Congress Postpones Medicare Payment Cuts for Six Months
[Posted 12/20/07]

This week Congress passed a Medicare bill that postpones the 10 percent physician payment cut and instead provides a 0.5 percent increase for six months. The bill also extends the current State Children’s Health Insurance Program through March 2009. It does not, however, fix California’s geographic payment problems. The President is expected to sign it immediately.

But the reprieve is brief. Physicians are still faced with a 10 percent payment reduction on July 1, unless Congress revamps the hopelessly broken formula used to calculate physician pay (or acts again with another last-minute fix).

“Although CMA is relieved that Congress acted to stop the 10 percent physician payment cut, the association is extremely frustrated that Congress has been unable to fix the underlying problems, leaving physicians facing significant payment cuts in future years,” says CMA President Richard S. Frankenstein, M.D. CMA is also disappointed that the bill did not include a geographic payment fix for California.

Even though the Senate failed to pass a comprehensive Medicare payment reform bill, physicians gained a lot of important ground with the House-approved CHAMP Act. That bill, passed by the House in July, contained many physician-friendly provisions. It would have stopped the 10 percent SGR cut in 2008 and the 5 percent cut in 2009, replacing them instead with 0.5 percent increases in each of those years. It would also have updated California’s geographic payment localities and prevented any geographic payment reductions for three years.

CMA will continue to fight aggressively for physicians and patients by building on these advances. We will not relent until Congress reaches a long-term agreement to overhaul the physician payment system. Physicians cannot continue to practice in such an unstable environment, waiting year after year for Congress to act at the last minute to reverse such devastating cuts.

In addition to the provisions detailed above, the bill also:

• Continues the 1.5 percent bonus payment for physicians who
  particpate in the voluntary quality-reporting system.
• Extends the 5 percent bonus for physicians practicing in federally-designated health professional shortage areas.
• Does NOT cut reimbursement for outpatient imaging services.
• Does NOT include a ban on physician-owned specialty hospitals.

Click here for a summary of the bill's major provisions.

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