Physicians who wish to change their Medicare participation status for 2007 must do so by December 31. Physicians can change their Medicare status between participating and nonparticipating only during Medicare’s annual open enrollment period. A participating physician must accept Medicare allowed charges as payment in full for all their Medicare patients. A nonparticipating provider can choose to accept or not accept assignment on Medicare claims on a claim-by-claim basis. Once made, Medicare participation decisions are binding for the entire year.

Physicians may also choose to opt out of the Medicare program entirely. Physicians who opt out of Medicare are bound only by their private contracts with their patients (although Medicare specifies that these contracts contain certain terms). You may choose to opt out at any point in the year, but once you opt out, you cannot opt back in for two years.

CMA also encourages physicians to review any of private payor contracts that tie their payment rates to Medicare

As reported last week in CMA Alert, most physicians are facing Medicare payment cuts in 2007, with some California physicians seeing cuts of 14 percent. These cuts are a combined result of the 5 percent sustainable growth rate (SGR) cut and changes in work relative value units (RVUs) stemming from the recently completed five-year review.

The new work values place a stronger emphasis on primary care, with significant increases to the values for evaluation and management (E&M) services, including pre- and postoperative surgical care. The new work values are based on recommendations made by the AMA/Specialty Society RVS Update Committee.

These new work values will increase spending for E&M services by $4 billion next year. However, federal budget neutrality requirements forced CMS to apply a 5.5 percent reduction to all services. As a result, only four specialties will see net increases in 2007: infectious disease (+4%), emergency medicine (+2%), pulmonary disease (+1%), and endocrinology (+1%).

“While significant E&M increases were called for and supported by most specialties, balancing the budget on the backs of physicians is unacceptable,” says CMA president Anmol S. Mahal, M.D. “We need to seek a long-term formula that pays physicians based on actual practice costs.”

Although physicians should continue to aggressively lobby Congress to stop these cuts, it there is no guarantee Congress will act before January 1. 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.” ON-CALL documents are free to members at the members-only website. Nonmembers can purchase ON-CALL documents for $2 per page in the CMA bookstore.

If Congress fails to act during the lame duck session, it may possibly pass legislation in late January as it did last year, to retroactively reverse the cuts. If Congress does act in early 2007, past experience suggests that the provider enrollment period will be reopened to give physicians an opportunity to modify their participation status based on the latest fee schedule.

Click here for a side-by-side comparison of 2006 and 2007 payment rates by CPT code.

Click here for a chart detailing the Combined CY 2007 Total Allowed Charges by specialty.

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