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21.2% Pay Cut for Physicians Participating in Medicare

11.10.2009

The Centers for Medicare and Medicaid Services announced on Oct. 30 a 21.2 percent 2010 pay cut for physicians participating in Medicare.

As reported by Healthcare Finance News, J. James Rohack, MD, president of the American Medical Association, said the pay cut is the largest that physicians participating in Medicare have had to face. Access to care and choice of physicians for seniors is at risk unless Congress permanently fixes the payment formula, he said.

“Short-term fixes have grown the problem,” Rohack said. “In four years the cost of a permanent solution ballooned from $49 billion to more than $200 billion and cuts increased from under 5 percent to a whopping 21.2 percent.”

CMS is mandated to adjust the Medicare physician fee schedule annually, based on a formula using the sustainable growth rate adopted in the Balanced Budget Act of 1997. Using the formula, CMS has issued negative updates every year beginning in 2002. Congress has intervened over the past several years to postpone a pay cut.

CMS expects the final rule to be published in the Nov. 25 Federal Register, and the agency will accept comments until Dec. 29.

The House is expected to vote soon on legislation (H.R. 3961) to permanently repeal the current Medicare physician payment formula.