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Medicare News
Medicare Finalizes Expected 10 Percent 2008 Pay Cut
for Physicians
Congress expected to intervene with slight pay
increase
 Nov. 2, 2007 – Physicians will receive a 10 percent
pay cut for treating Medicare patients in 2008, according to an
announcement that had been expected from the Centers for Medicare &
Medicaid Services (CMS) on Thursday. CMA said it issued a final
physician payment rule designed to improve accuracy of Medicare payments
and give physicians and health care professionals additional financial
incentives to provide higher quality and value in the delivery of care.
Physican pay cuts have been proposed by Medicare
annually for the last five years. These have each been reversed by
Congress, which is again working on restoring some modest pay increase
to the doctors.
As in past years, the physicians are warning that
pay cuts will be a strong incentive for doctors to stop accepting
Medicare patients.
“Next year’s 10.1 percent physician payment cut is
bad news for America’s seniors as 60 percent of physicians say the cut
will force them to limit the number of new Medicare patients they can
treat. Congress must step in to replace the cut with payment increases
that keeps up with medical practice costs,” said Edward Langston, MD,
Board Chair for American Medical Association.
“The U.S. House has already acted, and now Medicare
patients and the physicians who care for them are asking the Senate to
take similar action. By eliminating $54 billion in excess payments to
insurance companies, Congress can preserve seniors’ access to health
care by funding payment increases for physicians and limiting patient
premium increases.”
Under the new rule, Medicare estimates that it will
pay approximately $58.9 billion to about 900,000 physicians and other
health care professionals. The revised payments, quality incentive rates
and related policy changes, which will become effective January 1, 2008,
are included in the Medicare Physician Fee Schedule (MPFS) final rule.
The rule went on display yesterday at the Federal Register.
“This rule builds on the changes we have made to
pay more appropriately and transform Medicare into an active purchaser
of higher quality services” said acting CMS Administrator Kerry Weems.
“It also encourages the use of electronic
prescribing to improve the speed and accuracy of care to beneficiaries,
and extends payment incentives for quality measures.”
As directed by the Tax Relief and Health Care Act
of 2006, CMS implemented a voluntary reporting program for 2007 for
physicians and other health care practitioners. Since July 1, 2007,
under the Physician Quality Reporting Initiative (PQRI), eligible
professionals who report specific measures on quality of care furnished
to Medicare beneficiaries may earn incentives up to 1.5 percent of their
total allowed charges, subject to a cap.
In the 2008 final rule, CMS outlines PQRI measures
that were endorsed by the National Quality Forum, and other sources
completing development for upcoming PQRI implementation.
These structural measures, which focus on whether a
health care professional uses electronic health records and/or
electronic prescribing, emphasize the importance of this technology for
delivery of high-quality health care services.
Physician and non-physician professionals not
meeting PQRI measures will be allowed to participate by reporting on
their use of health information technology. The Physician Assistance
and Quality Initiative Fund will provide $1.35 billion for physician
payment and quality improvement initiatives for services furnished in
2008.
The Medicare law includes a statutory formula
requiring CMS to implement a negative 10.1 percent update in payment
rates for physician-related services. This formula compares the actual
rate of growth in spending to a target rate, which is based on such
factors as the growth in the number of Medicare fee-for-service
beneficiaries and statutory or regulatory changes in benefits.
CMS said it has no choice but to implement this
negative update because it is mandated by a statutory formula.
Under this law, if the actual rate of spending
growth exceeds the target rate, the update is decreased; if it is less,
the update is increased. Since 2002, because payment for physician
services increased faster than projections, the statutory update formula
dictated payment cuts. A negative update went into effect in 2002, but
for 2003 to 2007, Congress intervened and temporarily suspended
requirements in favor of specific, statutory updates.
“CMS will continue to work with Congress and
physician groups to identify payment methods that help improve the
quality and efficiency of care in a way that is mindful to not increase
costs to taxpayers, Medicare, and its beneficiaries,” Weems said.
“Medicare needs to compensate physicians appropriately for the services
they furnish to people with Medicare. We believe the early work on the
Physician Quality Reporting Initiative is one of those reforms that can
help lead to better quality and more efficient care.”
The proposal to eliminate the computer-generated
fax exemption from e-prescribing was modified in response to comments to
provide for retention of the exemption only in instances of
temporary/transient transmission failure and communication problems that
would preclude the use of the NCPDP SCRIPT standard adopted in the final
rule. The new provision will be effective January 1, 2009. This
transition period is intended to allow all prescribers and dispensers
adequate time to obtain or upgrade existing software.
For an additional year, CMS will continue payments
for pre-admission-related services for intravenous infusion of
immunoglobulin (IVIG). This payment is for extra resources expended to
locate and obtain IVIG products that are appropriate for patient
treatments and to schedule infusions. Health care providers may bill
for each related physician office visit when IVIG treatments are
administered.
The 2008 rule also adopts recommendations of the
American Medical Association’s Relative Value Update Committee to
increase the payments for the work involved in providing anesthesia
services by 32 percent. In addition, the value of the work component of
certain physician visits to patients’ homes will increase.
“This builds upon increases for primary care
services that Medicare implemented last year,” said Weems “By paying
physicians more to spend time talking to their patients about their
health, we hope to improve health status of Medicare beneficiaries.”
Other provisions in this rule include:
● Updating the Geographic Practice Cost Indices
to reflect more recent data;
● Updating regulations governing payment of
certain services furnished in Comprehensive Outpatient Rehabilitation
Facilities, to reflect payment under the MPFS;
● Adding neurobehavioral status exams to the list
of Medicare telemedicine services;
● Adding certain ophthalmologic imaging
procedures to the list of procedures subject to the Deficit Reduction
Act of 2005 provision that caps payment for the technical component of
imaging procedures at the payment amount under the hospital outpatient
prospective payment system;
● Specifying requirements under the competitive
acquisition program for Part B drugs for verifying that a drug ordered
by a physician has been administered;
● Improvements to the process for determining
payment for new clinical laboratory tests;
● Modifying enrollment standards for Independent
Diagnostic Testing Facilities;
● Imposing an anti-markup restriction on the
technical component (TC) or professional component (PC) of diagnostic
tests (other than clinical lab tests) that are ordered by the billing
supplier, if the TC or PC is purchased by the billing supplier, or the
TC or PC is performed outside of the office of the billing supplier; and
● Requiring that persons furnishing physical and
occupational therapy services to people with Medicare meet licensing,
registration, or certification requirements in the state in which they
practice, and that they complete an approved educational program for the
discipline in which they practice. This rule also changes the time
frames for certifying a therapy plan of care.
The final rule, effective for services on or after
January 1, 2008, will go on display today and will be published in the
Federal Register on November 27, 2007. The rule can be found at
http://www.cms.hhs.gov/center/physician.asp.
For more information, please see fact sheets on
Preventive Services, Physician Participation, and Imaging Services at
www.cms.hhs.gov/apps/media/?media=facts.
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