AMCNO Provides Comments to the Center for Medicare and Medicaid Services (CMS)

On behalf of our membership, the AMCNO submitted comments to the Centers for Medicare and Medicaid Services (CMS) in response to the Proposed 2009 changes to payment policies and rates under the Medicare Physician Fee Schedule (proposed rule CMS-1403-P). Our comments focused on the issue of the flawed sustainable growth rate (SGR) formula currently utilized by CMS to calculate physician payments under Medicare as well as items contained in the proposed rule relative to the geographic practice cost indices (GPCI) utilized by Medicare in Ohio.

What is the GPCI? The Medicare physician fee schedule adjusts physician fees for area differences in physicians’ costs of operating a private medical practice. Three separate indices, known as geographic practice cost indices (GPCI) raise or lower Medicare fees in an area, depending on whether the area’s physician practice costs are above or below the national average. These GPCIs adjust physician fees for variations in physicians’ costs of providing care in different geographic areas. The three GPCIs correspond to the three components of a Medicare fee: physician work, practice expense, and malpractice expense.

At this time, CMS uses 89 physician payment localities among which fees are adjusted. CMS recognizes that changing demographics and local economic conditions may lead to increased variations in practice costs in certain payment locality boundaries. Currently, the state of Ohio is designated as a statewide locality. The AMCNO has objected to this designation since it does not accurately account for the variations in practice costs in our area.

CMS has contracted with Acumen, LLC to conduct a preliminary study of several options for revising the GPCI payment localities. The study has just been released and the AMCNO physician leadership is now reviewing this report and the AMCNO plans to provide our comments on the proposed options. Additional information as well as a copy of the AMCNO letter to CMS is included in the Sept/Oct issue of the Northern Ohio Physician magazine. Any questions regarding this issue may be forward to E. Biddlestone at the AMCNO at 216-520-1000, ext. 100.