Congress Reverses Physician Payment Cuts

Congress reverses physician payment cuts by passing the "Tax Relief and Health Care Act of 2006." This legislation averted the scheduled 5 percent Medicare physician payment cut for 2007. View national payment rate charts for some E/M services, hematology-oncology services, and high-volume services of interest to ASH members. Highlights of the bill follow.

2007 Physician Reimbursement Frozen at 2006 Rate
The scheduled 5 percent cut in 2007 Medicare physician payment rates is prevented by freezing the Medicare conversion factor at the 2006 rate of $37.8975. The bill does not change the payment rates beyond 2007; therefore, physicians potentially face a cut of more than 5 percent in 2008.

Geographic Practice Cost Index (GPCI) Payment Reduction Postponed
The geographic practice cost index (GPCI) floor is extended for one year, averting proposed payment reductions in 53 states and localities where the geographic adjustment was about to expire.

Pay-for-Performance (P4P) Program Authorized
The bill authorizes a voluntary pay-for-performance program for July 1, 2007 - December 31, 2007. The program will utilize the quality measures currently recognized by Medicare and will allow for some additional measures that will be approved early next year. A bonus payment of 1.5 percent will be paid to physicians who report at least three quality measures. How this bonus payment will work and how CMS will handle physician specialties that do not have approved measures is very unclear. Updated information will be provided as additional details become available.

Medicare Quality Reporting Program Authorized for 2008
Under the program, physicians would report measures that have been adopted or endorsed by the National Quality Forum and would include structural measures such as the use of electronic health records and/or electronic prescribing technologies. In 2008, $1.35 billion is made available for physician payment and quality initiatives, which could include an update in the adjustment to the conversion factor.

Reporting Anemia Quality Indicators
The bill requires that physicians submitting claims for drugs furnished to a patient to treat anemia as part of treatment for cancer provide information on the hemoglobin or hematocrit levels of that patient. This provision takes effect for drugs furnished on and after January 1, 2008.