Professional medical organizations were quick to react last month to a rule issued by the Centers for Medicare and Medicaid Services that established a 5 percent reduction in physician payments for 2007.
The agency said the rule reflects the requirements of existing law – specifically the Sustainable Growth Rate formula – to reduce payments to account for the combined growth in volume and intensity of physician services.
In making the announcement, CMS said it was implementing other initiatives that could increase payments to physicians. For example, it was touting the fact that it would pay physicians more for the time they spend talking with Medicare beneficiaries about their healthcare, and that it would pay for a broader range of preventive services.
In recent years, Congress has reversed most of the cuts in physician payment rates established by the SGR. However, no such action has occurred this year, and many observers say it’s unlikely that Congress will roll back the cuts during the short session now under way and ending before the holidays.
The changes in fees are included in the Medicare Physician Fee Schedule final rule, which was issued on Nov. 1.
Physician groups used the CMS release of the rule to increase the clamor for legislative intervention.
“The release of the Medicare physician payment rule serves as a harsh reminder of the need for congressional action to stop next year’s Medicare physician payment cut,” said Cecil B. Wilson, AMA board chairman, in a written statement.
“For the last five years, Medicare physician payments have failed to reflect the government’s own measure of annual increases in medical practice costs,” he said. “For nearly half of physicians, the 2007 Medicare payment cuts will range from 6 percent to 20 percent because of additional payment policy changes.”
While increased fees for patient consultations are welcome, they won’t be enough to offset the expected cut, Wilson said. “We’re deeply disappointed that CMS has declined to take administrative actions within their power to take no action to
lessen the severity of the cuts,” he said.
The increase in the relative value units for patient evaluation and management are welcome, said Rick Kellerman, MD, president of the American Academy of Family Practitioners.
“That’s been undervalued for at least 10 years,” he said. However, he added, an adjustment factor is expected to be applied to the rates that will negate some of the increases.
The CMS rule also indicates that the agency will take a fresh look at the methodology for calculating practices’ work expenses — which many contend is the reason why physician payment rates calculated under the SGR fall each year.
“Ultimately, what they’ll find is they’re underestimating practice expenses,” Kellerman said.
“The SGR formula is fundamentally flawed; you put the numbers in (that the formula calls for) and it kicks out a decrease for physicians,” he said. “Everyone we’ve talked to agrees on this. We need to find the political will to get this fixed.
“The AAFP hopes the next Congress will be the healthcare Congress and we can look at this and a lot of issues,” he added. “We’re hoping that, after the election, we can sit down in a true bipartisan manner.”