Leadership on the House Ways and Means Committee asked the CMS earlier this month to take administrative action to avert future cuts to doctors' reimbursements.
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 establishes a 1.5% increase in physician payments in 2004 and 2005. But starting in 2006, payments are likely to drop 5% annually, according to an April 1 letter to CMS Administrator Mark McClellan, M.D., from committee Chairman Bill Thomas (R-Calif.) and Rep. Nancy Johnson (R-Conn.), who chairs the panel's health subcommittee.
The CMS could revise the formula used to calculate physician payments through administrative actions rather than wait for Congress to pass a bill, Thomas and Johnson said in the letter. The CMS should eliminate prescription drug expenditures from the calculations because physicians don't control growth in drug costs, they said. The formula should reflect the cost of new Medicare benefits, and the CMS should "re-examine its assumptions" about how physicians offset payment deficiencies by increasing the volume and intensity of services, the letter said.