October 1998 Bulletin

Academy tells HCFA proposed fee schedule revisions need fine tuning

The Academy supports the proposed "top-down" methodology described in the Health Care Financing Administration's (HCFA) proposed revisions to Medicare payment policies for the physician fee schedule for 1999, but continues to have concerns on a number of provisions.

In a comment letter on the proposed rule published in the Federal Register in June, James D. Heckman, MD, Academy president, the "top-down" approach was preferred because it uses the American Medical Association's Socioeconomic Monitoring Survey (SMS) data in the development of specialty practice expense pools. The alternative "bottom-up" approach fails to recognize the significant indirect cost differences between specialties that are included in SMS data. Also, the bottom-up method continues to include many of the adjustments to the clinical practice expert panel (CPEP) data that the Academy has consistently objected to, such as cross-CPEP linking.

While the Academy strongly supports the use of the SMS, it also recognizes that the data collected in the SMS is incomplete. The Academy is urging HCFA to consider and accept supplemental data provided in response to the proposed rule and throughout the entire transition period on specialty practice expenses. Whatever process is ultimately chosen for the refinement of PE RVUs, the Academy strongly urges HCFA to consider the new relative values as "interim" throughout the entire transition period.

The SMS fails to include any practice expense information for certain specialties and nonphysician providers recognized by Medicare. One of those specialties is podiatric medicine. HCFA has chosen to fill in the gaps by using general surgery's practice expense per hour information as a proxy or "crosswalk" for podiatry. The Academy recommends that orthopaedic surgery be used as the crosswalk specialty for podiatry, until actual data on podiatric practice expenses can be collected. Other areas of concern addressed in the comment letter are: Nonsurgeons reported performing surgical procedures, CPEP issues, code-specific comments, indirect expense issues, baseline practice expense RVUs for the transition formula, refinement, volume and intensity offset.

The comment letter is in the "Health Policy section" of the Academy's home page www.aaos.org.

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