July 2005 | Vol. 23, No 7

Important Bills in Congress for a Permanent Fix to Physician Fee Schedule Issue

By Bill Schroedter, BA RVT FSVU
Chair, SVU Government Relations Committee

SVU has been closely monitoring the controversy regarding payment for noninvasive vascular testing under Medicare’s Physician Fee Schedule and encourages SVU members to make their voices heard in this important dialogue. Specifically, nearly all relevant stakeholders, including the physician community, MedPAC (the independent federal body that advises Congress on Medicare issues), and Congress itself have expressed concern over the instability surrounding the conversion factor that is used to determine if physician payments will impede beneficiaries' access to quality health care services. 

The Sustainable Growth Rate (SGR) system projects the growth in spending for physician services based on changes in the number of beneficiaries in the Medicare fee-for-service program; inputs prices for physician services; laws/regulations; and the gross domestic product (GDP), the measure of goods and services produced in the U.S. This system has been widely criticized for failing to associate payment of physicians with the actual costs of providing health care services and for neglecting variations in volume and quality control among individual physicians. If these deficiencies in the SGR system are not addressed by Congress, the Centers for Medicare and Medicaid Services (CMS) projections indicate that noninvasive vascular procedures, as well as all other physician services, will receive “negative updates” or reductions in payment of approximately 5.0 percent on an annual basis from 2006 until 2012. This projected 30 percent pay cut will occur despite the projected increases in the costs of providing these health care services.

Realizing the serious problem in the SGR system, Congress was forced to undertake legislative measures in 1998 and 1999 to enable CMS to correct projection errors that were made in the physician fee schedule updates. More recently, Congress addressed this concern in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) by implementing a positive 1.5 percent update as a floor in the conversion factor for 2004 and 2005 in order to prevent the 4.5 percent reduction in our payments that CMS had anticipated during those years. This "temporary fix" in the conversion factor was intended to provide Congress with time to reevaluate the sustainable growth rate (SGR) formula that is used to determine physician payments. 

While necessary, these temporary "solutions" are simply not sufficient and the underlying problem remains. SVU agrees that the SGR system will perpetuate inaccurate cost projections and inadequate payments to physicians and the services our members provide unless these significant shortcomings are addressed by Congress in a more meaningful, long-term strategy. SVU members can facilitate this effort by asking their Members of Congress to support either H.R. 2356 or S. 1081 -- “Preserving Patient Access to Physicians Act of 2005”. These critical bills establish an update to the single conversion factor for 2006 of at least 2.7 percent, and a formula for an update to the single conversion factor for 2007.

Contact ASAP your Members of Congress (your U.S. Representative and your two U.S. Senators) by sending them the linked sample letter (MS Word) to urge them to co-sponsor these two important bills – H.R. 2356 or S. 1081 – and urge immediate action on them in both the House and the Senate.  To determine your Members of Congress, please go to the following two websites: www.house.gov or www.senate.gov.

If you send a letter to your Members of Congress, SVU would appreciate receiving a copy of your correspondence. Please send it to SVU Executive Director Steve Haracznak by email at steveh@svunet.org, by fax at 301-459-5651, or by land mail to the SVU national office in Lanham, MD. Thanks for your support in contacting your Members of Congress regarding these important bills that will provide a permanent fix to the physician fee schedule issue.

If you have any questions, feel free to contact me directly at bschroedter@qualityvascular.com. Thanks for your support.