ACP commends CMS plan to increase values assigned to evaluation and management codes

November 03, 2006

(Washington) -- The American College of Physicians (ACP) today commended the increase in payments for Evaluation and Management (E/M) services included in the Centers for Medicare and Medicaid Services' (CMS) final rule for the 2007 Physician Fee Schedule, published on Nov. 1. However, the College also expressed concern that a 5 percent overall cut to physician payments, also included in the rule, would eliminate the beneficial impact for patients that would result from paying more for personalized, primary care services. The College urged Congress to act immediately, following its return from the election recess, to enact legislation to replace the 5 percent cut with a positive update.

The 5 percent payment cut results from the flawed sustainable growth rate (SGR) formula. The SGR formula was created in 1997 and ties physician payments to growth in the overall economy. When growth in physician expenditures exceeds growth in the economy the difference is subtracted from physician payments. The result: across-the-board cuts in payments to physicians. This is the seventh consecutive year that physicians have faced SGR-related payment cuts.

The final rule will implement changes in physician work relative value units (RVUs) that were first proposed in June. Work RVUs are among the factors that Medicare uses to determine payment rates for different services. By increasing the RVUs for office visits and other face-to-face services, CMS would begin to pay physicians more for the time they spend talking with their patients about their health care, leading to better outcomes for patients. CMS based the increased work RVUs on evidence submitted by the College and other physician organizations that show that the physician work associated with E/M services has increased substantially in the past 10 years.

"We're pleased that CMS has decided to adopt the proposed increases for E/M work RVUs," said Dr. Lynne M. Kirk, MD, FACP, president of ACP. "We agree with Leslie Norwalk, CMS's Acting Administrator, that by paying physicians more for the time they spend talking with patients about their health care and by emphasizing personalized care, patients will benefit from better outcomes and more efficient use of resources."

The 5 percent SGR cut will effectively cancel out the initial benefit of the E/M work RVU increases. For primary care physicians, the SGR cut will completely offset the higher payment rates that would have resulted from the increases in the E/M work RVUs.

"The initial potential benefit to Medicare patients that would result from the improved RVUs for E/M services, emphasizing the value of personalized, primary care, will be cancelled out by the 5 percent SGR cut," said Dr. Kirk. "This lost potential makes it even more imperative that Congress not allow the SGR cut to go into effect."

"Even with the increases in the work RVUs for evaluation and management services, the SGR cuts will result in overall Medicare payments falling further behind the costs of care, leading to a continued decline in Medicare patients' access to primary care services," continued Dr. Kirk. "I urge Congress to act to fix the SGR payment cuts immediately following the elections."
Contact: Jacquelyn Blaser, (202) 261-4572

The American College of Physicians is the largest medical specialty organization and the second-largest physician group in the United States. ACP members include more than 120,000 internal medicine physicians (internists), related subspecialists, and medical students. Internists specialize in the prevention, detection and treatment of illness in adults.

American College of Physicians

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