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Questions submitted by Representative Thompson

Question: Reimbursement rates for physicians in counties across America are too low because CMS hasn't updated their geographic cost factors. Doctors in Sonoma County are getting paid 8.2% less than your own staff acknowledges that they should be paid. This is happening to doctors all-over. CMS has supported a budget neutral solution-going so far as to propose a budget neutral fix for Sonoma and Santa Cruz counties in the 2005 August Federal Register. You then withdrew this proposed solution due to what you cited as "nearly complete lack of support” in the November 2005 Physician Fee Schedule Final Rule. We will always see opposition to a “fix” that takes away from group A to give more to group B-regardless of whether or not group B really does deserve more. The CMA has proposed a nationwide fix that would cost only $115 million and has bipartisan support. Is CMS willing to work with Members to find an offset for this cost? What is CMS willing to do to make sure that this problem—which I have been fighting to resolve since I came to Congress in 1998, and others have been fighting even longer—can finally be rectified?

Answer: One proposal by the California Medical Association (CMA) would cost $115 million per year. That's more than a billion dollars over a 10-year budget-scoring window. Another CMA proposal would cost $300 million per year. That's $3.0 billion over 10 years.

Locality changes are budget-neutral with respect to the aggregate amount of Medicare money in a State. That is, reconfigurations of localities within a State do not result in any more Medicare money for the State in the aggregate, but only redistributions of money within a State. Since there will be both winners and losers in any locality reconfiguration, we rely on State medical associations to be the impetus behind these changes. We have assumed that opposition, or lack of support, from a State's medical association generally indicates a lack of broad support for the proposed change through the State's medical professional community. We have been working and will continue to work with the CMA, Members of Congress and other interested parties on the physician payment locality structure in California.

Question: State Health Insurance Assistance Programs-or SHIPs-get funded through the Medicare and You Education Program. According to the FY07 HHS Budget in Brief, they-and other outreach programs-are funded through Community Based Outreach. This year, Community Based Outreach is funded at $43.6 Million. What portion of that funding is allocated specifically for the SHIPs? What factors does CMS consider when determining the level of funding SHIPs need to meet beneficiary demand?

Answer: The Community-based Outreach appropriations are allocated across all the programs under that umbrella based on CMS objectives and corresponding program needs at the time the funding is to be distributed. Annual SHIP grants are awarded in late March, and fiscal year (FY) grants are announced at that time. For FY 2006, CMS awarded about $30 million in funding to SHIPS to help beneficiaries with enrolling in Medicare's new prescription drug program and understanding many other aspects of Medicare benefits. The FY 2007 grants will be announced in late March 2007, with the exact SHIP allocation known shortly before that time.

The level of funding allocated to the SHIPS is generally based on the relative number of beneficiaries in each state and the expected level of effort that is required to deliver counseling services. Consideration also is given for special needs groups that may require greater resources to serve, such as rural beneficiaries or other targeted populations.

Question: The Deficit Reduction Act included language to reduce payments for certain imaging services provided in the physician office setting or at stand-alone imaging centers. The payment amounts will be reduced to the amount paid in the hospital outpatient_setting. I am told that some codes may be reduced by more than 30% and others by as much as 75%, such as for vascular imaging using ultrasound. I understand the desire to address differences in payments between settings, but I'm curious about how it was decided to use the hospital outpatient value. Was it because it would save money, or were their other factors involved? Has there been any analysis of whether or not the outpatient payment amount is adequate or appropriate?

Answer: In 2006 Medicare pays a physician $903 for doing an MRI of the brain or an MRI of the abdomen. Medicare will also pay a Hospital Outpatient Department (OPD) $506 for the exact same test. Thus, Medicare is paying almost $400 or 78 percent more for doing these MRI imaging tests purely depending on whether

the test is performed in an OPD or a physician's office. Similarly, Medicare will pay 267 percent more for doing an ultrasound guidance for artery repair in a physician's office than an OPD ($228 vs. $62). These comparisons do not include a physician's interpretation of the test for which Medicare will pay a separate fee. There is no consistency in the percentage that the physician fee schedule exceeds the hospital OPD payment amount. The percentage difference varies by procedure.

In the context of: (1) significantly larger payments under the physician fee schedule than the OPD for the same service for certain imaging services, (2) site neutral payments for the same service identified by MedPAC as a long term goal under Medicare fee-for-service payment systems, (3) rapid growth in Medicare spending for imaging services for several years, (4) MedPAC raising methodological issues that suggest relative values under the physician fee schedule for imaging services would be too high, combined with a lack of procedure and equipment specific information on alternative equipment utilization assumptions to use in the practice expense formula to address such issues, section 5102(b) of the Deficit Reduction Act of 2005 establishes a payment limit for the technical component of imaging services. The provision requires that Medicare not pay a physician more than Medicare would pay the OPD for furnishing the same imaging procedure. A physician's interpretation of the test for which Medicare will pay a separate fee is not affected by the provision. This step to level the playingfield between physicians' offices and hospital OPDS only applies to procedures where Medicare pays more in physicians' offices; the DRA cap provision does not apply to all imaging procedures furnished in physicians' offices. In addition, the percent that Medicare payment rates for physicians exceeds OPDs are not all as large as the examples cited above; in numerous cases, the differential is 10 to 20 percent. Thus, the overall impact is not expected to be as dramatic as the example of some procedures. The DRA provisions will be implemented through notice and comment rulemaking. These proposals are expected to be published this summer and will allow for a 60 day public comment period. A final rule will be published by November 1, 2006 and will be effective for services furnished on or after January 1, 2007.

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Below are four questions that necessitate a response. Please find them below. 1. The National 800 Number Network has been a growing concern for Medicare Part D beneficiaries because of the busy rates running above 35%. Can you confirm the busy rate of callers to the 800 Number and explain how this issue is being addressed?

2. How are your Processing Centers addressing the large backlog as a result of the 200,000 in office visitors a day?

3. As the baby boomers retire, how will the SSA have the funds to replace SSA employees when their budget was cut by $300 million this year (FY07 proposed cuts appear to be significant as well); compounded by the increased responsibilities the government imposed on the SSA with the new Medicare Part D program?

4. SSA Commissioner Barnhart recently enacted a two-year hiring freeze acrossthe-board which went into effect January 6, 2006. In addition, the Commissioner suspended all overtime pay and restricted unpaid leave. How will you address employee dissatisfaction and maintain morale when SSA employees are fighting such an uphill battle?


Witold Skwierczynski

Aurora, Illinois 60505
February 3, 2006

To the Honorable Congressman Bill Thomas and the Committee on Ways and Means:

Please find attached a letter that I had written to Speaker of the House Dennis Hastert regarding my concerns with the Social Security/Supplemental Security and Medicaid process.

I am very concerned regarding the President's Fiscal Year 2007 Budget and its cuts to Medicaid, childcare and TANF. As you will see from my letter, I am an advocate for my clients many who are disabled and seeking SSI and Medicaid. Therefore, I witness firsthand the process involved in applying for these programs both for my clients as well as our local IDHS office.

The current system is already fraught with red tape and back logs in the processing of Medicaid claims especially in our area of Aurora/Kane County. I know however, these same issues are statewide. The current process of IDHS removing the P3 status, as well as the budget cuts to the Kane County IDHS office specifically (notwithstanding a need for further funding for the CAU Unit), our SSA Oak Brook office which serves our residents being too back logged, and finally a shortage of Administrative Law Judges to hear the cases, leads to the actual applicants unduly suffering and not having their cases heard in a fair and timely manner.

Further cuts to the Medicaid Program as well as the other cuts outlined in this budget will be detrimental to many of the over 50 million people who rely on Medicaid, as well as those applying. These cuts will also further burden local IDHS Office's which have already suffered from massive cuts and layoffs and are unable already to process the great volume of claims due to being short-staffed in a timely


I ask that you consider this letter and attachment to be officially submitted for record. Thank you for your time and attention to this matter.


Kim Aponte

October 13, 2005

Speaker of the House Dennis Hastert

14th Congressional District

235 Cannon Office Building

Washington, DC 20515

Dear Speaker of the House Dennis Hastert:

I am writing this letter to you as a representative of Aurora Township and as a social service professional. As case manager of Aurora Township in our General Assistance and Emergency Assistance programs, I witness firsthand those physically and mentally disabled individual's that come to our office to apply for assistance because they are unable to be self-sufficient due to no income and having to wait oftentimes years for their Social Security Disability Income (SSDI)/Supplemental Security Income (SSI) and subsequent Medicaid cards to be approved.

The application processes for all of these programs are technical, confusing and altogether too lengthy resulting in many individual's not qualifying for the benefits that they should be entitled to. The SSD/SSI process of usually over two years to make a determination on whether an individual is actually disabled or not is inhumane in that it forces those who cannot work and have no income to not have the medical or mental health services they so rightly are entitled to, not have access to prescription coverage (many times to lifesaving medications), as well as having no form of income with which one can survive. This lengthy process has also caused many individuals to become evicted or foreclosed on their apartments or homes and forces the burden then on friends and family members (many who are low-income themselves) to support these individuals until their determinations come through. Linked to the long application process of SSD or SSI, is the Illinois Department of Human Services (PA) application process for a medical card (Medicaid). This process takes anywhere from 60-77 days and is also very confusing, lengthy and complex. In most cases these applications are automatically denied unless the Social Security Administration (SSA) has deemed an individual disabled.

I am writing to ask your assistance and intervention in advocating for and proposing legislation that would improve Social Security's Disability process.

I currently have many clients that have been waiting over two years for their medical cards and SSD or SSI to be approved. Many of these clients have serious

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