An 11th-hour intervention by Congress averted a scheduled 5 percent
across-the-board reduction in reimbursement for physicians and other health
care professionals participating in the Medicare program in 2007. However,
many physicians, including psychiatrists, will still see a decline in their
2007 reimbursement because of other government adjustments to the fee
On the last day of the session before adjourning for the Christmas recess,
Congress approved HR 6111, the Tax Relief and Health Care Act of 2006, which
includes a provision eliminating the 5 percent overall payment reduction that
was to take effect January 1 as part of an annual update issued by the federal
Centers for Medicare and Medicaid (CMS). That update stemmed from a change to
the "conversion factor" that is used in the formula to determine
physician fees and is adjusted from year to year to maintain budget
The bill, which at press time was expected to be signed by President Bush,
also includes a 1.5 percent "bonus payment" to physicians who
voluntarily report certain quality data as part of a CMS pilot program. The
1.5 percent bonus is effective from July 1 to December 31, 2007.
Left unaffected by the Congressional action is a separate adjustment to
so-called work and practice expense relative value units (RVUs). That
adjustment, the result of a recent five-year review of RVUs, is expected to
decrease psychiatrists' payment under the Medicare program by 2 percent on
average. On top of the 5 percent adjustment to the conversion factor, payment
for psychiatrists had been expected to drop on average by 7 percent next year
(Psychiatric News, December 15, 2006).
Now, because of the Congressional action, payment for psychiatrists will
drop on average by just 2 percent. Many other specialties will be experiencing
greater cuts in payment even after the action by Congress.
(The work and practice expense RVUs are components of the Resource-Based
Relative Value Scale, the elaborate formula used to calculate physician
payment under the Medicare program; another component is the malpractice
insurance expense RVU. To derive a payment rate for each CPT code,
the three components are added together and multiplied by the conversion
HR 6111 states that the measures to be used for quality reporting are those
formulated for the CMS Physician Voluntary Reporting Program. Among them are
measures for reporting use of antidepressant medication for a new episode of
APA and AMA welcomed the congressional action, while vowing to continue
advocating for a reform of what AMA has persistently called a"
flawed" Medicare physician payment formula.
Nicholas Meyers, director of APA's Department of Government Relations,
said, "APA joins the AMA and all of medicine in thanking the members of
the 109th Congress for their success in blocking a damaging
Medicare cut," he said. "The action amounts to a significant
payment shift in favor of psychiatrists and other physicians."
Meyers added, however, that "this is not a permanent correction to
the underlying flawed payment formula. We will continue our work with the AMA
to fix the formula once and for all so our members don't have to worry about
the payment fight every year."
In a statement released after passage of the bill, AMA Board Chair Cecil
Wilson, M.D., said, "Congressional action to avert next year's 5 percent
Medicare physician payment cut will help avert a potential sharp decline in
access for America's seniors."
With respect to quality reporting, Wilson noted that the AMA Physician
Consortium for Performance Improvement, which includes representation from
APA, has already developed 151 quality measures.
"We will work to ensure that consortium measures continue to form the
foundation of a Medicare quality reporting program," Wilson said."
We will work closely with the incoming Congress to address concerns
with the current reporting framework."
The text of the Tax Relief and Health Care Act of 2006 is posted at<http://thomas.loc.gov/home/c109query.html>.▪