1

1 AMERICAN MEDICAL ASSOCIATION HOUSE OF DELEGATES

2
3
4 Resolution: 212
5 (A-09)
6
7Introduced by: Iowa Delegation
8
9Subject: Geographic Practice Cost Index (GPCI) Adjustment to Technical Component
10 Fees for Imaging Procedures
11
12Referred to: Reference Committee B
13 (Monica C. Wehby, MD, Chair)
14
15
16Whereas, Geographic Practice Cost Index (GPCI) adjustments for Medicare physician
17professional fees result in differentials of 30-40% between areas of the country; and
18
19Whereas, GPCI adjustments for Medicare technical fees for imaging studies show even larger
20differences, as much as 43% less in some rural areas (i.e. 73% higher in some urban areas);
21and
22
23Whereas, Many rural areas of the country are at risk of losing imaging services because they
24are so poorly reimbursed by Medicare; and
25
26Whereas, Practice expense GPCI adjustments for imaging technical fees are based on limited
27data from indirect sources, such as apartment rental rates for the office rent category of the
28GPCI and only four occupations for the wage category; and
29
30Whereas, Other credible data sources have not been used, such as practice expense surveys
31from the Medical Group Management Association and Medical Economics; and
32
33Whereas, The Medical Economics 2007 survey shows rural physician practice expenses are
34$250,000 per year compared to urban ($210,000) and inner city ($180,000) practice expenses;
35and
36
37Whereas, The Centers for Medicare & Medicaid Services has never used a survey to measure
38actual physician expenses for GPCI determination but instead uses proxies which have never
39been shown to be accurate or reliable; and
40
41Whereas, The GPCI adjustments to imaging technical fees use a constant percentage weighting
42of rent (28%), equipment and supplies (29%), and wages (43%) that is far from accurate,
43especially considering that the cost of imaging equipment and supplies can be over 78% of the
44total cost of running imaging procedures; and
45
46Whereas, Vendors do not offer discounts on purchases of imaging equipment and supplies for
47rural areas (geographic location); and
48
49Whereas, With lower volumes of imaging procedures, practice costs for imaging may actually be
50higher in rural areas; therefore be it

2
 3 Resolution: 212 (A-09)
4 Page 2
5
6
1RESOLVED, That our American Medical Association advocate Congress to immediately
2eliminate the inaccurate Geographic Practice Cost Index (GPCI) adjustment for the technical
3component of imaging studies (Directive to Take Action); and be it further
4
5RESOLVED, That our AMA advocate Congress to bring about a 1.0 floor for all Geographic
6Practice Cost Index (GPCI) practice expense adjustments. (Directive to Take Action)
7
8Fiscal Note: Implement accordingly at estimated staff cost of $9,294.
9
10Received: 05/06/09
11
12RELEVANT AMA POLICY
13
14H-400.988 Medicare Reimbursement, Geographical Differences - The AMA reaffirms its policy that geographic
15variations under a Medicare payment schedule should reflect only valid and demonstrable differences in physician
16practice costs, especially liability premiums, with further adjustments as needed to remedy demonstrable access
17problems in specific geographic areas. (Sub. Res. 82, A-89; Reaffirmed: BOT Rep. DD, I-92; Reaffirmed: CMS Rep.
1810, A-03; Reaffirmation A-06; Reaffirmation I-07; Reaffirmation A-08)
19
20H-390.853 Protecting Patient Access to High Quality Imaging Services - Our AMA actively supports repeal or
21delay of the provision under Section 5102 of the Deficit Reduction Omnibus Reconciliation Act of 2005 that reduces
22the technical component payment (including the technical component of the global payment) for an imaging service
23under the physician payment schedule if it exceeds (without regard to geographic wage adjustment factor) the
24outpatient department payment schedule amount for the service established under the Medicare prospective
25payment system for hospital outpatient departments. (Res. 208, A-06; Reaffirmed per BOT Action in response to
26referred for decision Res. 236, A-06; Reaffirmation I-06)
27
28D-390.969 Parity in Medicare Reimbursement - Our AMA will continue its comprehensive advocacy campaign to:
29(1) repeal the Medicare physician payment formula, the sustainable growth rate (SGR); (2) repeal or delay the
30reductions in Medicare payment for imaging services furnished in physicians’ offices, as mandated by the Deficit
31Reduction Act of 2005; (3) pass legislation allowing physicians to share in Medicare Part A savings that are achieved
32when physicians provide medical care that results in fewer in-patient complications, shorter lengths-of-stays, and
33fewer hospital readmissions; and (4) advocate for other mechanisms to ensure adequate payments to physicians,
34such as balance billing and gainsharing (BOT Action in response to referred for decision Res. 236, A-06;
35Reaffirmation I-08)
36
37H-390.945 Legal Action to Resolve Medicare Reimbursement Disparities - Our AMA believes that: (1) current
38geographic inequities in Medicare payments for physician services pose a serious threat to access to care for many
39Medicare beneficiaries; and; (2) such payment inequities must be addressed and remedied in a timely manner,
40without awaiting implementation of a new Medicare indemnity physician payment system. (Sub. Res. 69, I-88;
41Reaffirmed: Sunset Report, I-98; Reaffirmation A-06; Reaffirmed in lieu of Res. 921, I-06; Reaffirmation I-07)
42
43D-400.985 Geographic Practice Cost Index - Our AMA will: (1) use the AMA Physician Practice Information Survey
44to determine actual differences in rural vs. urban practice expenses; (2) seek Congressional authorization of a
45detailed study of the way rents are reflected in the Geographic Practice Cost Index (GPCI); and (3) advocate that
46payments under physician quality improvement initiatives not be subject to existing geographic variation adjustments
47(i.e., GPCIs). (Sub. Res. 810, I-08)
48
49D-390.997 CMS Practice Expense Formula - Our AMA will seek from Congress legislation directing CMS that it
50include in the RBRVS practice expense allocation all costs incurred by physicians, including those costs incurred in
51hospitals and ambulatory surgical centers. (Sub. Res. 819, I-99)
52
53D-400.989 Equal Pay for Equal Work - Our AMA: (1) shall make its first legislative priority to fix the Medicare
54payment update problem because this is the most immediate means of increasing Medicare payments to physicians
55in rural states and will have the greatest impact; (2) shall seek enactment of legislation directing the General
56Accounting Office to develop and recommend to Congress policy options for reducing any unjustified geographic
57disparities in Medicare physician payment rates and improving physician recruitment and retention in underserved
58rural areas; and (3) shall advocate strongly to the current administration and Congress that additional funds must be
59put into the Medicare physician payment system and that continued budget neutrality is not an option. (BOT Rep. 14,
60A-02; Reaffirmation A-06; Reaffirmation I-07; Reaffirmation A-08; Reaffirmed: Sub. Res. 810, I-08)