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TRHCA: A good thing, but Medicare reimbursement cuts may still occur The Tax Relief and Health Care Act of 2006 (TRHCA), passed in the last moments of a lame duck Congressional session in December, eliminated across-the-board cuts in Medicare reimbursement for 2007. Medicare had planned a 5% cut in its 2007 physician payment rates. But TRHCA left the base payment rates unchanged from 2006 levels, though cuts remain a possibility for 2008. Although some physicians will realize fairly significant increases, others may still see decreases. CMS review of RVUs At the same time Congress was passing TRHCA, the Centers for Medicare and Medicaid Services (CMS) was a five-year review of the relative value units (RVUs) assigned to some procedure codes. CMS uses RVUs to establish reimbursement amounts. If the RVUs for the services you provide increased, your Medicare reimbursement will be higher. RVUs increased, for example, for most mid- to higher-level patient office visits, consultations and inpatient visits. Physicians who provide such evaluation and management (E&M) services, therefore, are being paid more. A midlevel established patient office visit is now being reimbursed at an average of $59.40, up from $52.68. At the same time, though, CMS was required to hold total spending for physician services to 2006 levels. Therefore, increases in RVUs in some areas had to be offset by decreases in other areas. CMS decided to lower payments for procedure codes that weren't part of the 2006 five-year review. Thus, payments for a level 2 new patient office visit have decreased by 4.6%, even though TRHCA left them unchanged. Radiologists are seeing a decrease of about 9% because of RVU changes. Another bright spot is that TRHCA left the "floor" intact for geographic adjustments. Each of 89 Medicare-defined geographic areas is assigned an RVU for work, practice expense and professional liability insurance, based on regional differences in costs. In 2003, Congress established a minimum national average work RVU geographic adjustment factor for 2004 through 2006. Because of TRHCA, that minimum remains in effect through 2007. Get paid to volunteer Under TRHCA, all physicians are eligible for 1.5% bonus payments if they report on at least three Physician Voluntary Reporting Program (PVRP) quality measures between July 1 and December 31, 2007. The new program will use 66 clinical measures that CMS announced in December -most of which were developed by the Physician Consortium for Performance Improvement. Doctors who report on at least three of the measures for 80% of their patients from July through December will receive a bonus of up to 1.5% of their Medicare payments during that time. Even though that sounds appealing, it remains unclear whether the bonus will offset the required administrative reporting costs. Other provisions of TRHCA that may interest you include:
Provisions such as these make TRHCA a boon to doctors and hospitals, but there's no guarantee the changes will be permanent. The newly elected Congress may not do what's necessary to forestall reduced reimbursement rates in 2008. A pill that's easy to take The good news is that, even if the overall reimbursement rates eventually go down, the decrease will be based on the currently higher rates many physicians are enjoying in 2007. Either way, TRHCA is helping make bitter pills a bit easier to swallow.
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