In mid-December, 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, the Senate passed an amended budget package that had to go back to the House for final approval. Unfortunately, by that time almost all members of the House had left Washington for the holidays and House Republican leaders declined to take action on the Medicare physician payment issue. Because Congress did not complete its work, the Centers for Medicare and Medicaid Services (CMS) were obligated by law to implement the scheduled 4.4 percent rate cut on January 1.

CMA and AMA are working vigorously to get Congress to pass the payment freeze that was agreed to in December. In the meantime, physicians should submit to Medicare claims for billed charges, rather than billing at 2005 or 2006 fee schedule rates. Physicians will be paid by NHIC, California’s Medicare carrier, at the reduced 2006 rates until Congress returns and passes legislation reimplementing the higher 2005 payment levels. NHIC will then make appropriate payment adjustments, including possible positive retroactive payments if authorized by the legislation. (It is yet to be determined how these retroactive payments would be disbursed.) Only physicians who submit claims for billed charges will be eligible for these retroactive payments. Physicians who bill at the lower 2006 fee schedule will not receive retroactive payment increases if indeed Congress returns physician payments to the higher 2005 levels.

Although the 2006 Medicare participation enrollment period is over, CMS has also indicated that it will allow physicians to change their participation status once Congress has taken action on the physician payment issue.

Stopping the Medicare payment cuts is CMA’s top priority right now and we are aggressively working to get Congress to act as soon as possible.

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.

Contact: Elizabeth McNeil, 415/882-3376 or emcneil@cmanet.org.