CMS Projects 9.9% Medicare Fee Cut for 2008


Physicians will face a nearly 10% cut in Medicare payments in 2008 if Congress does not act to reverse it in the next few months.

Officials at the Centers for Medicare and Medicaid Services published a proposed rule outlining the projected 9.9% payment cut and other policy changes under the Medicare Physician Fee Schedule in the July 12 Federal Register; the agency was accept ing comments until Aug. 31. The final fee schedule rule will be published later this year.

A 9.9% cut would have devastating consequences for physicians and patients alike but is unlikely to be carried out, physicians said in interviews. Instead, Congress is likely to follow the pattern of the last 5 years and provide a 1- or 2-year temporary reprieve.

By law, CMS officials must adjust physician payments according to the sustainable growth rate (SGR) formula, which calculates physician payments based in part on the gross domestic product. The major medical specialty societies have been lobbying for years to change the formula, which they say does not account for their rising practice costs.

The proposed rule also addresses the continuance of the voluntary CMS' Physician Quality Reporting Initiative (PQRI) in 2008, and outlines new quality measures for next year. CMS officials are considering the feasibility of accepting clinical data from electronic health records. The agency will weigh whether to accept data on a limited number of ambulatory care PQRI measures for which data may also be submitted under the current Doctors Office Quality Information Technology Project (DOQ-IT). In 2008, submission through an electronic health record would be an alternative to the current claims-based reporting of data.

The proposed rule also outlines ways the agency would like to test the use of clinical data registries to report PQRI data. The testing, which would begin in 2008, would evaluate methods for physicians to report data to clinical data registries and for the registries to submit the data on the physician's behalf to CMS.

CMS officials are proposing to fund the bonus payments for the 2008 PQRI program by using $1.35 billion provided by Congress as part of the Physician Assistance and Quality Initiative Fund. In the proposed rule, CMS stated that the bonus payments were likely to be about 1.5% of allowed Medicare charges, not to exceed 2%.

That decision was criticized by the American Medical Association, which said the $1.35 billion should be used to reduce the projected 2008 physician pay cut. CMS estimates the $1.35 billion would reduce the projected cut by about 2%.

“The AMA and 85 other physician and health professional organizations sent a letter strongly urging the Administration to use this money to help Medicare physician payments keep pace with increases in practice costs. The Medicare Payment Advisory Commission made a similar recommendation,” Dr. Cecil B. Wilson, an AMA board member, said in a statement.

“CMS has chosen to spend all of the money to provide just 1.5% to 2% to physicians who report on certain quality measures.”

The proposed rule made other policy changes, including revising the methodology used to determine the average sales price for Part B drugs purchased in bundling arrangements. CMS is proposing to require drug manufacturers to report price concessions proportionately to the dollar value of the units of each drug sold under the bundling arrangement.

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