CMS: Medicare reimbursement to decrease by nearly 30 percent in 2012

by Olga Deshchenko, DOTmed News Reporter | March 10, 2011
Medicare physician reimbursement rates will suffer a 29.5 percent cut in 2012, according to a new estimate by the Centers for Medicare and Medicaid Services.

The nearly 30 percent slash to physician reimbursement was outlined in a letter sent Thursday by Jonathan Blum, deputy administrator and director of the agency's Center for Medicare, to Glenn Hackbarth, chairman of the Medicare Payment Advisory Commission.

In the letter, Blum wrote that the "conversion factor" used to calculate physician payments under the current system will be cut by nearly 30 percent in 2012: from $33.98 to $23.94.

The cut is a result of the sustainable growth rate, a mandate which links reimbursement with the gross domestic product. The SGR formula has been hugely unpopular in the medical community since its inception in the late 1990s. The government has been passing "doc fix" legislation to delay the cuts on a yearly basis.

Blum acknowledged the government's efforts to halt the cuts to reimbursement with temporary "doc fix" legislation, but called it a "short-term relief" that requires a concrete resolution. "We will continue to work with Congress to fix this untenable situation so doctors no longer have to worry about the stability and adequacy of their payments from Medicare," he said.

Despite physician opposition to the SGR formula, it's doubtful that the Republicans and Democrats will find agreement on reform any time soon, as health care costs continue to escalate, according to The Hill.

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