Medicare Payments to Physicians Will Decrease 5% in 2007
Medicare payments to physicians will decrease an average of 5% in 2007, according to a final version of CMS rules made public on Wednesday, the AP/Seattle Post-Intelligencer reports (Freking, AP/Seattle Post-Intelligencer, 11/2). CMS in the draft version of the rules had projected a 5.1% reduction (Reichard, CQ HealthBeat, 11/1).
Under the final version, payments to physicians will be cut by more than 5% for some services and by less than 5% for others (AP/Seattle Post-Intelligencer, 11/2).
Acting CMS Deputy Administrator Herb Kuhn said payments will increase for most "evaluation and management" services, such as preventive care (Reichard, CQ HealthBeat, 11/1).
For example, payments will increase by one-third for office visits, the most frequently billed physician service.
The American Medical Association -- which has lobbied Congress to intervene to stop the cuts -- said almost half of physicians will face payments cuts from 6% to 20%(AP/Seattle Post-Intelligencer, 11/2).
The new payment rates are scheduled to take effect Jan. 1, 2007 (California Healthline, 9/8). The payment reduction is based on a formula that offsets increases in the volume of care provided to Medicare beneficiaries by physicians. Congress since 2003 has intervened to stop scheduled cuts (AP/Seattle Post-Intelligencer, 11/2).
The final rules also included changes for Medicare payments to hospitals. CMS said it will delay until 2009 changes that would require hospitals to report quality-of-care data to Medicare in order to receive increased payments for outpatient care.
The delay will allow hospitals and CMS to reach an agreement on which quality-of-care measures should be reported for outpatient care, the agency said (Reichard, CQ HealthBeat, 11/1).
In the meantime, Medicare payments for outpatient hospital care will increase 3% for 2007, CMS said (AP/Seattle Post-Intelligencer, 11/2).
In addition, CMS said it will implement three rule changes for imaging services, including a provision that will reduce by 25% payments for more than one imaging procedure performed on contiguous body parts during the same session. The others would limit payments for technical services related to conducting imaging and revise payments to account for physician practice expenses.
CMS also announced additional inpatient quality measures on which hospitals must report to receive the highest level of payment increases in 2007. The expanded reporting requirements call for hospitals to report data on beneficiaries' satisfaction with inpatient care.
Hospitals also will be required to report data on outcomes of care -- such as death rates with 30 days of hospitalization for heart attack or rates of complication from surgery -- in order to receive higher payments.
In addition, CMS said it will reduce payment rates for about 280 procedures performed at ambulatory service centers but would add 19 procedures to the list of services Medicare covers at the centers (Reichard, CQ HealthBeat, 11/1).
CMS said it would increase Medicare payments to home health care providers by an average of 3.3% in 2007 (AP/Seattle Post-Intelligencer, 11/2). Rural home health care providers that report quality-of-care data will receive average payment increases of 3.6%, while urban home health providers will receive average increases of 3.3%. Providers that do not report data will receive 1.3% increases.
In addition, CMS said it will begin reporting 10 quality measures on home health through its Home Health Compare Web site.
The agency also said it would implement a rule in the budget reconciliation law that requires medical equipment suppliers to transfer the titles for oxygen equipment to the beneficiary after 36 months of rental payments or after 13 months for equipment with capped rental agreements. CMS said that once the title is transferred to the beneficiary, Medicare will continue to pay for certain services, such as the cost of the oxygen and certain equipment maintenance and repairs (Carey, CQ HealthBeat, 11/1).