When Congress returns for its lame-duck session on November 15, rheumatologists are hoping that legislators will eliminate a proposed 23% cut in Medicare reimbursement to physicians scheduled to go into effect December 1, and revise the Medicare payment methodology to ensure appropriate physician payments in the future. In spite of huge lobbying efforts by physician societies, it’s still not certain what Congress will do. If the cuts go through, however, it could lead to numerous rheumatologists opting out of Medicare.
Explore this issueNovember 2010
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It all goes back to 1997 when the Sustainable Growth Rate (SGR) was established by Congress as a target rate of growth in Medicare Part B spending for physician services. If spending exceeds SGR targets – which it has since 2002 – then physician payment is supposed to be cut.
Linked to performance of the overall economy, the SGR target was set with 1996 spending as the base year with each year’s payment determined by comparing cumulative actual expenditures to cumulative target expenditures in the prior year. In early years, volume growth was below per-capita GDP, so payments were at or above the Medicare Economic Index. Since 2002, volume growth has increased and GDP slowed, with SGR calling for rate cuts that by 2010 total 21%. However, since 2003 Congress has repeatedly passed temporary fixes to prevent severe cuts.
“We get more and more in debt with this formula,” says Susan Hoch, MD, a rheumatologist at the University of Pennsylvania in Philadelphia who has been active in ACR advocacy. “It’s not clear that this formula is even a viable mechanism. The problem is it gets hung up in politics and no one has the political will to set a target on what we spend on physician services. To reform the SGR completely, you need bipartisanship, which isn’t likely on the horizon.”
And 2010 was a particularly rocky year. Medicare payments at the 2009 level were extended through May in various legislative efforts. Then, in late June, a new law rescinded the 21% payment cut and provided a 2.2% increase in Medicare payments through November 30, 2010.
This brings us to the lame-duck Congress that must address this issue. If the 21% cut is applied and the 2.2% increase eliminated, rheumatologists will see a little more than 23% cut in reimbursement. Meanwhile, the ACR, AMA, and others have urged Congress, at a minimum, to pass a 13-month extension prior to November 30, 2010.
If the payment cuts go through, rheumatologists who currently accept Medicare assignment have three contractual options:
- Remain a Medicare participating physician at the lower payment rates.
- Choose to be a nonparticipating physician, seeing Medicare patients on a case-by-case basis. These physicians agree to accept 5% less than participating physicians, but they can bill patients for up to 15% more (a limiting charge) than the Medicare allowance.
- Opt out and become a private contracting physician, billing patients directly. (Read “Opting Out of Medicare“ for guidelines on the opt-out process.)
Already, rheumatologists and other specialists have grappled with the loss of consultation fees since January 1, 2010. How will they react now if the payment cuts go through?