Healthcare Business News

CMS proposes 21.5% cut in Medicare doc payments

By Jennifer Lubell
Posted: July 1, 2009 - 2:30 pm ET

Physicians would receive a 21.5% cut to their Medicare payments starting Jan. 1, 2010, under a proposed rule issued by the CMS.

In a major step to revise the way it pays physicians, the agency is also proposing to remove physician-administered drugs from the formula used to calculate Medicare's physician fee schedule. The proposal to take drugs out of the formula won't prevent the anticipated cut in 2010; however, physicians will experience fewer years of negative updates if it is implemented.

The American Medical Association, which has been pushing for this measure for years, applauded the proposal. “The removal of physician-administered drugs from the broken Medicare physician payment formula is a major victory for America's seniors and their physicians,” J. James Rohack, president of the AMA, said in a written statement. “The AMA has been calling for this action since 2002 so that Congress can afford to repeal the flawed Medicare physician payment formula.”

The sustainable growth rate formula ties Medicare physician payments to several factors, including changes in the economy. Physicians would experience the 21.5% cut in 2010 unless Congress intervenes, as it has in the past.

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In other provisions, the CMS is proposing changes that are expected to increase payment rates for primary-care services, such as revising the treatment of malpractice premiums.

The changes proposed to physician payment rates in 2010 will affect more than 1 million physicians and nonphysician practitioners who are paid under the fee schedule.

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