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Published 9/1/2008
the AAOS Office of Government Relations

What does HR 6331 mean for orthopaedics?

Key provisions of the Medicare Improvements for Patients and Providers Act of 2008

HR 6331, the “Medicare Improvements for Patients and Providers Act of 2008,” was passed by Congress over President Bush’s veto on July 15, 2008. The legislation averted a 10.6 percent physician payment cut scheduled for July 1, 2008, but also results in a cut of more than 20 percent to Medicare physician payments on January 1, 2010.

HR 6331 encompasses a variety of healthcare areas—from prevention, marketing, and quality improvement to low-income programs, pharmacy access, and Medicaid. The August issue of AAOS Now (available online at www.aaosnow.org) included a look at the pros and cons of the legislation; following is a summary of key provisions of importance to the orthopaedic community.

Medicare Part B provisions
Sec. 131—Physician payment, efficiency, quality incentives
—eliminated the 10.6 percent cut scheduled under the sustainable growth rate (SGR) formula through Dec. 31, 2009, and provides a 1.1 percent update for 2009.

This provision also extends the physician quality reporting initiative (PQRI) through Dec. 31, 2010, and increases the PQRI bonus to 2 percent for 2009 and 2010. It also improves the PQRI by requiring the endorsement of measures by a consensus-based, standard-setting entity and permitting group practices to report, using a sampling methodology, on measures targeting high-cost, chronic conditions.

In addition, this provision requires the Secretary of the Department of Health and Human Services (HHS) to provide confidential feedback to providers regarding their resource use and to submit a plan to Congress regarding a transition to a value-based purchasing program for physicians.

Sec. 132—Incentives for electronic prescribing—provides positive incentives for practitioners who use qualified e-prescribing systems from 2009 through 2013. It requires practitioners to use qualified e-prescribing systems in 2012 and beyond, however, with penalties for not meeting the specifications. Payments to providers who fail to e-prescribe will be reduced by 1 percent in 2012, 1.5 percent in 2013, and 2 percent in 2014 and each subsequent year.

Under this provision, eligible professionals are those who have more than 10 percent of their allowed charges for all covered professional services that are eligible for the e-prescribing quality measure. To obtain the incentive and avoid penalties, eligible professionals must report on at least 50 percent of their eligible e-prescribing cases.

This provision also permits the HHS Secretary to establish a hardship exception to providers who are unable to use a qualified e-prescribing system. Infrequent prescribers are not subject to penalties or eligible to receive financial incentives.

Sec. 133—Expansion access to primary care services—provides $100 million for the expansion of the Medicare Medical Home demonstration program.

This provision also requires that the Physician Fee Schedule budget neutrality adjuster apply to the conversion factor rather than the work relative value units (RVUs) beginning in 2009. This will more evenly distribute the impact of the adjuster.

Sec. 134—Extension of floor on Medicare work GPCI—simply extends the 1.0 floor on the work geographic practice cost index (GPCI) through Dec. 31, 2009.

Sec. 135—Imaging provisions—includes major areas of concern that relate to advanced imaging services. Mandatory imaging accreditation procedures for diagnostic imaging services, including magnetic resonance imaging and computerized tomography scans, must be implemented by 2012. These accreditation standards require a medical director or supervising physician (including nonradiologists) to complete Continuing Medical Education (CME) courses relating to imaging services. Although whether the typical orthopaedic surgeon would require additional CME is unclear, the AAOS will carefully monitor the development of these requirements to ensure that the advanced education and training in imaging studies already in place is properly recognized.

This section also allows for the designation of multiple accreditation organizations, which will enable groups such as the Intersocietal Commission for the Accreditation of Magnetic Resonance Laboratories, a multispecialty organization, to qualify. However, these accreditation entities must be selected by 2010, which may mean that only the American College of Radiology (ACR) will be able to qualify for this role.

Section 135 establishes a criteria demonstration project to determine the appropriateness of advanced imaging utilization. The law charges the HHS Secretary with developing demonstration project testing models to collect data regarding physician compliance with imaging appropriateness criteria. Participation in the project is voluntary. Criteria must be developed in consultation with and endorsed by a medical specialty. The AAOS is concerned that the ACR will be in a better position to promote its own appropriateness criteria within this short timeframe and believes that each specialty society should develop its own criteria, although many are not far along in this process.

Sec. 141—Extension of exceptions process for therapy caps—simply extends the exceptions process for therapy caps through Dec. 31, 2009.

Sec. 154—Delay in and reform of Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) competitive acquisition program (CAP)—delays the DMEPOS CAP and changes the quality standards and accreditation process for physicians who also serve as DMEPOS suppliers for their patients.

This section excludes negative pressure wound therapy from the CAP, exempts physicians from having to submit bids under the CAP for off-the-shelf orthotics, mandates the HHS Secretary to ensure that only quality standards specifically created for physicians are applied to physicians, and grants authority to the HHS Secretary to exempt physicians from the accreditation requirement.

The AAOS supports provisions that add more flexibility to the DMEPOS CAP, quality standards, and accreditation processes, recognizing that orthopaedic surgeons who provide DMEPOS to their patients do so in the course of care and not as traditional DMEPOS suppliers.

Sec. 161Phase-out of indirect medical education—is included as a partial cost offset to pay for HR 6331. It phases out indirect medical education (IME) payments to Medicare Advantage plans beginning in 2010. These cuts will not affect IME payments made directly to teaching hospitals that treat Medicare Advantage patients.

Sec. 162—Revisions to requirements for Medicare Advantage private fee-for-service plans—changes requirements for Medicare Advantage private fee-for-service (MA-PFFS) plans in counties where two or more non-PFFS plans (either health maintenance organizations [HMOs] or preferred provider organizations [PPOs]) are available to consumers. In these counties, MA-PFFS plans could no longer “deem” providers into the plan, but would have to form provider networks beginning in 2011.

The AAOS supports this measure given the way that Medicare Advantage plans have been using the “deeming” process. (See “Coping with Medicare Advantage fee-for-service plans”)

Sec. 166—Adjustment to the Medicare Advantage Stabilization Fund—will eventually deplete what had been referred to as the “Medicare Advantage Stabilization Fund” to help to pay for other provisions in the legislation. The fund had been the source for incentive payments to “regional preferred provider organization” MA plans that entered regions previously not served by any MA PPOs.

Other Provisions
Sec. 183—Contract with a consensus-based entity regarding performance measurement
—requires the HHS Secretary to contract with a consensus-based entity, such as the National Quality Forum, to set priorities setting, endorse and maintain measures, and promote the development of electronic health records. This provision also allocates funding for this entity for 2009 through 2012.

Sec. 186—Demonstration to improve care to previously uninsured—establishes a 2-year demonstration program across at least 10 cities to determine the most effective methods of reaching and enrolling those who are eligible for Medicare but are not enrolled. At the end of the program, the Centers for Medicare and Medicaid Services (CMS) must report to Congress on its results, including effective methods of outreach and the impact that Medicare enrollment has on those enrolled.

Sec. 188—Medicare Improvement Fund—establishes a fund that the HHS Secretary may use to make improvements to the Medicare fee-for-service program. In addition, excess savings that may occur are directed into this fund for use in improving Medicare beginning in fiscal year 2014. This section also provides $140 million to CMS beginning in 2009 until the 2014 funds are available.

Although the amounts directed into this fund could serve as a source for future short- or long-term physician payment formula fixes or improvements, there is no directive that the funds be used for that purpose.

Sec. 304—IOM reports
—requires the HHS Secretary to contract with the Institute of Medicine (IOM) of the National Academies to conduct studies on best practices in developing clinical practice guidelines and on methodologic standards for conducting systematic reviews of clinical effectiveness research. The goals of these studies are to create objective, scientifically valid, and reliable methods for developing clinical guidelines and clinical effectiveness studies.

View the complete bill.