GPCI, or “GYPSY”: Calculated or Covert Cuts to Oncology Reimbursement

A dear friend recently recanted to me some stories about her recent trip to Italy. One of her more memorable moments was bearing witness to a couple of young Gypsies slipping the wallets out of the pockets of some unsuspecting tourists. Within a nanosecond, cash and credit cards were gone. Thankfully, my friend saved the day by hurriedly calling attention to the heist, and theItalian polizia were quickly in pursuit.

This episode got me to thinking about the stark similarities between this incident and the impending changes and cuts to Medicare fees— more specifically, the Geographic Practice Cost Indices (GPCIs)—which will inevitably impact physicians in all specialties and locations in 2012.

The thought process behind GPCI, or “GYPSY,” starts with language and culture. One of the core beliefs among the nomadic Gypsy people is Jainism, which, in their Romani language means “understanding” (www.romanoliloro.com/understanding-gypsyculture.htm). Our GPCI is spoken in Relative Value Units (RVUs), which translates to “not understood.”

GPCI functions as the weighting factor for 90 geographic locations throughout the United States and Puerto Rico and is meant to be the cost-of-living adjustment for each of these locations. The weights apply to the work, practice, and malpractice components of each RVU for each Current Procedural Terminology (CPT), or service billing, code.

An example of this cloaked reduction using CPT code 99215, Estab - lished Patient Level 5, adjusted for South Carolina with 2012 GPCI values, looks like this:

• Without GPCI applied: (RVU work + RVU practice expense + RVU malpractice) × 2011 conversion factor, or (2.11 + 1.86 + 0.14) × $33.9764 = $139.64
• With GPCI applied: [(RVU work × GPCI work) + (RVU practice expense × GPCI practice expense) + (RVU malpractice × GPCI malpractice)] × 2011 conversion factor, or [(2.11 × 0.967) + (1.86 × 0.904) + (0.14 × 0.322)] × $33.9764 = $129.89

So, as you can see, the computation is not easily understood, and while you were not looking, the Gypsy lifted a 7% reduction from your pocket!

Some say that Gypsies came into existence in the mid-ninth century. By the mid-1400s, they had populated most of Europe and, deservedly or not, they developed a reputation as “tricksters” (www.squidoo.com/gypsymagic- customs). Our GPCIs were created from the Omnibus Budget Reconciliation Act of 1989 to measure resource cost differences. Snooping into the details, we learn a few things that may have gone unnoticed.

The Patient Protection and Afford - able Care Act of 2009 set a floor of 1.00 for the work component of the GPCI, to preserve neutrality. This floor was set to expire in 2010 but was extended through 2011. The good news is that this offered some protection from reductions to the work component for 3 years. The bad news is that this was merely a loan and not a gift—it only delayed the inevitable. (Sound familiar?)

The SGR (sustainable growth rate) dialect is related to the RVU dialect. Luckily, the Budget Reconciliation Act also requires that “catch-up” adjustments cannot be accomplished all in 1 year but rather gradually, over a 2-year period. Other possible “tricks” of the GPCI include:

• The work component of the GPCI is calculated from the Occupational Employment Statistics from years 2006-2008 by the Bureau of Labor Statistics. So then, does this mean that 3- to 4-year-old wage data are used to manage physician wages, that the Centers for Medicare & Medicaid Services (CMS) physician cuts in those years will again be felt 3 to 4 years later, and that depressed wages from other industries will impact the medical profession?
• The practice expense GPCI is gathered from the same Bureau of Labor Statistics and 2-bedroom residential apartment rent data from the Department of Housing and Urban Development. So then, are physician staff wages subject to the same 3- year lag time and influences of other industries? If housing starts are up (good economy) and apartment rentals are down (lower apartment costs), can we then expect that practice expense reimbursement will also be down? We fail to see the correlation here.

The 2012 final Physician Fee Schedule document has indicated that efforts are under way to assign more logical and applicable background statistics to practice expense adjustments. Until that happens, we are subject to the self-prophesying results that were typical of the Gypsy practice of fortune telling.

Finally, and not to make light of the historical persecution of the Gypsies, there does appear to be an oppression of sorts from our own 2012 GPCIs. The average adjustment from all 90 GPCI locales is –1.7% (based on impact analysis of the 2012 final Medicare Physician Fee Schedule prepared by Community Oncology Alliance, using provider data from 38 GPCI locations). This reduction is being referred to as the “stealth” cut by many provider advocate organizations. With all of the recent discussions over the SGR, the Super Committee outcomes, and a possible drug reimbursement change to the average sales price plus 3%, these GPCI reductions have gone virtually unnoticed, but they will have a devastating impact.

Consider our colleagues in the states of West Virginia, Oklahoma, and Mississippi, where GPCIs have reduced by 6.38%, 5.97%, and 5.52%, respectively, between 2011 and 2012. Locales with GPCI decreases outnumber locales with gains by a 2:1 ratio. The decreases are also much deeper than any gains. The average decrease in the 67 locales with GPCI reductions is 2.53%. The 20 locales with gains are realizing an average increase of only 0.86%. On the surface, these numbers are not very alarming; however, the devil (or Gypsy) is in the details.

Although this may be difficult to prove, when the variations in the different GPCI regions are examined, the disparity by total population seems to be even higher:

• The medical economic index reflects an annual increase of approximately 2%—not a 1.7% decrease—from 2004 through 2010; it seems there is no other healthcare expense that goes down every year, other than the reimbursement to the individuals who are taking care of our sick
• If a new physician in one of the Southern states decides to physically hang his shingle on one side of the street, he will realize a 3.4% reimbursement reduction from the 2011 rate, but if he chooses the opposite side of the street, his reimbursement will be 0.4% higher. Go figure.

This world of GPCI adjustments is complicated, not very transparent, and often hidden by other fee schedule cuts and changes. If only we could share the language and culture of the Gypsy nation so that we may be better able to understand this aspect of our world and actually read our future more effectively. Until that happens, we need more stewards like my dear friend to halt these stealthy thefts.

We hope that state medical societies and other physician support organizations will lobby against these 2012 changes and pressure CMS to review the numerous and more logical and rational approaches to GPCI adjustments. As it stands now, we have literally just had our pockets picked, and most of us do not even realize it.

Acknowledgment I wish to thank Mary Kruczynsk, Director of Policy Analysis, Com mun ity Oncology Alliance, for her contributions to the Gypsy aspect of this article, which has been imparted to her via her Romanian heritage.