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June 30, 2010
In a proposed rule by the Centers for Medicare and Medicaid Services (CMS) physicians could see a 6.1 percent Medicare payment cut on Jan. 1, 2011 and Medicare patients could see expanded services.
That cut could be much bigger if Congress does not take action on the current formula for Medicare payments to physicians. According to the sustainable growth rate formula (SGR) adopted in the Balanced Budget Act of 1997, Medicare physician payments should have been decreased every year since 2002. But every year legislation has stopped those increases.
On Jan. 25 President Obama signed the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010. That Act averted a 21.3 percent cut in Medicare payments to doctors that was called for under the current SGR formula and was supposed to take effect on Jan. 1, 2010. That cut has been postponed three times and in the latest postponement by Congress doctors also gained a 2.2 percent increase in payments through Nov. 30, 2010.
But unless Congress passes new legislation, the SGR formula will call for that 21.3 percent cut on Dec. 1, 2010, plus the removal of the 2.2 percent payment increase for a total cut of 23.5 percent. Then on Jan. 1, 2011 the 6.1 percent cut could be added for a total cut of 29.6 percent. Although that 6.1 percent that is part of CMS’s proposed rule could very well be higher or lower by the time the rule is finalized, said Ellen Griffith, a CMS spokesperson.
“Unfortunately it pushes some doctors to the margins where they have no choice but to stop taking Medicare patients,” said Andrew LaMar, a spokesman for the California Medical Association. “If you can’t balance your books, pay your fees and staff, you have to take those kinds of steps,” he said.
With three postponements of Medicare payment cuts to doctors this year alone, there’s a lot of attention on the issue in Congress and CMA is thankful for the support its been getting on this issue from California members of Congress, LaMar said.
“Until there’s ultimately a repeal of SGR or something that provides more long-term stability, we’re going to have problems,” he said.
Griffith said the intent to make changes is clear. “The Obama Administration is committed to working with Congress to fix the formula,” she said.
CMS’s proposed rule also implements provisions in the Affordable Care Act of 2010 that would increase benefits to Medicare patients. To date Medicare has not paid for annual wellness visits, it has only paid for a “Welcome to Medicare Visit,” the initial preventative physical examination. This CMS proposed rule would eliminate out-of-pocket costs for wellness visits on an annual basis as well as for most other preventative services.
Some other elements of the proposed rule include a payment incentive program for general surgeons who do major surgeries in areas designated as Health Professional Shortage Areas.
The proposed rule would also decrease physicians’ payments for diagnostic imaging equipment used for computed tomography (CT) and magnetic resonance imaging (MRI) services. In order to compensate physicians for those machines CMS has to make assumptions as to how often they will be used.
“We had assumed this equipment would be used 50 percent of the time, data shows it’s used far more often,” Griffith said. “If you underestimate the use, you over pay for it,” she said. Congress modified the utilization rate to 75 percent which will reduce payments to physicians. That will in turn reduce payments Medicare patients have to make because their payments are based on a percentage of what CMS pays the doctors, Griffith said.
CMS will accept comments on the proposed rule until Aug. 24, 2010. It expects to issue a final rule, with responses to the comments around Nov. 1, 2010.
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