Medicare Fees May Decrease Again in 2008 Unless Congress Acts

As those of you who see Medicare patients are well aware, in 2007 Medicare fees for psychiatry codes fell an average of about 7 percent. This occurred despite the fact that Congress voted to use the 2006 conversion factor to calculate Medicare fees.

Unfortunately, the Medicare program must maintain “budget neutrality,” and since payments for more than 300 procedure codes (including the frequently used evaluation and management [E/M] codes) increased for 2007 following the mandated five-year review of work values by the AMA/Specialty Society Relative Value Update Committee (RUC), CMS determined that a corresponding decrease in the work values for all CPT codes was required to compensate for this.

For 2008 the RUC has called for an average 32 percent boost in the payments for anesthesiology codes, as well as for increases in some other codes. To compensate, for the 2008 fee schedule CMS has proposed to increase the negative budget adjuster for work values from last year's 10.1 percent to 11.8 percent. This means there will be a drop in work values across the board of 1.7 percent.

APA, along with the AMA and other medical specialty societies, has been lobbying Congress long and hard to stanch the decline in Medicare physician fees. All groups advocate spreading any budget-neutrality adjustment across all relative value units instead of just making an adjustment to the work values. This is especially important for psychiatry, since work values for psychiatry codes account for as much as 75 percent of the codes' values.

The recently passed bill by the House of Representatives to reauthorize the State Children's Health Insurance Program includes a provision for a slight increase in Medicare physician fees, but the Senate version does not.

As it stands now, even if Congress acts to eliminate the overall 9.9 percent cut to the fee-schedule conversion factor that is mandated by the law (as it has done for the past several years), there will still be a decrease in fees created by the change in work values that was necessitated by the increase in value of the anesthesiology and other codes. ▪