Wednesday, November 2, 2011

CMS Issues Proposed 2012 Medicare Physician Fee Schedule --- Dramatic Cut to Physician Reimbursement if Congress does not act

Unless Congress intervenes (yet again), physicians will incur a 27.4 percent reduction in Medicare payment rates Jan. 1 2012, according to the Center for Medicare & Medicaid Services (CMS) final rule released yesterday. This cut is actually a bit smaller than the the 29.5 percent CMS estimated in March due to reduced physician visits but is clearly a threat of a massive, unsustainable cut.

"This payment rate cut would have dire consequences that should not be allowed to happen," CMS Administrator Dr. Donald M. Berwick said in a press release. "We need a permanent SGR fix to solve this problem once and for all." The American Medical Association (AMA) released a similar statement decrying the cuts and repeating its call for a solution. "Payments for Medicare physician services have fallen so far below increases in medical practice costs that there is a 20 percent gap between Medicare payment updates and the cost of caring for seniors," AMA President Dr. Peter W. Carmel said. He continued, "The Joint Select Committee on Deficit Reduction must include repeal of the formula in their recommendation to Congress to protect access to care for seniors and stabilize the Medicare program."

Other changes were announced in the rule but most none as significant as this issue including:


  • Increases in payments for Medicare beneficiaries' Annual Wellness Visits to reflect the additional office staff time required to administer a health risk assessment in conjunction with the visit

  • Continuation of CMS's "misvalued code initiative," focusing on codes billed by physicians in each specialty that result in the highest Medicare expenditures under the fee schedule

  • Changes to the way CMS adjusts payment for geographic variation in the cost of practice

  • Reduction in payment for a second advanced imaging service provided by the same physician on the same day

  • Expansion of covered telehealth services, including smoking cessation

The final rule will appear in the Federal Register Nov. 28 but the real action will be to see when and if Congress will address the SGR issue in at least another temporary way.