CMS Moves Ahead With Medicare Fee Cut

Unless Congress intervenes (again), the Centers for Medicare & Medicaid Services (CMS) will cut payments to physicians by 21.2 percent [PDF] on Jan. 1.

The cut would be averted if Congress passes and President Obama signs HR 3961, which replaces the Medicare Sustainable Growth Rate (SGR) formula for physician payments with a new system that is still based on general inflation rates. It also would set future payment rate changes separately for evaluation and management services and for procedural codes. House passage of HR 3961 is, however, critical if a permanent SGR fix is going to be included in a final health system reform package.

The House is scheduled to vote on the bill this week.

Jonathan Blum, director of the CMS Center for Medicare Management, said in a news release [PDF] that the Obama administration "tried to avert the pending fee schedule cut in the FY 2010 budget proposal that it submitted to Congress, and remains committed to repealing the SGR. In the meantime, CMS is finalizing its proposal to remove physician-administered drugs from the definition of 'physicians' services' for purposes of computing the physician fee schedule update."

The CMS news release also says the agency is finalizing its proposal to stop paying for consultation codes other than the G codes used to bill for telehealth consultations and to redistribute the resulting savings to increase payments for the existing evaluation and management services. "CMS will adjust the payment for the surgical global period to reflect the higher value of the office visits furnished during the global period," it said.

Other provisions of the rule will:

  • Add new Medicare benefit categories for cardiac and pulmonary rehabilitation services and for chronic kidney disease education beginning Jan. 1. 
  • Increase the Medicare share of payments for outpatient mental health services to 55 percent from 50 percent, beginning a gradual transition to bring payment parity for mental health and medical services furnished to Medicare beneficiaries.
  • Implement a requirement that suppliers of the technical component of advanced imaging services be accredited beginning Jan. 1, 2012. The accreditation requirement will apply to mobile units, physician offices, and independent diagnostic testing facilities that create the images, but will not apply to the physician who interprets them. 

You can find more information on the Texas Medical Association's recommendations for making the Medicare payment system fair to physicians on the TMA Web site.


TMA's Medicare Meltdown Action Center

Action, Nov. 16, 2009


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