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CMS final rule announces a 21.2% Medicare physician payment cut for 2010
Physicians believe the payment decrease could lead them to look for Medicare-exit strategies.
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A final ruling by the Centers for Medicare & Medicaid Services calls for a 21.2% Medicare physician payment cut and includes refinements that will increase payment rates for primary care services.
Although original estimates projected that Medicare physicians would face a 21.5% drop in reimbursement, the new negative payment update reflects more recent data.
“The 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,” Jonathan Blum, director of the Centers for Medicare & Medicaid Services (CMS) Center for Medicare Management, stated in a press release.
“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. While this decision will not affect payments for services during CY 2010, CMS projects it will have a positive effect on future payment updates.”
Potential ramifications
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Orthopedics Today’s Business of Orthopedics Section Editor Jack M. Bert, MD, said that the sustainable growth rate (SGR) formula is flawed and that future cuts may have physicians looking for a Medicare-exit strategy.
“It serves political aims and goals, but does not serve the medical community well,” he told Orthopedics Today.
“Wondering if a 21.2% payment cut is going to occur distracts doctors, group administrators, and even patients from the larger questions at hand. A cut so drastic and dramatic would create rapid changes in behavior and set into motion future strategic plans which Congress and CMS may not have predicted,” he said
He added, “Eighty percent of the physicians in my 37-man group have decided to electively cease seeing Medicare patients if the 21% reduction goes into effect.”
Bert also projected that practices with large Medicare populations would likely enact overhead reductions within 6 months of the cut.
“It is sadly ironic that the patients who are most vulnerable, require the most attentive care and often require the most complex surgical cases are being devalued by Congress,” he said.
Threatening access to care
The American Medical Association (AMA) president, J. James Rohack, MD, said that the cuts would limit access to care.
“Access to care and choice of physician for seniors, baby boomers and military families is at serious risk — and Congress must fix the payment formula once and for all this year,” Rohack said in an AMA press release.
While he called for the repeal of the payment formula, he also supported the rule’s removal of physician-administered drugs from the formula.
“This is a long overdue step on the road to permanent reform as it significantly lowers the cost of fixing the formula once and for all,” Rohack said in the release. “AMA called for this action, and thanks the Obama administration for its recognition that physician-administered drugs do not belong in the payment formula.”
Additional changes
According to the CMS release, the ruling also includes changes in the payment rates for primary care services. While CMS had proposed to use information about physician practice costs from the Physician Practice Information Survey (PPIS), the agency will now phase in the information during a 4-year period.
In addition, CMS will continue to uses specialty supplemental survey data, not information from the PPIS, to determine practice expenses for medical oncology.
Significant modifications
“In the final rule with comment period, CMS is adopting two significant modifications to its proposal to increase the equipment utilization percentage that is assumed for purposes of setting PE RVUs [Pratice expense relative value units],” the CMS release continued. “CMS will increase the equipment utilization rate assumption used to determine the practice expense for expensive equipment priced over $1 million from 50% to 90% but will phase in this change over a 4-year period. CMS also will not apply this change to expensive therapeutic equipment.”
Programs
Several changes in the final rule could mean a slight payment increase for some physicians.
“Taking all changes in the final rule with comment period into account, CMS projects that payments to general practitioners, family physicians, internists, and geriatric specialists will increase by between 5% and 8%, prior to application of the negative update required by the SGR,” the release read.
Other provisions in the rule make changes to the Physician Quality Reporting Initiative (PQRI) and the Electronic Prescribing Incentive Program. These changes include providing participants with more reporting options and implementing a new method for practices to be considered successful e-prescribers.
For more information:
- Jack M. Bert, MD, can be reached at 17 W. Exchange St., 307 Gallery Medical Building, St. Paul, MN 55102; 651-223-9204; e-mail: bertx001@tc.umn.edu.
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