WASHINGTON, DC—The Centers for Medicare & Medicaid Services (CMS) has announced final changes to policies and payment rates for 2010 that will result in overall cuts in physician fees of 21.5%—and the pain is not distributed evenly. Among the “winners” with increases are chiropractors, physical therapists, plastic surgeons, and internists. Among the losers: rheumatologists.

A prior legislative attempt to impose fiscal discipline on Medicare was included in the Balanced Budget Act of 1997. This requires CMS to adjust the MPFS payment rates annually based on an update formula which requires application of the Sustainable Growth Rate (SGR), a formula that has demanded physician fee cuts (“negative updates” in CMS jargon) every year since 2002. Since 2004 Congress has prevented application of these cuts by a series of legislative slights-of-hand.

This year, however, the over 2000-page health reform legislation will add enormous costs to the system, and one of the few definite suggestions for how to pay for it is to shift money from the Medicare program.

“In the absence of Congressional action for the CY 2010 physician update, the final rule with comment period will reduce the conversion factor for services on or after Jan. 1, 2010 by 21.2 percent rather than the -21.5 percent projected in the proposed rule. The difference is due to the use of the most recently available data on CMS spending for physicians’ services,” according to a CMS press release.

“The Administration tried to avert the pending fee schedule cut in the FY 2010 budget proposal that it submitted to Congress, and remains committed to repealing the SGR,” said Jonathan Blum, director of the CMS Center for Medicare Management. “In the meantime, CMS is finalizing its proposal to remove physician-administered drugs from the definition of ‘physicians’ services’ for purposes of computing the physician fee schedule update. While this decision will not affect payments for services during CY 2010, CMS projects it will have a positive effect on future payment updates.”

Not counting physician-administered as a “physician service” is likely to particularly affect rheumatologists and medical oncologists.

Meanwhile, CMS projects that payments to general practitioners, family physicians, internists, and geriatric specialists will increase by 5-8 percent. The final rule also adds categories for cardiac and pulmonary rehabilitation services and for chronic kidney disease (CKD) education, increases payments for outpatient mental health services to 55 percent from 50 percent, and adds a requirement that suppliers of the technical component of advanced imaging services be accredited beginning Jan. 1, 2012.

The accreditation requirement will apply to mobile units, physicians’ offices, and independent diagnostic testing facilities that create the images, but will not apply to the physician who interprets them.

The final rule with comment will appear in the Nov. 25, 2009 Federal Register. CMS will accept comments on designated provisions of the final rule with comment period until Dec. 29, 2009, and will respond to all comments at a later date. Unless otherwise specified, the new payment rates and policies will apply to services furnished to Medicare beneficiaries on or after Jan. 1, 2010.

Reference

1. To view a copy of the final rule with comment period, please see: http://www.federalregister.gov/OFRUpload/OFRData/2009-26502_PI.pdf