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CMS last week announced plans to reprocess Medicare claims later this year to erase a 4.4% reduction in payments to providers that took effect Jan. 1 if Congress approves a freeze instead of a cut in rates. Congress late last month approved the fiscal year 2006 spending cut package, which contains a provision to freeze provider payments at current rates instead of cutting them by 4.4%. However, in approving the bill, the Senate also made several changes to provisions, forcing the legislation back to the House for approval before it can be signed by President Bush. House members are expected to vote on the measure after they return from the winter break, but CMS was required to go forward with the payment cut as scheduled. In a Jan. 6 letter to House Ways and Means Committee Chair Bill Thomas (R-Calif.) Herb Kuhn, director of the CMS Center for Medicare Management, said CMS will automatically reprocess all provider claims paid at the lower rate once the budget measure is approved. He added, "Physicians and other providers will not need to resubmit their claims." CMS will combine claims, so that each provider receives a single payment to offset the cut. Kuhn noted that reprocessing could take until July 1 because of the expected volume of claims before the budget bill is signed. He said doctors who chose to stop accepting Medicare beneficiaries because of the payment cut will be given a 45-day re-enrollment period in which they can rejoin the program.
The American Medical Association praised CMS' decision but urged Congress to "finish the work it began and stop the cuts immediately upon return to Washington." A lobbyist for AARP expressed concern that Medicare beneficiaries could be asked to pay retroactive copayments to doctors based on the higher payment amount. "It appears from the letter that doctors could waive the additional amount, but it's not clear how many will do that," the lobbyist said.
AAFP Action Alert Don't Want Your Medicare Pay Cut? Tell Congress
By Leslie Champlin
Unhappy about the 4.4 pay cut you're getting from Medicare this month? You can tell your members of Congress through an Action Alert issued Jan. 5 on AAFP's Speak Out Web page.
By going to the page and linking to "Act Immediately to Reverse the Medicare Physician Payment Formula," AAFP members can access a page that includes an urgent key contact message, a sample letter, and a form they can complete and e-mail to their U.S. representatives and senators. The sample letter urges Congress members to act immediately on the Deficit Reduction Act of 2005, S. 1932 (at the Library of Congress' THOMAS Web site, type "S 1932 in the search box after selecting "Bill Number"), which would freeze Medicare payment at 2005 levels, and to jettison the formula on which current Medicare payment is based.
The current payment system "is harmful to Medicare beneficiaries as it jeopardizes the stability of the Medicare system," the sample letter says. "Payment cuts of this magnitude adversely affect access to care for our nation's seniors."
The sample letter points to a 2005 AMA survey in which 38 percent of respondents said they would reduce the number of new Medicare patients they served. "Moreover, an estimated 34 percent of physicians whose practices serve a rural patient population will discontinue rural outreach services," the letter adds.
The Medicare pay reduction resulted from congressional failure to pass the Deficit Reduction Act of 2005, which would set federal budget allocations for 2006. Without passage of the bill, CMS is required to follow the Balanced Budget Act of 1997, which established the sustainable growth rate formula to calculate physician payment. The formula mandates a 4.4 percent pay cut for 2006 and further cuts totaling 26 percent over the next six years.
The AAFP, AMA and their peers in the medical community have repeatedly called for legislation to replace the SGR with the Medicare economic index, which reflects the actual cost of providing medical care. In 2005, the following bills that would rectify the problem were introduced. AAFP has supported all of them, but none has moved out of committee.
Most recently, the Medicare Physician Payment Reform Act of 2005, H.R. 4520, (at the THOMAS site, type "HR 4520" in the search box after selecting "Bill Number") was introduced by Rep. Pete Stark, D-Calif. The bill would provide payment increases of as much as 1.5 percent for both 2006 and 2007 while the Medicare Payment Advisory Commission develops recommendations for replacing the current system.
Rep. Nancy Johnson, R-Conn., introduced the Medicare Value-Based Purchasing for Physicians' Services Act of 2005, H.R. 3617 (at the THOMAS site, type "HR 3617" in the search box after selecting "Bill Number"), on July 29. Like the Stark proposal, Johnson's legislation would replace the SGR formula with the MEI. It also would provide a one-time, 1.5 percent payment increase in 2006 and would tie physician payment to meeting performance measures in 2007.
The Preserving Patient Access to Physicians Act of 2005 was introduced in the Senate as S. 1081 (at the THOMAS site, type "S 1081" in the search box) by Sens. Jon Kyl, R-Ariz., and Debbie Stabenow, D-Mich. The bill's House counterpart, H.R. 2356 (at the THOMAS site, type "HR 2356" in the search box), was introduced by Reps. E. Clay Shaw Jr., R-Fla., and Benjamin Cardin, D-Md.
The proposal would override use of the SGR in the Medicare physician payment formula and increase physician payment by 2.7 percent in 2006. In subsequent years, the increase would reflect physicians' increases in physicians' actual practice costs and inflation, expected to be about 2.6 percent.