Since the Centers for Medicare & Medicaid Services (CMS) issued its 2010 physician fee final rule last week with cuts to cardiology practices averaging 27 percent, the American College of Cardiology (ACC) has expressed adamant opposition, and its CEO, Jack Lewin, MD, said that this will cause the shuttering of practices. However, former CMS Administrator Thomas A. Scully explained how the agency is limited by finite funding and growing pressures to fund other areas of healthcare.

The first area of contention is how CMS arrived at this final rule. The ACC strongly disagrees with the data that CMS used to calculate practice expenses and justify its cuts.

“The American Medical Association’s [AMA] data in the Physician Practice Information Survey [PPIS] was not validated, and clearly not accurate,” Lewin explained. “The AMA correctly conducted the survey, but those respondents were a small sample size and clearly did not complete the survey properly.” He cited data from the surveys that suggest there is a 30 percent reduction in office practice costs, which Lewin said is “blatantly wrong.”

While the ACC is not privy to which practices completed the surveys, Lewin said that “someone from CMS should validate whether the data are reflective of reality.”

Due to the PPIS data, CMS issued an 11 percent cut to all cardiology codes, Lewin noted.

Scully, who helped create the resource-based/relative value scale (RB/RVS) in 1989 that CMS uses to assess physician fees, said that the agency is confined to this methodology, adding that no system would appease all parties. “CMS has a finite pot of money, and those funds need to be disseminated across all specialties,” he said, acknowledging that the current system does have “flaws.”

The ACC also is critical of the methodology that CMS employed to estimate costs associated with technologies, such as echocardiography and stress testing. These services, for example, are being cut by as much as 36 percent for SPECT and 10 percent for transthoracic echo.

“With a flat 36 percent reduction for nuclear testing, the cuts make it unsustainable for practices to afford maintaining these technologies, because they can no longer afford to hire the staff to operate the devices,” Lewin explained.

Scully pointed out, however, that all outpatient services, even if they are overutilized, fall under Medicare Part B. “If the focus is on the total expenses, and that cap gets exceeded, it results in total across-the-board cuts,” he explained.

As a result of the new CMS final rule, the average revenue reduction for a cardiology practice is approximately 27 percent, which Lewin said will promote “total non-viability.”

CMS is under “tremendous pressure” both from Congress and the public to re-allocate funds to primary care physicians and basic preventive services, Scully said. “As a result, all the specialties are going to get trimmed back. The general problem is the increasing volume, so the payment per service is going to continue to decrease, especially under the current system where the government sets prices," he said.

“When spending goes up, the RB/RVS system makes cuts, because the budget is finite. The sandbox is not getting any bigger,” Scully said.

Lewin concurred that CMS is “stuck with the current formulas” and noted that this is another reason that healthcare reform is needed.

However, the ACC and its members, who have been vocal advocates for healthcare reform, are now more trepidatious about the prospect of a government-controlled health plan. “Ironically, most of our members, who were previous supporters, are now so angry about this [CMS decision] that they don’t want to see healthcare reform pass. If this is the way the government makes decisions about healthcare, our members are hesitant about more government involvement,” Lewin said.

This lack of practice sustainability will lead cardiologists, according to Lewin, to become “employees of hospitals, causing the closure of individual and group cardiology practices.” Acknowledging that cardiologists have already begun to move in that direction due to previous cuts, he explained that cardiologists receive better reimbursements, and Medicare pays two to four times more for the same tests in a hospital setting.

He cautioned, however, that hospitals will not be able to accommodate this shift, especially as costs increase two to four times.

According to Lewin, the cuts create a “double-whammy:"

• Problems with access to care: For patients who have been receiving care from local cardiologists or cardiology groups that are not hospital-affiliated in small, rural and some suburban communities, those “services will be gone."
• Increase in Medicare costs: Due to the increased costs to hospitals, Medicare Part B premiums and co-pays will increase approximately 20 percent for the beneficiary.

Over the past decade, cardiology is the only area of medicine, according to Lewin, that demonstrated a 27 percent reduction in mortality and morbidity across the U.S. “This accomplishment is now being punished with an average of 27 percent in cuts to the practice of cardiology,” he stated.

“These cuts will cause us to lose the outpatient practice of cardiology,” Lewin concluded. “To turn cardiologists into hospitalists is a profoundly bad public policy because we are limiting access to care for patients.”

While Scully said that CMS is aware that practices may be forced to close their doors due to the reduction in reimbursements, he stressed that this is occurring across all specialties in the U.S. “Unless there is more money in the system—which is not going to happen because the reverse is occurring—there will continue to be more pressure to prevent various disease states,” noted Scully. He recommended that specialists seek to gain better incentives from Medicare.

Scully concluded that CMS has been tasked to reduce spending overall, in addition to pushing more money toward primary care services. “You can only push air around a balloon in so many directions,” he said.

Yet, these considerations will not deter the ACC, which continues to advocate for reversing these cuts through legal and regulatory options, as well as through a public relations campaign. “We really hope the [Obama] Administration will come to our rescue,” Lewin said. “It’s ironic that we’re facing this, as opposed to working on the healthcare reform agenda, but the attention of our members is now diverted to focus on the final rule.”