CMS Releases Final Payment Rule - 4.5% Cut in Medicare Physician Reimbursement Planned in 2004

On November 7, CMS published the physician fee schedule for 2004 and confirmed that the agency plans to reduce Medicare's physician reimbursements by 4.5 percent next year. The final rule, "Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2004," can be found at www.cms.hhs.gov/physicians/ and is scheduled to take effect on January 1, 2004, unless Congress acts to block the cuts. In a statement accompanying the final rule, CMS Administrator Thomas A. Scully acknowledged that the Medicare reform legislation now pending before Congress contains a provision that would block the proposed cut and boost Medicare physician reimbursements by 1.5 percent in 2004 and 2005. If Congress is able to pass legislation improving payments for physicians, Mr. Scully reported that CMS would implement the new payment rates as quickly as possible.

The planned cut in reimbursement is not unexpected since a proposed rule published last August had said the cut was likely to be 4.2 percent. In 2002, Medicare cut physician payments by 5.4 percent and projected further cuts of as much as 12 percent through 2005, beginning with minus 4.4 percent in 2003. ASH participated in a broad lobbying effort with other physician groups to stem the decline in payments, and as a result, Congress passed a provision to avoid the physician payment cuts and block the projected reduction for 2003.

ASH will provide members with information about any changes to the fee schedule resulting from congressional action.

For more detailed information about the impact of physician fee schedule changes, please see the analysis and chart.