A short reprieve from Medicare cuts and a little something extra, too
President Obama is expected to sign into law legislation that would grant physicians a reprieve from drastic cuts in their Medicare payments beginning on Jan. 1. The new law, adopted by the Congress last week, provides a 0.5 percent update to Medicare payments for the first three months of 2014 and avoids a 24 percent cut otherwise required under current law.
That action gives Congress three more months to complete its work on legislation that would repeal the Sustainable Growth Rate (SGR) without further disruption to the Medicare program. Both the Senate Finance Committee and the House Ways and Means Committee (amending a bill produced by the House Energy and Commerce Committee) have overwhelmingly approved similar but not identical bills – the SGR Repeal and Medicare Beneficiary Access Act (S 1871) and the Medicare Patient Access and Quality Improvement Act (HR 2810). The three-month extension of the Medicare physician fee schedule (with a 0.5-percent increase) means that the two committees have until March 31 to work out the differences in the bills.
In the meantime, physicians must make decisions about their Medicare participation status for 2014. Physicians wishing to change their Medicare participation or non-participation status for 2014 are required to do so by Jan. 31, 2014. Participation decisions are effective Jan. 1, 2014, even if made between then and Jan. 31, 2014, and are binding for the entire year. More information on physicians’ Medicare participation options is available on the AAFP web site.
– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians
Another patch and another cliff
Last week, a U.S. House-Senate Conference Committee reached a 10-month deal that would maintain current physician payment rates through the end of the year. The measure, H.R. 3630 (at the THOMAS website, type "H.R. 3630" into the search field after selecting "Bill Number"), was subsequently approved by both the House and Senate. Yesterday, the President signed the bill into law.
This latest patch to the Medicare physician fee schedule avoids the 27.4 percent Medicare physician payment cut that was otherwise scheduled to occur on March 1 as a result of the sustainable growth rate (SGR) formula. Because H.R. 3630 postpones but does not eliminate the threat posed by the SGR, physicians will face a 32 percent Medicare payment reduction when the payment patch expires at the end of this year, which makes Jan. 1, 2013, the next "cliff" that physicians will face in terms of Medicare payments.
As noted, the law does not solve the underlying problem. It only postpones its resolution and adds to the cost of a permanent solution. The cost of repealing the SGR will climb from $316 billion today to $335 billion in 2013. In the meantime, physicians are left to cope with the ongoing uncertainty and hope that Congress will find the fortitude and funds for a permanent solution before 2013 rolls around.
A happy new year, indeed!
In my last post ("Good news from Medicare, over time," Dec. 2, 2010), I mentioned that, assuming Congress intervenes again by the end of the year and the conversion factor for 2011 is no less than it is now, there would be good news for family physicians in the 2011 Medicare physician fee schedule. Well, I am happy to report that Congress and the President did intervene last week and approved legislation that extends the current Medicare physician payment rate through the end of 2011.
Admittedly, no increase in the Medicare conversion factor does not sound like good news; after all, it's not like your expenses are going to remain flat for the next year. However, no increase is better than the 25 percent decrease that would have occurred in the absence of an extension. Further, as I noted in my last post, because of relative value unit changes, family physicians should experience an increase in the Medicare payment allowance for some of the services that they provide most often, not to mention the primary care bonus that Medicare will begin to pay in 2011.
Congress also voted last week to exempt physicians from the Federal Trade Commission's Red Flags Rule. The rule, which applies to creditors and is in intended to stop identity theft, would have been onerous for the typical medical practice. That burden will now be avoided.
So, as you prepare to ring in the new year, you may do so with the knowledge that you will not be paid any less by Medicare in 2011 and, in fact, as a family physician, you will probably be paid more. Happy new year!
SGR relief: Let us give thanks, for now
In my last post ("The 2011 Medicare physician fee schedule is here," Nov. 5, 2010), I noted that the fee schedule conversion factor would drop from its current $36.8729 to $25.5217 in January, unless Congress and the President intervened. Thankfully, the U.S. Senate began the intervention process yesterday.
Specifically, yesterday evening, the Senate approved a one-month extension of the current conversion factor. Unfortunately, they did so after the House had recessed for the Thanksgiving holidays, so the House cannot act on the measure until legislators return. However, the House Majority Leader's Office issued this statement: "Tonight, the Senate passed a one month extension of the current Medicare physician payment rates. It is my intention to schedule this bill for consideration when the House reconvenes on Nov. 29, so we can send it to the President's desk prior to the Nov. 30 expiration date of current SGR relief."
Thus, it appears the fee schedule conversion factor will not drop before the end of the year. Beyond that, who knows? The cost of a 12-month extension that will include some other Medicare provisions is roughly $19 billion. Where that money might be found in the federal budget is unknown, and Senate Democratic leaders have indicated that none of it should come from repealing portions of the health reform legislation. Even if (and this is a big IF) there are sufficient funds for a 12-month extension, the next issue is the legislative vehicle to make that happen. Should Congress use the Continuing Resolution (which is likely to be only two to three months, but will certainly pass to keep the government operating) or the tax bill (which is likely to be an extension for a year or two of the current tax structure, but which will be the most politically volatile bill)? Absent sufficient funds for a 12-month extension, the question will be how long should the extension be (i.e., how long an extension can be funded)? Ultimately, this may be mostly a political question about whether it is better to force a showdown on health reform sooner or later.
In the meantime, as you prepare to enjoy your turkey (or other holiday meal of choice) next week, say a little word of thanks for the folks in Washington who have spared the Medicare physician fee schedule for another month. And if you're so inclined, say a little prayer that they will find the money (and the fortitude) to implement a longer-term fix before the end of the year.
The 2011 Medicare physician fee schedule is here
An initial review shows positive news with respect to the primary care bonus that is effective in 2011. CMS apparently responded positively to comments from the American Academy of Family Physicians and others to change the primary care incentive payment implementation rules to make it more inclusive. As a result, CMS estimates that, under the new, less restrictive rules, about 80 percent of family physicians will qualify for the bonus.
On the downside, the final rule with comment period announces a reduction to payment rates for physicians' services in 2011 under the sustainable growth rate (
The final rule will appear in the Federal Register on Nov. 29, 2010, and CMS will accept comments on certain aspects of it until Jan. 2, 2011.
Looking ahead to the 2011 Medicare physician fee schedule
While the fate of the 2010 Medicare physician fee schedule is temporarily settled, it is time to look ahead to 2011.
On July 13, the Centers for Medicare and Medicaid Services (CMS) published its proposed rule on the 2011 Medicare physician fee schedule in the Federal Register. The proposed rule covers a wide array of topics, including changes in Medicare fees, updates to existing Medicare programs (like the Physician Quality Reporting Initiative and e-prescribing incentive payments), and implementation of some provisions of the Patient Protection and Affordable Care Act.
The bottom-line, good news in the proposed rule is that CMS estimates family physicians will see a 1 percent increase in their Medicare allowed charges in 2011 as a result of changes proposed in the rule, all other things being equal. That is not much, but it is better than the decreases estimated for many other specialties. Of course, any gains could be washed away if Congress and the President do not act to avert the scheduled cut of 21 percent in the Medicare payment rate that will be effective Dec. 1, 2010, under current law.
As in any proposed federal regulation, "the devil is in the details," and I and other AAFP staff are poring over those details in preparing an AAFP response to the proposed rule. I'll share more on those details in a future post.
In the meantime, feel free to peruse the proposed rule yourself and share your comments here.
2010 Medicare physician fee schedule: What next?
When we last left the 2010 Medicare physician fee schedule (see "2010 Medicare physician fee schedule: the saga continues," Jan. 27, 2010), it was headed down the tracks towards a "Bridge Out!!" sign after Feb. 28. For those of you who don't follow this story on a day-to-day basis, here is what's happened in the interim.
As typically happens in this story, Congress tried to avert calamity by passing a stop-gap bill just before Feb. 28, 2010. Unfortunately, Sen. Jim Bunning (R-KY) decided to play Snidely Whiplash in this particular installment and used Senate procedures to prevent Congressional action in advance of the deadline. Consequently, Feb. 28 came and went without Congressional intervention, and the fee schedule dropped on March 1.
Seeking to play Dudley Do-Right in our story, the Centers for Medicare and Medicaid Services (CMS) bravely threw the fee schedule a lifeline and instructed its contractors to hold all Medicare claims with dates of services on or after March 1 for 10 business days to give Congress one more chance. On March 2, Congress and the President took advantage of that lifeline and enacted legislation (H.R. 4691) that extends the 2009 Medicare payment rate through the end of March. This effectively postpones any cut in the 2010 Medicare physician fee schedule until Apr. 1, 2010 – April Fools' Day. (Coincidence or cruel irony? You decide.)
So now, the 2010 Medicare physician fee schedule will float along at the 2009 rate through at least the end of March, at which point it is scheduled to plunge over the falls to a precipitous 21 percent decline. Will CMS once again be called upon to throw the fee schedule a lifeline? Will Congress be able once again to rescue the fee schedule before total disaster strikes? And how many physicians will stick it out (instead of opting out) to see what happens? Stay tuned!