WASHINGTON – Facing a significant reimbursement threat for ophthalmology in the proposed 2006 Physician Fee Schedule published by the Centers for Medicare and Medicaid Services (CMS), the American Academy of Ophthalmology mobilized and is providing the leadership needed to limit the detrimental impact of practice expense changes on the profession. The two types of practice expense (PE) – direct and indirect –are costs incurred in the operation of a physician’s practice and a critical component of the physician’s fee calculation. CMS plans to accept new PE data submitted by six specialties that appears to increase significantly the PE payments for these six specialties.

Due to budget neutrality requirements, significant movement of payments between specialties will occur due to these PE adjustments. Under the proposal, ophthalmology payments would be reduced 4.4 percent, phased in over four years starting with a 1.1 percent cut January 1, 2006. The Academy has demanded an immediate moratorium on CMS’s proposal to revise the PE data.

Upon publication of the proposed change, the Academy immediately organized a strong response by calling a meeting of specialty societies that would be negatively impacted by one percent or more to discuss ways to reduce the detrimental effects of the proposed changes. “We are concerned with the new survey data used by CMS to determine the overhead practice expense proposal in the rule,” said William Rich III, MD, the Academy’s medical director of health policy. “In addition, CMS’s assumption that the Practice Expense direct inputs are all correct is not valid. It should not implement the new methodology until all specialties have been resurveyed.”

The Academy and affected specialties, including the American College of Surgeons, American Society of Cataract and Refractive Surgery, anesthesiology, emergency medicine, neurological surgeons, thoracic surgeons, otolaryngology, orthopedics and rheumatology,  joined together to request that CMS make changes in the proposed rule. After an Academy-arranged meeting with CMS officials to make the case for a delay in implementing the practice expense changes, twelve specialties joined the Academy in a formal letter to CMS. One of the coalition’s principal concerns is CMS’s proposed adoption of new survey data of indirect expenses submitted by major specialties. Citing CMS’s failure to provide the actual data and information needed for physicians to adequately review and assess the validity of both the new methodology and the supplemental data, the Academy-led specialty coalition argues in its letter that a one-year delay would allow for a thorough review of the new data, testing the validity of the proposed methodology, and considering other possible options.

“Given the peculiar scenario – with a lack of information about how the changes were made and no time to review the data, we have a lot of questions for CMS that we think should be answered before any change is adopted,” said Catherine Cohen, the Academy’s vice president for governmental affairs. “A delay is the best course of action at this point.” CMS asks whether it should allow specialties to continue to submit new PE data.  The original practice expense data is based on the 1999 AMA’s Socioeconomic Monitoring System (SMS Survey). “At this point, we are asking CMS for more time and more information to allow all involved to make an informed recommendation. One thing is for sure, the outcome for ophthalmology is unacceptable,” said Cohen.

The Academy submitted its comments on the 2006 Physician Fee Schedule on September 30. CMS’s decision on the PE issue will be in the final fee schedule to be released on November 1, 2005.