Congress delays 5% cut in Medicare physician payments

In a last-minute flurry of activity before adjourning for the year, the U.S. House and Senate passed legislation to delay a proposed 5.1% cut in Medicare physician payments for 1 year, freezing the conversion factor at the 2006 level, according to a Legislative Alert from the American Society of Cataract and Refractive Surgery.

The legislation did not address cuts specific to ophthalmology due to changes in practice expense and work relative value units, and these cuts will still go into effect in 2007, according to the ASCRS alert.

The scheduled cut of 5.1% was the largest proposed reduction to physician payment since 2002, when fees were reduced by 5.4%.

The last-minute legislation, the Tax Relief and Health Care Act of 2006, also included implementation of a quality reporting system for physician services. Scheduled to take effect in July 2007, the program will include eight ophthalmic quality measures recently approved by the Ambulatory Care Quality Alliance.

Physicians who report on at least three of the eight quality measures will receive a bonus payment of 1.5%, but not until 2008, according to ASCRS. It is unclear whether the 1.5% bonus payment will be paid on all claims submitted for reimbursement or only those claims for which quality data have been reported, the ASCRS statement said.

The bill also established a Medicare reporting program for 2008 under which physicians can report on quality or structural measures, including those related to the use of health information technology, the ASCRS alert said.

The Alert noted ASCRS officials' concern that physicians will face a cut of about 10% in 2008 because the legislation does not change base payments beyond 2007.