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CMS cuts physician fees 4.4%, leaves practice expense alone
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WASHINGTON — The Centers for Medicare & Medicaid Services plans to reduce Medicare payments to physicians by 4.4% in 2006, the agency announced last week. The CMS issued its final rule detailing physician payment changes and other policies for 2006 in a press release on Nov. 2.
“The existing law calls for a decrease in payment rates for physicians in response to continued rapid increases in use of services and spending growth,” said CMS administrator Mark B. McClellan, MD, PhD, in the press release. Dr. McClellan said Medicare does not have the authority to change the way physician fee updates are calculated, but he acknowledged that “the current system is not sustainable.”
The final rule revises a number of other policies affecting Medicare Part B services, the press release said. The ruling extends the glaucoma screening benefit to include Hispanic-Americans age 65 and older “because they are identified as an ethnic group at high risk for the disease,” the CMS release said.
The American Academy of Ophthalmology said it sees “good news and bad news” in the final rule for 2006. On the one hand, the 4.4% reduction in physician fees is bad news, but not unforeseen, given CMS’s inability to fix the flawed sustainable growth rate, the AAO said.
On the other hand, the AAO called “good news” the CMS’ decision not to move forward with changes to the way it calculates practice expense. Practice expense accounts for 45% of the physician’s fee in the update formula, the AAO said.
According to the AAO, the proposed changes to the practice expense component would have involved the acceptance of new data from six major medical specialties “and would have cut ophthalmology’s payments by another 4.4%, phased in over 4 years, starting with a 1.1% cut Jan. 1, 2006.”
According to its press release, the AAO was instrumental in the decision of CMS to shelve the practice expense proposal. The AAO is part of a multispecialty coalition working to find a better solution for including practice expenses in the update formula, the release said.
The AAO recognized “other positive changes” set out in the final rule, including CMS’ inclusion of Visudyne (verteporfin for injection, Novartis/QLT) and Macugen (pegaptanib, Pfizer/Eyetech) on CMS’ list of drugs approved for the Competitive Acquisition Program.