Medicare Physician Payment Update

On Thursday, the AMA informed the NCMS that Senate Finance Committee chair Max Baucus (D-MT) and ranking member Charles Grassley (R-IA) had released the draft of a bipartisan jobs bill, known as the Hiring Incentives to Restore Employment (HIRE) Act. In addition to various recession relief provisions such as extensions of unemployment insurance benefits and COBRA premium assistance for terminated workers, the draft bill would extend a number of health care provisions that expired at the end of 2009, such as the 1.0 floor on geographic adjustments to physician work under the Medicare fee schedule.

The draft bill also calls for extending current Medicare physician payment rates for seven more months, through September 30, 2010, once again postponing the 21.2 percent cut that was scheduled to take effect on January 1.  Our understanding is that this 7-month reprieve represents a compromise between Senators who wanted to implement a routine one-year payment fix through the end of the year and others who were seeking another short bridge period to provide still more time for Congress to pass a permanent repeal of the Medicare sustainable growth rate (SGR) formula that calls for annual physician payment cuts.

The AMA continues to believe that it is time for Congress to address the SGR problem head-on and permanently repeal the formula once and for all.  The short-term, band-aid approaches  used in the past to stop imminent cuts only made future cuts steeper and increased the cost of permanent physician payment reform.  If Congress had fixed the problem in 2005, when physicians faced cuts of about 3.3 percent, the cost of permanent reform would have been about $49 billion.  Now, we are confronting a 21 percent cut and the cost of reform has skyrocketed to over $200 billion.

Read the AMA’s full report on the HIRE Act.

The NCMS continues to closely monitor developments on Capitol Hill and has actively communicated with the North Carolina Congressional Delegation on how physicians in NC feel about SGR and health system reform legislation pending before the House and Senate (see Health Care Reform: Looking for Direction, Bulletin Issue 5, February 5, 2010.

Physicians are urged to contact their Representatives and Senators and ask them to repeal the SGR and stop the cuts in Medicare physician reimbursement fees. Surveys among physicians have shown that if the cuts take effect, many doctors will limit the number of Medicare patients they see, or they will stop seeing them altogether. The NCMS will continue to keep physicians informed through the Bulletin, on the NCMS website, and on the Doctor to Doctor Blog.

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1 Comment

  • Should Congress allow CMS to implement the 21% reduction in Medicare reimbursements, it will casue a huge negative impact on my practice. I practice in eastern North Carolina and 70% of my practice is Medicare or Tricare. Tricare, the military healthcare system, bases it’s reimbursement on Medicare rates. Rather few physicians, and fewer specialists, now accept Tricare patients due to poor reimbursement. If the proposed SGR reduction occurs, even more physicians will be disincentivised to see Tricare patients, and our active duty and retired military population will suffer. John G. Steel, MD