Originally posted to the American Speech-Language-Hearing Association Headlines e-mail list on 3/7/05)
CMS is seeking legal advice that would allow it to adjust the Medicare physician payment formula to head off six years of consecutive rate reductions, according to CMS Administrator Mark McClellan, the clearest sign to date that the agency wants to take up a proposal offered by ASHA, AMA, and other provider groups to head off the looming cuts.
Dr. McClellan spoke at a recent Federation of American Hospitals meeting and said that the agency was "actively pursuing" whether it had the statutory authority to remove the cost of physician administered drugs from the formula on a "retrospective" basis. That move would eliminate the cuts, which start next year, by removing one of the fastest growing costs from the formula's spending target.
CMS has already concluded that it can tweak the formula on a "going forward" basis, McClellan said, but that is insufficient to avert the cuts in the short term. This position represents a policy shift for the agency, which in the past said it did not have legal grounds to take drugs out of the sustainable growth rate formula. In addition, ASHA and other provider groups have argued that any prospective fix also implies the authority to make a retroactive calculation because of the need to reset targets under the formula.
McClellan acknowledged that the Bush Administration was looking at both administrative and legislative remedies to mitigate the pending cuts that could amount to at least a 4 percent cut per year over the next five years. The cost of repealing the cuts through law is projected to be $140 billion over ten years. It remains unclear whether the Office of Management and Budget (OMB) has softened its opposition to any administrative fix proposals. For further information, please contact Ingrida Lusis, ASHA's Director of Health Care Regulatory Advocacy, at ilusis@asha.org or by phone at 800-498-2071, ext. 4482.
Reprinted by permission of the American Speech-Language-Hearing Association
