It is the time of year again when physicians must make decisions about their Medicare participation. Physicians who wish to change their participation status for 2008 must do so by December 31.
As you know, the Centers for Medicare & Medicaid Services (CMS) announced last month that physician payments will be cut by 10 percent on January 1. While CMA, AMA, and others in organized medicine continue to lead an aggressive campaign to pass legislation that would prevent the cut, there is no guarantee that Congress will act before the January 1 deadline.
The U.S. House of Representatives passed a bill in July that would stop the 10 percent SGR cut in 2008 and the 5 percent cut in 2009, replacing them instead with .5 percent increases in each of those years. That legislation would also update California’s geographic payment localities in 2008 and prevent any geographic payment reductions for three years. The bill provides an unprecedented $22 billion in payment fixes for physicians, without mortgaging this debt into future years.
The U.S. Senate, however, has yet to act on the Medicare physician payment issues. The Senate Finance Committee has indicated that it may pass a Medicare bill as early as next week. Once it does so, the House and Senate Medicare packages will be reconciled by a joint House/Senate conference committee. CMA will notify members as soon as the final outcome is known.
Your Participation Options
Physicians have three choices regarding Medicare: be a participating provider; be a nonparticipating provider; or opt out of Medicare entirely.
A participating physician must accept Medicare allowed charges as payment in full for all Medicare patients.
A nonparticipating provider can choose to accept or not accept assignment on Medicare claims on a claim-by-claim basis. Nonparticipating physician fees are 95 percent of participating physician fees. If you choose not to accept assignment, you can charge the patient 9.25 percent more than the amounts allowed in the participating physician fee schedule.
Physicians who opt out of Medicare are bound only by their private contracts with their patients. Medicare’s limiting charges do not apply to these contracts, but Medicare does specify that these contracts contain certain terms. When a physician enters into a private contract with a Medicare beneficiary, both the physician and patient agree not to bill Medicare for services provided under the contract. Once you opt out, you cannot opt back in for two years.
Economic Impact of the Cuts
CMA is urging physicians to assess the impact the potential Medicare payment cuts will have on their practices. It is important that physicians understand how these cuts will affect their bottom line so that they can make informed decisions about Medicare participation for 2008.
Determine Your Payor Mix: The first step is to complete an internal analysis of your payors to determine your Medicare claim volume. Use CMA’s “Utilization by Payor Class” worksheet.
Identify Your Top 20 CPT Codes: Next, calculate the financial impact the Medicare payment changes will have on your practice, based on your 20 most commonly billed CPT codes. Use CMA’s “Financial Impact” worksheet.
Calculate Change in Practice Costs: These latest Medicare rate cuts come at a time when medical practice costs are soaring. Over the last five years, the average cost to run a medical practice has gone up at least 18 percent. Use CMA’s “Cost Analysis” worksheet to determine anticipated increases to your practice costs for 2008.
For more information on your participation options, see 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.
