Last week, the U.S. House of Representatives passed a federal budget package that would have stopped the 4.4 percent Medicare cut and frozen physician payments at 2005 rates.

However, last Wednesday, the Senate passed an ammended budget package that had to go back to the House for final approval. Unfortunately, most members of the House had gone back to their home districts for the holidays and House leaders were unable to take action on the Medicare physician payment issue before January 1. Because Congress did not complete its work, the Centers for Medicare and Medicaid Services (CMS) are obligated by law to implement the scheduled 4.4 percent rate cut on January 1.

CMA and AMA will be aggressively pushing Congress to act as soon as possible to stop the 2006 payment cuts and institute the freeze as proposed in the budget reconciliation bill. We will also be strongly urging that the payment adjustment be retroactive to January 1 so that physicians do not experience a rate cut.

At this time, the House is scheduled to return on January 31, and the Senate is set to reconvene on January 18. These dates may change since Congress has numerous urgent issues to address, including the physician payment issue.

End-of-Year Politics
Hoping to get the budget passed and to President Bush for his signature by January 1, House Speaker Dennis Hastert (R-IL) convened a pro forma session late last week. (A pro forma session only requires a few members from both parties to be present.) House Democratic Leader Nancy Pelosi (D-CA) objected to Speaker Hastert’s request to pass the Senate-amended version of the budget in pro forma session. Rep. Pelosi believes that there are many controversial items in the amended package, including Medicaid program cuts, that need to be fully debated by the entire House.

Rep. Pelosi offered to allow a few urgent and uncontroversial items to be moved by unanimous consent on a voice vote, including the Medicare physician payment freeze. However, Speaker Hastert rejected Rep. Pelosi’s counteroffer and the House adjourned. Many Republican leaders believe that acting on the Medicare physician payment freeze and other less contentious budget provisions separately from the rest of the package would make it harder for Republicans to advance other more controversial budget provisions when Congress reconvenes in January.

CMA is extremely frustrated that the physician payment issues were caught up in end-of-the-year politics. We will be pursuing action on this issue as well as an overall fix to the flawed Medicare sustainable growth rate (SGR) geographic payment (GPCI) formulas in the coming year. CMA will also be working with the county medical societies and physicians across the state to schedule meetings with their members of Congress when they are home in their districts during January.

Physicians with Democratic members should thank them for their support of the physician payment issues and for agreeing to allow the physician payment cuts to be stopped in the pro forma session. Physicians with Republican members should also thank them for their support but express extreme disappointment that the Republican leadership did not stop the cuts in the pro forma session. All physicians should urge their Republican members to act as soon as possible to avert the cuts and to make the rate freeze retroactive.

Medicare Participation Options
Recognizing that Congress’s failure to stop the Medicare rate cut may affect physicians’ Medicare participation decisions, CMA encourages physicians to read CMA ON-CALL document #0151, “Medicare Participation (and Nonparticipation) Options” so that they can make informed decisions about their contractual relationships with Medicare.

Physicians who wish to change their Medicare participation status for 2006 must do so by December 31. Physicians can change their Medicare status between participating and nonparticipating only during Medicare’s annual open enrollment period. Once made, Medicare participation decisions are binding for the entire year.

ON-CALL documents are free to members at CMA's members-only website. Nonmembers can purchase ON-CALL documents for $2 per page in CMA's online bookstore.