Overall payments to physicians under the Medicare program are projected to
decrease by an average of 21.5 percent next year unless Congress
The federal Centers for Medicare and Medicaid Services (CMS), which has
jurisdiction over the program, issued its yearly proposed "payment
update" with projected fee changes for every specialty based on its
elaborate formula known as the Resource-Based Relative Value Scale. One
component of that formula—the Sustainable Growth Rate
(SGR)—requires increases in Medicare utilization volume to be
compensated for by decreases in physician payment.
Different specialties will experience increases or decreases, and due to
certain adjustments this year, psychiatry appears to be one of the winners,
with a projected average increase of 3 percent. However, it is important to
note that the estimated 3 percent increase is not for every CPT
code—payment for some psychiatry codes would increase while others would
decrease—but represents an estimate of the total dollars that will be
allocated to the specialty.
Moreover, any increase due to changes in the formula does not take into
account the previously announced 21.5 percent across-the-board reduction
required by the SGR. Additionally, projections are fluid, all the more so this
year due to congressional and Obama administration efforts to pass health
CMS is also proposing to stop payment for consultation codes typically used
by specialists and paid at a higher rate than equivalent evaluation and
management (E&M) codes—a move that would adversely affect
psychiatrists who use those codes. CMS, in a press release, said "the
resulting savings from dropping the consultation codes would be redistributed
to increase payments for the existing E/M services."
This year's projection by CMS is noteworthy for being the steepest proposed
cut yet in what has become a yearly ritual: every summer, the government
issues a proposed rule calling for drastic reductions in doctor pay; this
typically elicits furious opposition from the AMA and other medical
organizations. Then, at the 11th hour of budget negotiations before the
Christmas recess, Congress reverses the proposed cut, thereby putting off for
yet another year the cuts to be made in an ever-ballooning Medicare
This year the dance is expected to be scrambled by whatever Congress and
the administration do—or do not do—with regard to health system
Also noteworthy this year is that several changes have been made that have
elicited some degree of optimism from physician groups amid the general gloom:
the first is that the administration included in the latest formula, data
about physician practice expense increases, garnered from a practice expense
survey conducted by the AMA. Second, the administration decided to remove
physician-administered drugs from its definition of "physician
services" (see Medicare Change Likely to Affect Future Physician
Both moves have encouraged the AMA and other physician groups to believe
that the administration is serious about making real reforms to the way
physicians are paid under Medicare.
In keeping with the White House's determination to move toward widespread
adoption of electronic medical records and quality reporting, the CMS-proposed
rule also contains provisions to promote improvement in quality of care and
patient outcomes through revisions to the Electronic Prescribing Incentive
Program and the Medicare Physician Quality Reporting Initiative.
"Eligible professionals or group practices that meet the requirements
of each program in [calendar year] 2010 will be eligible for incentive
payments for each program equal to 2.0 percent of their total estimated
allowed charges for the reporting periods," according to CMS.
The administration is proposing to simplify the reporting requirements for
the electronic-prescribing measure and to provide eligible professionals with
more reporting options. It is also proposing a new process through which group
practices can be considered successful electronic prescribers.
CMS will accept comments on the proposed rule until August 31 and will
respond to the comments in a final rule to be issued by November 1. Unless
otherwise specified, the new payment rates and policies will apply to services
furnished to Medicare beneficiaries on or after January 1, 2010.