It's a great day for physicians in the United States! Yesterday evening, Congress passed — by a two-vote margin — the budget legislation that retroactively adverts the 4.4 percent cut in Medicare reimbursements for physicians. The bill freezes the Medicare conversion factor for one year.

The AUA applauds this action and we will continue our work to stop this yearly exercise and push for reform of the flawed Medicare payment system. AUA urologists generated 750 e-mails and, through our work with the Alliance of Specialty Medicine, more than 1,000 physician calls were made to Congress to make the message clear. Working with AUA physicians over the past year, we have identified the numerous problems and steadfastly lobbied for a halt to the payment cuts and negotiated with the administration and Congress over implementation of so-called pay-for-performance (P4P) legislation. The conference report not only halts the cut for 2006, but also provided an additional success for AUA lobbying efforts this year — it stripped out the onerous Senate P4P initiative from the Senate budget reconciliation bill.

Again, we can not thank our grassroots urologists enough for taking the time to help effect this important change!

This change will cost the federal budget $7 billion, but congressionally mandated budget neutrality required that monies be found to pay for this adjustment. To pay for the one year fix, House and Senate conferees turned once again to imaging procedures. Conferees decided to cap the technical component reimbursement for physician office imaging to the lesser of the Hospital Outpatient Prospective Payment or Medicare Fee Schedule payment. The legislation also calls for a 25 percent reimbursement cut for imaging exams on contiguous body parts in the same session in 2006 with an additional 25 percent reduction to take effect in 2007.

"This congressional move effectively negates the validated, data-driven Resource Based Relative Value System (RBRVS) methodology of calculating physician costs that have been the basis of Medicare reimbursement policy for years," said AUA Health Policy Chair James B. Regan, also a representative to the AMA Relative-Value System Update Committee (RUC). "Years of work by all physician specialty societies to provide the data that demonstrates the true costs of providing medical care to CMS." This process, in place since the early 1990s, has kept members of Congress out of the untenable position of deciding winners and losers in the Medicare reimbursement system.

Watch for further updates and information about implementation of the new conversion factor and how to submit for retroactive reimbursement in the AUA Health Policy Brief and on AUAnet.org.

On February 15, the AUA will represent its members at a CMS Town Hall Meeting on the Practice Expense (PE) Methodology. The purpose of this meeting is to clarify CMS's proposed revisions to the PE methodology contained in the 2006 proposed rule, to solicit input on the proposed changes and to receive comments and opinions from the medical community regarding issues for the 2007 proposed rule. AUA Health Policy Council Chair James B. Regan M.D. will present AUA comments at the town-hall meeting.

As reported earlier, CMS did not include urology's proposed practice expense increases in the 2006 physician fee schedule final rule, which contradicts the requirements of the Medicare Modernization Act (MMA) of 2003 regarding use of supplemental PE survey data. Unfortunately, CMS's proposal to incorporate the new PE data was wrapped up with a proposal to also change the methodology for calculating practice expense values. CMS withdrew its entire proposal after many groups requested a one-year delay in implementation, claiming that there was not enough information to adequately analyze impacts of the proposed changes. A calculation error that caused incorrect PE values and impacts to be published in the August 2005 proposed rule also played in to CMS's decision to withdraw the PE proposal.

Although CMS did update urology drug administration codes using the AUA's supplemental PE data, the AUA still maintains that the MMA requires CMS to use supplemental data to update PE RVUs for all urology codes, and this is the message we will continue to convey at the town-hall meeting. The AUA also continues to work on its own and with the Practice Expense Supplemental Survey (PESS) Coalition to keep the issue in front of CMS and Congress until it is appropriately resolved. The PESS Coalition consists of the AUA and other specialties who submitted supplemental practice expense data that was not used for 2006.

As you know, CMS will begin to phase in the Competitive Acquisition Program (CAP) for drugs on July 1. However, there has been some speculation that the program would not get off the ground if CMS could not adequately address concerns of physicians and CAP vendors and that no vendors would bid to participate. Although CMS has not made a formal announcement yet, recent news indicates that three large pharmaceutical suppliers submitted bids to participate, and that the companies are large enough to keep the program running until Congress can enact changes to improve the program.

It is rumored that House Ways and Means Chairman Bill Thomas (R-CA), the architect of the program, will include changes in Medicare legislation this year. In fact, this has been cited as a major reason for re-opening Medicare legislation in 2006. Although CMS made some changes in the November 21, 2005 CAP final rule, they still did not go far enough to adequately address concerns on the side of vendors and physicians. Vendors continue to express concern about their being held responsible for drugs that are unused or wasted due to broken, spilled or contaminated doses. The AUA will watch closely for and oppose any changes that would try to shift responsibility for such problems to the physician as well as continue to push for other changes to make this program more appealing to urological practices.

CMS did solve one major program in the CAP when it announced last November that it would exclude units of drugs supplied under the CAP from ASP calculations for a period of time up to three years, at which time the policy will be re-evaluated. The AUA strongly supports this decision and had urged CMS in previous comments on the CAP to exclude the prices that CAP vendors pay for drugs from ASP calculations. Assuming that CAP vendors receive substantial discounts for buying in bulk, including CAP vendor prices in ASP calculations would have driven down the Medicare payment to physicians that is recalculated each quarter and could have caused physicians who do not choose the CAP to have even more problems acquiring drugs at or below 106 percent of ASP.