Drugs Removed from Medicare’s Physician Payment Formula

The Obama administration proposed to remove physician-administered drugs from the Medicare physician payment formula in future years. Organized medicine has been working to get these drugs removed from the flawed physician payment formula since 2002.  Although this does not solve the Sustainable Growth Ratio (SGR) situation, it will likely reduce the size of future physician payment cuts.

Despite this change, without Congressional action, physicians are still facing an average of 21.5-percent cut to their Medicare payments in January 2010. 

There are also other changes included in the Center of Medicare and Medicaid Services (CMS) proposed rules  ( PDF ) for 2010 including large modifications to the relative value units (RVUs) for some specialties. One positive element is an increase in primary care physician payments. However, many specialties may face significant reductions. Stay tuned .


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