2007 Increase in Medicare Rates Might Be Short-Lived
Laura Loeb, JD
King & Spalding, LLP
Washington, D.C.
Because of the hard work of Society of Critical Care Medicine and other physician specialty societies representing practitioners who provide critical care, the payment amounts for the evaluation and management codes used by intensivists increased in 2007 as part of the Centers for Medicare and Medicaid Services (CMS) five-year review of work values. However, a 10% reduction in the 2008 Medicare conversion factor for all physician services is forecasted, and the Medicare Board of Trustees predict cuts of nearly 40% in physician fees over the next eight years.
These projected decreases are caused by the current formula that CMS must use to calculate Medicare physician fees from year to year. The formula is widely accepted as flawed. The American Medical Association (AMA) has provided CMS with several policy options for the 2008 Medicare payment schedule that would help avert payment cuts driven by the current Sustainable Growth Rate (SGR) formula and lessen the cost for Congress to address the SGR. The AMA has asserted that these projected cuts will make it impossible for most medical practices to continue accepting new Medicare patients as they prepare for the influx of baby boomers.
Because CMS counts spending on drugs covered by Medicare Part B and coverage of new benefits in its calculations of actual spending under the SGR, the gap between the SGR targets and actual spending has gotten increasingly wider. Drug spending grows much more rapidly than spending on physician/professional service and this is a significant factor in the forecasted pay cuts over the next eight years. The AMA asserts that it was a CMS decision to count drugs and new coverage benefits as part of actual spending under the SGR and that CMS has the authority to remove these costs from those calculations retroactive to the SGR base year and for every year thereafter.
The Society and other physician specialty groups are working with the AMA to pass legislation this year to avert the projected cuts that will go into effect on January 1, 2008. Check the Public Health and Policy section of www.sccm.org for updates on this issue.
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