July 2007 Practice Update (part one)

The Centers for Medicare and Medicaid Services (CMS) Releases 2008 Proposed Medicare Physician Fee Schedule: Physicians Face Significant Payment Cuts Unless Congress Acts

July 2, 2007 – CMS has posted its Proposed 2008 Medicare Physician Fee Schedule Rule (CMS-1385-P). The proposed rule officially will be published in the Federal Register on July 12, 2007.

CMS has proposed reducing physician payments by 9.9 percent in 2008. ASH is very involved in working with Congress to avert these drastic cuts. For the past five years, estimated cuts to the Medicare physician payment rate have been temporarily avoided through legislation. Currently, congressional committees in the U.S. House of Representatives are working on legislation to address Medicare physician payment that they hope to have voted on by the end of July. However, even with congressional action the best scenarios would be a .5 percent increase or a freeze in the 2007 conversion factor in 2008.

Similar to 2007, changes in the 2008 payment rates are once again impacted by a budget neutrality (BN) adjustment to physician work relative value units (RVUs), which decreases work RVUs by just over 10 percent in 2008. Additionally, CMS is continuing to phase-in a new methodology to capture practice expense costs. This new system has had a mixed impact on services commonly performed by hematologists.

The Estimated 2008 Payment Rates chart summarizes three potential scenarios for 2008 Medicare payment rates for commonly performed services by hematologists. Scenario A reflects the -10 percent reduction in the conversion factor included in the rule, assuming no congressional action. Scenarios B and C reflect a 0 percent and .5 percent update in the conversion factor, respectively, and are currently being considered by Congress.

Comments on the proposed rule are due August 31, 2007, and a final rule will be published later in the fall. The final rule will be effective for services on or after January 1, 2008. In the meantime, ASH will further analyze the rule and provide members with more details. ASH members are also strongly encouraged to join ASH's on-line advocacy campaign to prevent the physician payment cuts. Through ASH's Advocacy Center, physicians can quickly and easily contact their Members of Congress to urge a positive physician update.

Learn more about ASH's recommendations on policy recommendation to change Medicare physician reimbursement.

If you have questions or need additional information, please feel free to contact the ASH Government Relations and Practice Department at grassroots@hematology.org or 202-776-0544.