the provider community responded negatively. By placing the budget neutrality factor on the work RVUs, the affect to specialties is varied because of the different levels of work involved. Constant variation in the work RVUs due to budget neutrality adjustments hinders the process of establishing work RVUs for new and revised services.

MGMA recommends that CMS apply the budget neutrality adjustor to the conversion factor in order to make the calculations more equitable and understandable to the provider community. MGMA believes that applying the budget neutrality adjustor to the conversion factor will have less impact on other payers who use the Medicare resource-based relative value scale and will be consistent with the notion of budget neutrality.

CMS is moving toward making pricing information for physicians, hospitals and other providers more transparent. MGMA recommends that CMS apply the principles of transparency to the Medicare policy that govern these prices. By applying the budget neutrality adjustment to the conversion factor, pricing information to the provider community will be more transparent. Transparency of the financial effect of these changes will enable physicians and policymakers to more easily understand the impact of the cuts.

In order to achieve CMS’ goal of transparency of pricing information, the budget neutrality adjustments should be made to the conversion factor. GPCIs As noted in our previous comments, MGMA remains opposed to CMS using inappropriate data sources

to calculate the geographic practice cost indices (GPCIs). This includes the use of census data to calculate GPCI values. The very nature of the data render the values outdated by the time CMS is able to use the information. Additionally, although the statute mandates updating the GPCI values every three years, they are in essence updated every 10 years since the census is collected once every decade. MGMA maintains that this is unacceptable. A separate source with more timely data must be identified to adhere to the three-year update schedule that Congress intended. MGMA recommends that CMS work with other government agencies, including the Bureau of Labor Statistics and private organizations, to identify alternative data sources. Alternatively, CMS should work with these groups to identify an appropriately indexed data source to meet the statutory requirements. Of particular concern to MGMA is that employee wages used in the GPCI formula do not capture highly skilled professionals now considered essential for the delivery of medical services. These professionals include nurse practitioners, physician assistants, certified nurse specialists, nurse midwives, certified registered nurse anesthetists, occupational therapists, physical therapists, certified practice managers, computer professionals, transcriptionists and certified coders. While it remains true that the 2000 Census definitions of certain medical professionals are more expansive than the 1990 definitions, limited improvements result for the updated GPCI values. The wages of several prominent professions continue to be excluded, including physician assistants, occupational and physical therapists, certified practice managers, IT professionals, transcriptionists and certified coders. MGMA recommends that CMS revise the GPCIs to include these employees to ensure that the occupations used in the formula reflect the numerous categories of medical workers found in modern practices.

As in years past, the office rental indices used to calculate the practice expense GPCIs are based on the Department of Housing and Urban Development’s (HUD) residential apartment rent data. While MGMA is sympathetic to the difficulty CMS has in identifying alternative sources for pricing medical office space, MGMA remains opposed to the use of residential and not commercial data for this purpose. Such use is inconsistent with the core objective of the Balanced Budget Act of 1997 to make Medicare payments resource based.

As noted in our previous comments, MGMA also highlights the findings of the Government Accountability Office (GAO) in their March 2005 report on HUD estimates of fair market rents (GAO-05-342). The report identified major concerns raised by the HUD estimates, substantiating the level of inaccuracy reported by many MGMA members. The report also explains that HUD will soon use a new data source, the American Community Survey (ACS). It is important to note that ACS processes rates

differently than HUD has in the past. With this impending data shift, MGMA urges CMS to work with HUD and the Bureau of Labor Statistics to determine whether the values populating the GPCI calculations for medical practice rent are accurate and will meet the agency’s needs once ACS data is adopted by HUD.

Miscellaneous Coding Issues

MGMA appreciates CMS seeking input on radiation oncology because there is tremendous uncertainty on how services should be submitted both during the treatment period as well as in the post treatment period, which is defined as three months in the CPT definition. Brachytherapy and Proton Beam therapy fall under the narrative instructions in the CPT manual for Radiation Oncology. In the narrative instructions,

it specifically states that the services included in this section (77261-77999) includes "normal follow-up care during treatment and for three months following its completion.” The provisions do not explicitly state that CMS will pay for the post-op visit separately; therefore, MGMA recommends that CMS specifically state that there will be separate payments for any and all medically necessary post therapy visits based on the documented level of Evaluation and Management (E/M) service for the post procedure encounter(s). CMS’ proposed change would likely cause some problems for practices with private payer contracts that follow Medicare's RVUs and CPTs definitions. The RVUs will change, but by current CPT definition, no other follow-up evaluation and management services are billable for 90 days after treatment. MGMA is aware that CMS does not have jurisdiction over other payers’ actions, but we do recommend that if this

change occurs that it take place concurrently with a revision to the CPT manual to remove the 90-day global period from the definition of these services.

Deficit Reduction Act (DRA) Proposals

Imaging

CMS will reduce payment for the technical component for multiple imaging services performed on contiguous body parts by 25 percent. While MGMA appreciates CMS’ decision to limit cuts in payment to 25 percent rather than the proposed 50 percent for calendar year 2007, we are concerned that the 25 percent reduction is arbitrary. CMS claims to have based this figure on data relating to costs, but CMS has not released its actual calculations used to justify the 25 percent reduction. MGMA maintains that the proposed cuts do not cover costs and would limit patient access to imaging services. We urge CMS to share its data before making a policy change that would severely impact certain specialties. While MGMA appreciates CMS’ decision to calculate the multiple services reduction before applying the statutorily mandated cap (the OPPS amount), we urge further consideration and evaluation of the multiple services reduction before it is implemented.

Furthermore, MGMA urges CMS to educate providers of diagnostic imaging services and Medicare contractors regarding the continued ability to bill globally for diagnostic imaging services subject to the reduction. As previously experienced with physician scarcity and health professional shortage area payments, global payments for services with technical components that are treated differently caused major system errors and necessitated that these codes be unbundled for several months. MGMA seeks clarification and assurances that these services may continue to be billed globally.

Therapy Cap

CMS implemented two annual therapy caps, one for speech-language pathology and outpatient physical therapy and another for outpatient occupational therapy, on Jan. 1, 2006. In Section 5107(a) of the Deficit Reduction Act of 2005, which was enacted on Feb. 8, 2006, Congress mandated that the Secretary of the Department of Health and Human Services create an exceptions process for the therapy caps. This exceptions process is scheduled to expire on Dec. 31, 2006. MGMA feels that since the exceptions

process is scheduled to expire at the end of the calendar year, CMS should develop a process to deal with exceptions and appeals issues. MGMA believes that the continuity of a process would lessen possible administrative burdens and is willing to assist the administration in developing a procedure.

End-Stage Renal Disease (ESRD) Provisions

Hospital data used

MGMA remains concerned about the appropriateness of using acute care hospital wage index data in the calculation of the ESRD-Composite Payment Wage Rate Index. This index is used to determine payment to both hospital-based and independent ESRD facilities. The use of only hospital data in this calculation would indicate that wages in hospital-based and ambulatory facilities are the same or similar in nature; however, no such determination has been made. In fact, the costs for hospital-based facilities and

ambulatory centers vary greatly. The ESRD-Composite Payment Wage Rate Index needs to take into consideration wages paid in independent facilities, in addition to those paid in acute care hospital inpatient settings. MGMA urges CMS to locate an alternative data source that reflects information directly tied to ESRD facilities.

Use of Floor/Ceiling Values

CMS has again proposed reducing the wage index floor for the ESRD-Composite Payment Wage Rate Index. This decrease will penalize ESRD facilities that have already faced cuts from the transition to the average sales price drug reimbursement methodology. These cuts to facilities’ reimbursement will make it even more difficult to recruit and retain qualified personnel in areas affected by the removal of this floor.

Private Contracts and Opt-Out

MGMA is appreciative of CMS’ efforts to include registered dieticians and nutrition professionals in the definition of a practitioner. This inclusion will provide registered dieticians and nutrition professionals with the same opportunity as other healthcare providers to opt-out of the Medicare program if they so choose, especially in light of the anticipated declines in provider reimbursement.

Reassignment and Physician Self-Referral

The proposed fee schedule contains a number of provisions aimed at curbing what CMS has deemed abusive “pathology pod laboratories.” While some such arrangements may be problematic, the proposed new restrictions would apply much more broadly to all types of provider groups. Given that CMS has not fully explained exactly why “pod labs” are abusive, major changes of general applicability to the reassignment and Stark rules seem both overbroad and premature. If adopted, these changes will certainly inhibit flexibility in group practices, and likely preclude many legitimate arrangements that

enhance patient convenience and quality of care. MGMA urges CMS to target any changes much more narrowly so as to preserve and encourage legitimate arrangements.

MGMA is particularly concerned with CMS’ apparent intention to limit the ability of group practices to provide medically necessary services to patients through collaborative arrangements between groups and independent contractors. Providing specialized and ancillary services though group practices serves patient convenience, enhances coordination of care, facilitates access and patient compliance, and often produces much faster diagnostic or therapeutic benefits, thus improving quality. These benefits apply

equally to the technical component (TC) and the professional component (PC) of diagnostic tests.

Limitations on the ability of an independent contractor to reassign benefits

Group practices utilizing independent contractors on the premises of the practice have long been permitted to accept reassignment of the independent contractors’ benefits. Sec. 952 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) explicitly permits similar reassignment in the case of services provided off-site. At a time when teleradiology and other technological advances make the provision of services off-site feasible and clinically appropriate, this MMA change provided badly needed flexibility. We see no reason to reverse that change now, especially when it has been in effect so briefly.

In comments on the proposed 2005 Medicare physician fee schedule, MGMA expressed concerns regarding CMS’ characterization of these arrangements. "Parties should be mindful that contractual arrangements involving reassignment may not be used to camouflage inappropriate fee-splitting arrangements or payments for referrals." At that time, CMS further solicited comments on program

"vulnerabilities" and proposed to "monitor reassignment arrangements for potential program abuse." MGMA reiterates its concern here. Nearly all physicians and non-physician practitioners participate in the Medicare program in good faith and abide by the program’s rules and regulations. CMS’ restrictive new proposals signal an inherent, and we think unwarranted, distrust of providers without documented proof of program abuse. Rather than finalizing the reassignment provisions proposed, MGMA recommends that

the agency continue using current monitoring techniques employed by Medicare carriers where medical groups document all provider agreements and financial arrangements and provide copies of this documentation to the government upon request. Most, if not all, enrollment contractors request copies of provider contracts, including joint and severable liability stipulations between the provider and group practice, at the time of enrollment. As part of the Medicare enrollment process, Medicare carriers must ensure that arrangements between Medicare providers and their independent contractors are legitimate. If CMS has evidence of abuse uncovered through these efforts, MGMA requests that it be made public, so the medical specialty societies and state medical boards can act to limit the activities of abusive providers. Anti-markup provisions for an independent contractor’s technical component services The proposed rule contains anti-markup provisions that are virtually identical to those contained in the Medicare statute at 42 U.S.C. § 1842(n)(1), as well as in the regulations at 42 CFR § 414.50. There are

also virtually identical provisions in the Medicare Claims Processing Manual (Pub. 100-04), Chap. 1, Sec. 30.2.9. This guidance is sufficient to prevent fraud and abuse, making the provisions included in the current proposal unnecessary and redundant. MGMA is unclear as to the reasoning behind the inclusion of these provisions.

However, MGMA is more concerned by the language CMS has proposed that would require the physician or group to “directly” perform the PC where the group bills for a TC performed by an outside supplier or independent contractor. The use of the term “directly” raises some questions and interferes with a group practice’s ability to contract freely, and MGMA opposes the inclusion of this requirement in the proposal.

According to the American Heritage Dictionary of the English Language 4th Edition (2000), the word “directly” is defined as “[w]ithout anyone or anything intervening.” Based on this definition, a contract between the practice and the independent provider would create an intervening relationship, indicating that the practice could not use an independent contractor to perform the PC if it had already used an independent contractor, be it the same contractor or a different one, to perform the technical component. However, there are tests where it is clinically appropriate for the physician to perform both the TC and the PC of a diagnostic test, and MGMA sees no policy justification for prohibiting a group from contracting for both.

The use of the term “directly” effectively excludes independent contractors from the group practice for some purposes. However, under the definition of a “physician in a group practice” included in the Stark regulations contained in 42 CFR 411.351, an independent contractor is considered a physician in a group practice during the time he is performing patient care services for that practice. Additionally, independent contractors are considered part of a group practice under “incident to” billing rules. Where one or more laws or regulations consider independent contractors to be part of a group practice, it is ill-considered to exclude them from a group practice under other provisions. Group practices spend a great deal of time and money in an effort to comply with federal and state laws and regulations. To create situations where the same individual may legally be permitted to do one thing but not another based purely on the specific facts of the situation is to create a scenario ripe for inadvertent legal violations and a field day for attorneys. This will, in turn, increase the costs of such services and overall practice costs. MGMA is opposed to the proposed changes to an already burdensome and overly complex statute and regulations. Instead of using independent contractor arrangements, group practices may be forced to use part-time employment arrangements. These arrangements may be more costly because of payroll tax and benefit considerations, and they can greatly complicate benefit programs for both the employer and the part-time

employee. It is not clear from the proposal precisely what policy objective CMS seeks to advance by prohibiting the reassignment of TC services in instances where the group practice also contracts for PC services rather than providing those through its own owners and employees. It is clear, however, that the effect of such a prohibition will be to reduce flexibility for groups, and tilt the competitive playing field for certain diagnostic services towards certain specialties. This is a questionable result generally and appears to have

nothing to do with the underlying purposes of either the reassignment rules as they apply to independent contractors, or the anti-markup provisions as they apply to purchased TC services. If there are abuses related to contracting for PC services, they would seem more properly the province of the anti-kickback law and its enforcement.

The use of independent contractors to provide PC services

Anti-markup provisions

MGMA opposes application of the current anti-markup statute, which on its face applies only to TC services, to the PC of a diagnostic test. Independent contractors are reimbursed for their PC services under terms negotiated by the contractor and group practice. Stark and anti-kickback law considerations generally require that compensation meet a fair market value test. Frequently, payment is made based on time spent providing those services, as opposed to a per interpretation price. Alternatively, payment may

be made at a fixed rate per month or year. Yet another model is a per service price reflecting a blended rate of different payor pricing, not just the Medicare allowable amount. In some of these situations, it is impossible for a group practice to determine the unit price of an independent contractor’s individual PC service in order to apply an anti-markup requirement. In others, the anti-markup rule would prevent the group from recouping legitimate administrative costs such as billing, scheduling, transcription, patient records, and similar costs.

Reassignment provisions

While no specific language has been proposed, CMS contemplates new restrictions on the reassignment of PC services. Once again, the rule does not articulate what policy objective is being pursued. Existing manual provisions permit groups to bill for independent contractors providing professional interpretations of diagnostic tests under two different scenarios. One is a reassignment of an independent contractor’s billing rights under the provision adjusted by the MMA discussed above; the other is billing for a purchased interpretation under very restrictive rules and is not technically a reassignment. While admittedly there has been some confusion in the field as to the interplay between these two different manual provisions, MGMA believes they are legally clear. A group may rely on either depending on how it chooses to structure its relationship with the physician providing the interpretation. We urge CMS to leave these provisions as is, thus preserving that flexibility to groups and their contracting partners.

MGMA does not understand what would be accomplished by permitting reassignment only where the reassigning physician does not see the patient. For example, if the treating physician is a “physician in the group” for Stark purposes, and is qualified to perform the PC of a diagnostic test, why require someone else to perform the PC, possibly increasing the cost to the practice and leading to more fragmented rather than better coordinated care?

Independent contractors who reassign their billing privileges to a group do so for many reasons that have little if any potential for abuse. These include administrative simplicity and efficiencies for both practices, global billing, reduced confusion in the minds of patients (one bill and one co-pay as opposed to two of each), one-stop claims processing and adjudication with carriers, and similar administrative reasons. For example, some private insurance companies do not recognize claims modifiers. Where diagnostic testing services are not billed globally and the modifier is removed, the private insurance

company questions what appears to be double billing for the same service from different practices, generating additional work and expenses for both practices.

Receipt of two separate bills for what patients perceive as one service will lead to additional confusion for patients. In all likelihood, the patient will not be aware that he has seen an independent contractor and will be confused when he receives multiple bills after having the test at one location. This will typically result in two different reactions from patients. One group of patients will make repeated telephone calls to the group practice, requiring the practice to retain additional staff to handle such inquiries, thus increasing overall costs of providing these services to the practice. The second group will simply not pay their bills. The practices will either write off the bills as bad debt, or more likely, will be forced to send the accounts to collection agencies. Either of these responses will cost the practice time and money and may cause credit problems for those senior citizens who have difficulty paying their bills or fail to respond in a timely manner.

It appears that CMS is attempting to limit, through the reassignment provisions, which specialties can perform the professional component of a diagnostic test. This determination is more appropriately made by the medical specialty societies, state medical boards and medical schools and should take into consideration many factors, including professional liability considerations. Alternatively, CMS may be looking once again to constrain the volume of diagnostic testing performed. If so, coverage criteria,

practice guidelines and performance measures would appear a much more appropriate way to do so than through a blunt instrument like the reassignment rules.

Use of locum tenens physicians

Practices are explicitly permitted to use and bill for the services of locum tenens physicians in certain circumstances. Locum tenens physicians are by definition independent contractors. These proposals, if extended to locum tenens physicians, would limit the ability of group practices to bill for services performed by locum tenens physicians in the normal course of business. It is MGMA’s understanding that

locum tenens arrangements would be unaffected by these proposed changes; however, the proposed language and preamble leave this point unclear. In the event that CMS does not withdraw the proposals limiting the use of independent contractors, MGMA requests clarification of this point regarding the use of locum tenens physicians.

Proposed changes to the Stark regulations

Definition of a “centralized building”

Under current law and regulations, the term “centralized building,” as defined at 42 CFR 411.351, includes no limitations on size, nor does it define the location of the building and the equipment that must be contained within it. CMS now proposes to complicate an already mind-numbingly complex set of laws and regulations that impose severe restrictions on the ability of group practices to manage themselves by altering this definition to require groups to purchase or rent more space and equipment than they actually need for longer periods of time than necessary to deliver services under the in-office ancillary services exception to the Stark law. Groups are already struggling to comply with this proposed provision before it has even been finalized and are finding that they will be faced with increased costs because of the requirement that the space be used on a full-time basis, as opposed to the current exclusive use requirement.

While the current definition of a centralized building requires that space be occupied exclusively by the group on a 24-hour, seven-days-a-week basis, there is no requirement the space be used on a full-time basis. Forcing groups to use the space on a full-time basis will lead to increased costs for the group practice, including but not limited to new electricity, billing and support staff expenses. Forcing the group to use a full-time independent contractor negates one of the primary purposes of using an independent

contractor: to perform services that are not required on a full-time basis. This requirement is unlikely to reduce the number of pod labs in existence; instead, it is almost certain to make it more difficult, if not impossible, for small group practices to offer necessary services to their patients in a cost-effective manner. MGMA opposes any such limitations on the flexibility of groups to offer services in a cost-effective manner that is also convenient for patients and conducive to patient care.

The proposed “90 percent test” on equipment used in centralized buildings is particularly arbitrary. The use of the word “permanently,” defined by the American College Dictionary as “remaining unchanged,” would seem to restrict practices – whether or not they share the same physician in a practice with more than two other practices – from storing equipment in an office or storage closet within the confines of their space and moving it into an examination room as necessary. In order to do so, such equipment would have to be on wheels, which would generally allow the equipment to be removed from the space. Even if it is the group’s intention not to remove the equipment from the space, it would appear that this would be impermissible under the proposed changes because it would not be in a location that will not change. Many patients, especially those in rural areas, depend on mobile equipment to obtain diagnostic imaging services. Group practices providing such services generally depend on their ability to have multiple

centralized buildings. They generally accomplish this by purchasing or leasing mobile equipment and sharing it amongst their offices. Under this proposal, groups will be forced to either purchase or lease additional equipment for longer periods of time than they can afford, rather than share one set of equipment amongst their various office locations. Instead, they will no longer be able to offer these services to their patients. These patients will either be forced to visit the nearest hospital or travel long distances to obtain such services. MGMA has received reports from members that their practices anticipate possible reductions in mobile diagnostic imaging services. According to a practice administrator of a 10-physician cardiology practice in Arkansas that is considering no longer holding outreach clinics that provide diagnostic imaging services, patients will be forced to travel as much as three hours to obtain care. The “90 percent test” will also discriminate between and among different groups. Those with large

ancillary programs with plenty of fixed equipment in place will still be able to use some mobile equipment because it will generate less than 10 percent of their Medicare DHS total. Smaller groups with fewer ancillaries, but the need for some mobile equipment on a part-time basis will be precluded from using it because they will be in excess of 10 percent. Groups whose DHS utilization patterns vary from month to month and year to year will live under a cloud of uncertainty with respect to when or whether

they will cross the 10 percent barrier.

MGMA strongly opposes any change to the definition of a centralized building that further reduces a practice’s discretion to manage their facilities in a cost-effective manner. MGMA also opposes CMS’ proposal to further regulate office locations when state lines are involved. There are many practices that may have offices in multiple states or may see patients from multiple states, especially those located in border areas. The Washington, D.C. metro area is a prime example of such a location where patients may live in one jurisdiction but visit a provider in another. Depending on the facility hours and those of the provider, it may be more convenient for the patient to see the provider in one jurisdiction and to obtain the diagnostic test in another. CMS’ proposal would prevent these practices from having an office meeting the definition of a centralized building in a different state than an office meeting the definition of a same building. Group practices will be forced to either have all of their offices comply with the definition of a same building or a centralized building. They will be precluded from utilizing the tools available to them under the Stark law that allow them to design contracts and facilities

in a cost-effective manner that is also convenient for patients.

MGMA urges CMS to refrain from making any changes to an already overly burdensome regulatory scheme at this time. This proposal is yet another attempt by CMS to micro-manage the internal workings of group practices through the ever-changing intricacies of the Stark law. In the alternative, MGMA recommends that CMS limit these changes to entities that have been identified by the Office of the Inspector General – the agency charged with rooting out fraud and abuse in the Medicare program – as having the highest potential for fraud and abuse. The proposed changes are overly broad and burdensome on group practices already struggling to comply with the regulatory scheme currently in place. At a time when Medicare payment rates are set to decrease by more than 5 percent in the upcoming year and 40 percent over the next five years, regulations that reduce flexibility and increase practice costs and burdens will only cause practices to cease offering medically necessary services to Medicare patients.

Definition of a “physician in a group practice”

CMS has proposed altering the definition of a “physician in a group practice,” as defined by 42 CFR 411.351, to require that independent contractors comply with the proposed reassignment rules for TC services, as well as PC services. While MGMA does not intend to diminish the importance of compliance with the Medicare program billing rules, the consequences of a violation of the Stark law are far more serious and far-reaching.

The proposal is an attempt by CMS to bootstrap the reassignment rules into the Stark regulations, a set of regulations that is already overly complex and difficult for an attorney to navigate, let alone a lay person. The reassignment rules are generally contained within the Medicare Manuals, a set of guidelines published by CMS without notice to providers and with little, if any, opportunity for public comment. Given the ease with which these guidelines are amended, group practices may find themselves with

violations of these guidelines because of a lack of notice. A group practice committing what is now a technical error, would face the potential for enormous penalties if the reassignment references are incorporated into the Stark regulations. MGMA vigorously opposes this proposal and urges CMS not to incorporate the reassignment provisions of the Medicare Manuals into the Stark regulations. The definition of a physician in a group practice does require that an independent contractor furnish his services in the group’s facilities in order to be part of the group practice for the purposes of Stark, but does not define “facilities” for this purpose as the “same building” or a “centralized building.” The “centralized” and “same” building tests have no applicability beyond the in-office ancillary services exception. They were developed in conjunction with that exception to restrict the locations in which ancillary services can be provided and still receive Stark law protection. They were never designed to restrict where physicians – whether owners, employees or independent contractors – can provide professional services for a group practice. Altering the regulations in the manner proposed by CMS would prohibit physician owners and employees from providing interpretive services while in a location, such as a hospital, nursing home or surgery center, and prohibit contract physicians from providing a professional service in the group’s professional space simply because it does not meet the requirements for ancillary space. These changes would make little practical sense; rather, they simply reduce group flexibility in the design of clinical space and force physicians to serve Medicare patients where it is convenient for consistency in the Stark law, not necessarily convenient for the physician or the patient.

MGMA opposes the addition of an on-site requirement for physician owners and employees, as well as the re-introduction of the requirement for independent contractors. Under the MMA, Congress clearly indicated that independent contractors should not be required to perform their services on-site when it is unnecessary for them to do so.

Employee Access to Claims Billed on Reassignment

While MGMA shares CMS’ interest in program integrity, MGMA opposes the proposed new requirements on employee access to billing records. Congress authorized CMS to develop additional protections related to reassignment by contractors. It evidenced no intent to change the reassignment rules, which have applied to owners and employees of physician practices for decades. Nor is there any evidence of which MGMA is aware to suggest that this is a current program integrity issue. While employed providers generally have some access to records in the practice, they do not necessarily have unfettered access to all billing records. This is a matter generally left to the terms of a provider’s

employment contract with the practice, record retention and storage policies and common sense as billing or audit issues arise. Overlaying new regulatory requirements on this aspect of the employer-employee relationship is fraught with potential issues not addressed by this proposal. For example:

1. Does the requirement extend to employees? For how long?

2. Can it be used to harass a former employer in a manner unrelated to any legitimate concern about prior Medicare billings?

3. What about standard contract provisions that prevent a former employee from taking group records as part of a non-compete or non-solicitation provision in the employment contract?

4. What does “unrestricted” mean? Who decides?

5. Does it mean access to original records or only copies? Who pays for copying costs, retrieval from storage, separation of one provider’s records from those of the others, of Medicare records from those related to other payers?

6. How much time does the group have to produce the records?

7. What if the records are no longer available?

8. How does the group prevent unauthorized disclosure of HIPAA-protected patient information now in the hands of a former employee?

Not only does the proposed rule not answer these questions, but many are simply not answerable in a “one size fits all” manner. Were CMS to try to answer them all, this perhaps well-intended change would become a major new regulatory burden at a time when both government and physician practices are seeking ways to simplify the administration of healthcare.

One of the benefits of group practice is the use of centralized administrative staff to perform billing and records functions, leaving providers the time and opportunity to focus on clinical care. While both the group and the employed providers generally share liability to Medicare if billing problems exist, it is generally the group’s obligation to have systems in place to prevent them to the extent possible and to resolve them if and when they arise. Most groups have billing compliance programs. It is those programs

that set the framework for involvement of individual providers in order to ensure integrity. MGMA believes that is the better approach to protecting program integrity, not the addition of yet another regulatory requirement.

Independent Diagnostic Testing Facility (IDTF) Issues

CMS’ proposal to adopt performance standards for independent diagnostic testing facilities (IDTFs) raises several concerns. MGMA believes that requiring federal certification at the time of enrollment or upon periodic inspections by CMS’ agents will not control the growth in utilization of these services and will not ensure that medical imaging studies are being performed in a clinically appropriate manner. It also will not ensure routine high-quality and will not control the costs of an IDTF. Rather, compliance with and implementation of these standards will further increase costs to individual medical practices and will yield little information for policy makers or health care consumers. IDTF certification imposes a new layer of federal regulation on physicians providing diagnostic imaging services. CMS has not given any explanation of how the new standards will result in substantial savings, especially given the fact that IDTFs are already subject to federal accreditation standards. Before imposing additional administrative hurdles for IDTFs, CMS should evaluate the effectiveness of current

requirements in order to ensure that additional regulations will not merely impose more costly burdens without achieving CMS’ stated goals.

In addition, professional specialty societies are working to ensure the quality and safety of medical imaging performed by developing residency training standards and CMS programs for ultrasound, MR, CT, and PET. They are also developing appropriateness criteria and practice guidelines for reasonable incorporation of these technologies into patient care. Performance measures and other quality improvement tools are also being considered. CMS should recognize and not duplicate or override specialty society efforts to ensure quality and safety by imposing non-specialty specific requirements. IDTFs are already subject to independent, specialty-specific requirements, as well as state laws and

regulations currently in place that stipulate equipment quality controls and technologist training requirements. Specialty society efforts should be encouraged and quality-related initiatives for diagnostic imaging should be considered by CMS only in the context of broader pay-for-performance concepts.

In addition to MGMA’s general concerns about the overall certification scheme, MGMA specifically questions CMS’ proposed standard requiring IDTFs to have a comprehensive liability insurance policy of at least $300,000 or 20 percent of the IDTF’s average annual Medicare billings, whichever amount is greater. This requirement is overly burdensome. In its proposed rule, CMS does not provide justification for how it established these numbers, nor does it explain why linking comprehensive liability insurance to

a percentage of Medicare billings will improve the quality of care to Medicare beneficiaries. MGMA knows of no other healthcare entity that has insurance requirements linked to Medicare billings.

MGMA is also concerned about the proposed prohibition on solicitation of patients. This proposed standard, as written, would prohibit IDTFs from advertising and would require a patient to receive a referral from an attending physician in order to be seen at an IDTF. By limiting the ability of IDTFs to solicit patients, CMS is also limiting the ability of Medicare beneficiaries to be informed about and to select their healthcare providers. Instead, a beneficiary must rely on the referral arrangements developed by his or her attending physician. MGMA supports a beneficiary’s ability to be fully informed about

health care providers and to be allowed to direct his or her care. While the IDTF regulations on their face do not appear to mandate the involvement of any particular

specialty, they do include physician supervision requirements that, under CMS instructions to Medicare carriers, designate radiologists as the sole specialists qualified to serve as supervising physicians for a number of important diagnostic imaging procedures. MGMA believes that CMS should modify its instructions to Medicare carriers to ensure that specialty certification is not used to determine which physicians are qualified to supervise diagnostic imaging studies.

Health Care Information Transparency Initiative

Introduction

This section of the proposed CY 2007 fee schedule describes the amount of money spent annually within the U.S. on medical and healthcare related services, $1.9 trillion or 16 percent of the national economy. The proposed fee schedule cites projections that by 2015, health care will consume 20 percent of the national economy. In addition, according to the 2006 OASDI Board of Trustees Report, the Medicare program consumes 3.2 percent of the gross domestic product (GDP) and by 2040 estimates predict that it

will consume 8.0 percent of the GDP. Citing these figures, the fee schedule concludes that the lack of information patients typically have regarding the cost of their medical services is responsible for the steady increase in both the utilization and cost in this sector of the economy. The statistics cited in the proposed 2007 physician fee schedule

purport to make the case that the price paid for medical services are too high, due to the lack of pricing pressure seen in a free market. MGMA would like to note the implausibility of this argument. Reimbursement to physician group medical practices for health care services is highly regulated and completely price controlled through complex statutory formulas. Medicare fee schedule rates for physician services then become the base fee schedule for group practices negotiating with third party payers nationwide. In fact, physicians providing services to Medicare beneficiaries today are effectively

reimbursed at levels equivalent to those paid in 2001. As a result, it is hard to understand the statement in the proposed fee schedule, “[t]thus, providers of care are not subject to the competitive pressures that exist in other markets for offering quality services at the best possible price.” The Health Care Information Transparency Initiative comments point to the rising cost of healthcare services. The fee schedule commentary argues that this trend, combined with the supposed lack of pricing constraint seen in an economic free market, points to the need for greater transparency of pricing. However, others have argued that rising costs in the healthcare sector are largely a result of decreased

productivity in this sector of the economy. This lack of productivity is related to the highly labor intensive nature of healthcare services, much of which could be offset by appropriate investments in healthcare information technology. These arguments are described in detail in the September 25, 2006 issue of BusinessWeek cover story titled, “What’s really propping up the economy.”

According to the article, the healthcare sector of the economy has added 1.7 million jobs since 2001, while the rest of the economy has not added any. One reason that so many jobs have been created is that healthcare services in the U.S. remain labor intensive, which could be stemmed by appropriate investment in healthcare information technology. The article cites one HarvardUniversity economist, Dale Jorgenson, as saying, “Low productivity in health is mostly a product of low investment [in health information technology].” Another healthcare economist, Gerard Anderson of JohnHopkinsUniversity, agrees, “Every other country has the payers paying for IT, in the U.S. we’re asking the providers to pay for IT.” The article continues on to underscore the widely acknowledged point that clinical providers are not the primary beneficiaries of health information technology.

Another relevant point made by the article is that higher real incomes and improved GDP are matched by growth in healthcare expenditures, since improvements in relative health status are costly. Princeton economist Uwe Reinhart is quoted in the article as saying, “if you did geriatric health properly, you’d need a lot more geriatricians.” Instead, the administration’s transparency initiative purposefully limits the conversation to the supposed lack of an economic market for healthcare services.

It is relatively easy for medical groups to know and therefore, to make publicly available, their Medicare rates, since these rates are totally controlled by federal regulation and policy. However, there are a variety of factors that limit the amount of private payer information available to group medical practices. MGMA has created a broad policy regarding the transparency of both pricing and quality information. The first section outlines barriers that practices experience in obtaining clear, accurate and timely

information about what they will be paid by third party payers. This section, titled “Transparency: Pricing and Benefit Policies” goes on to outline recommendations for promoting greater price and benefit policy transparency. The second and inter-related section of the MGMA policy is titled, “Transparency: Physician Quality Performance Data.” MGMA policy is firmly committed to the inclusion of relevant quality data wherever pricing or cost data is made public. Consumers need access to both types of data to make appropriately informed decisions. This portion of the MGMA’s policy outlines the appropriate sources of clinical performance measures and makes recommendations for the fair use of efficiency measurement. MGMA’s entire transparency policy follows.

Transparency: Pricing and Benefit Policies

MGMA supports the intent of the president’s call for price transparency. However, simply requiring physicians and other providers to disclose their walk-in charges for common procedures is not the solution. Patients are increasingly responsible for co-insurance payments based on a percentage of the charges allowed under their insurance plans, so it is essential that they know the amount that their insurance will pay for services received. Because most physicians participate in 20 or more insurance

plans, and because many insurers have different reimbursement rates for different products, it is not unusual for a service to have as many as 100 prices in a particular physician’s practice. Accordingly, the physician is unlikely to have the price that will be paid by a particular insurer, for a particular patient’s plan, for a particular procedure readily at hand. Furthermore, contractual restrictions in health plan contracts often prohibit medical practices from releasing pricing information. These restrictions often fall under confidentiality provisions that classify health plans’ pricing structures as proprietary information. As a result, medical practices cannot disclose

this information, even to patients. Price transparency will be impossible unless these provisions are removed from health plan contracts with physicians and hospitals.

Recommendations for Achieving Price Transparency:

Require health plans to release fee schedules showing total allowed charges and methods used to calculate fees to physicians and hospitals as part of their provider contracting process. An MGMA statewide survey of Colorado practices found that 31 percent of primary care groups could not obtain fee schedule information from insurers at the time of contracting. Physicians and hospitals are unable to provide accurate price information to patients if insurers are not required to provide fee schedule information to them.

Require that health plan contracts with physicians and hospitals clearly specify that disclosure of insurer fee-schedule information to patients, for services that are to be provided to the patient by the physician or hospital and charged to that insurer, is permissible. MGMA supports research to investigate what fee information is most valuable to patients and consumers, especially those in preferred provider organizations (PPOs); health savings accounts (HSAs) and high-deductible health plans; and for self-pay patients. Studies should also investigate whether health plan use of efficiency ratings of medical practices or individual physicians is useful to consumers in estimating their out-of-pocket costs for certain conditions. If not, additional research should be undertaken to investigate what is most beneficial for consumers.

The President’s goal of empowering consumers and patients with pricing information to permit comparative shopping for healthcare services is hampered by the complexity of the health insurance market. It adds significant costs that are borne by medical practices and the healthcare system at large and are not apparent to consumers. Much of the estimated $300 billion spent annually on administrative activities results from needless complexity or duplication.

Recommendations for Increasing Administrative Benefit Transparency and Reducing Administrative Complexity:

• Simplify insurance product design by limiting the number of policy forms (including self-insured plans) and adopting a common electronic inquiry system for verifying insurance coverage;

• Simplify payer and provider contracting by creating standard contracts at the state level, including standard effective date and contract terms;

• Simplify billing and payment processes by developing a standard content layout for patient bills, creating standard policies for documentation required for any specific CPT* codes and agreeing on common coding policies across health plans;

• Simplify credentials verification by using the Council for Affordable Quality Healthcare

Universal Credentialing Datasource; and

• Simplify healthcare fees by revealing fee structures to medical practices and hospitals at the time of contracting.

Transparency: Physician Quality Performance Data

The following sections outline the measure sets that currently exist to assess physician quality and efficiency.

Clinical Performance Measures

Measures designed to assess the clinical performance of individual physicians and physician groups are developed and validated through existing organizations. The American Medical Association-convened

Physician Consortium for Performance Improvement has developed (to date) more than 98 evidence-based performance measures and expects to have developed over 170 measures by the end of 2006. The consortium brings together technical experts from multiple medical specialty societies to develop evidence-based clinical performance measures and ensure that their implementation can be consistent and accurate.

The consortium’s work is guided by the following principles:

• Measures must be based on medical evidence and represent substantial potential for improvement between current clinical practice and evidence-based optimal practice.

• Measures must be relevant to physicians and their patients, and accurate and consistently reproducible across healthcare organizations and clinical settings.

• Measures must be tested for validity. Each measure should include specifications that describe its intent and targeted population, definitions of sampling procedures, definitions of data elements and instructions for collecting data.

• The results of the measures should be risk-adjusted and easily interpreted by clinicians.

• Measures must be feasible to collect, adaptable to various settings and not impose unreasonable cost burdens on practices.

Performance measures from the consortium and other sources are considered for validation by the National Quality Forum (NQF), a private, nonprofit organization that Congress has charged with endorsing consensus-based national standards for measurement and public reporting of healthcare performance data. NQF-endorsed measures must provide meaningful information about whether care is safe, timely, beneficial, patient-centered, equitable and efficient.

Patient Satisfaction Measurement

The Agency for Health Care Research and Quality has developed a series of patient satisfaction survey instruments, collectively called Consumer Assessment of Healthcare Providers and Systems. These surveys, designed to assess satisfaction with health plans, hospitals and medical groups, allow patients and consumers to evaluate their experiences with healthcare.

Efficiency Measures

The AQA (formerly the Ambulatory Care Quality Alliance) is working to develop a standard, statistically valid method to measure how a physician’s use of health care resources to treat a patient within an episode of care compares with expected average costs.

Recommendations for Achieving Transparency of Quality and Efficiency Data:

MGMA supports quality improvement activities that focus on improving patient care, outcomes, satisfaction and the cost-effective use of resources. MGMA also believes it is inappropriate to post efficiency ratings (i.e. cost and utilization data) without commensurate quality data.

Quality improvement programs that are initiated outside the medical practice (such as those conducted by health plans, accrediting bodies or public agencies) should comply with the following the guidelines:

• Before physician profiles of performance on different domains of care are made public, medical practices and their administrators must be able to review all relevant data and make appropriate corrections.

• Measures used in such programs must be consistent across all organizations involved. To ensure consistency, only measures that have been created through the Physician Consortium for Performance Improvement and approved by the NQF should be deployed. Nothing will hamper quality improvement efforts more quickly than having multiple programs collecting and reporting different measures. The resultant chaos would force medical to practices to focus on meeting competing administrative requirements rather than improving medical care.

• Medical practices must not be solely responsible for funding the costs associated with patient satisfaction surveys. Instead, all parties interested in using the resulting data should help defray the cost of statistically valid survey methods, which would otherwise be cost-prohibitive for most medical practices.

• Efficiency measurement must be restricted to areas where there is both information on the cost of care delivered (including pharmaceuticals, especially if prescription drugs represent the standard of care for the diagnosis) and information on performance of clinical care measures. Efficiency measurement should be limited to specific episodes of care and be risk-adjusted for each patient. Payers using efficiency measurement should make their methodology and data sources easily accessible to physicians being measured, and to their administrators.

MGMA appreciates your consideration of these comments and looks forward to collaborating to educate medical group practices on the numerous Medicare program changes.”

Source: MGMA


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