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CMS: SGR cuts 'only' 27.4%

by Brendon Nafziger, DOTmed News Associate Editor | November 02, 2011
The Centers for Medicare and Medicaid Services revised downward a looming cut to physicians, but for the medical community, it will be cold comfort.

In its final 2012 Medicare physician fee schedule with comment period published Tuesday, the agency said doctors should expect a 27.4 percent dock in reimbursements next year, should Congress fail to scrap or freeze reductions mandated by the sustainable growth rate formula. Previously, CMS estimated the cuts would be 29.5 percent.

CMS chief Dr. Donald Berwick bemoaned the cuts, but his hands are tied: CMS said it's required to comply with the law, in this case a budget-tightening act passed in the 1990s that requires Medicare reimbursements to doctors to keep in line with the growth of the economy.

Since SGR was adopted, 11 cuts have been scheduled, and all but those in 2002 averted through congressional action, CMS said.

"This payment rate cut would have dire consequences that should not be allowed to happen," Berwick said in a statement. "We need a permanent SGR fix to solve this problem once and for all."

Abolishing the SGR is expected to cost upward of $300 billion over the next decade. Still, reforms are being suggested, including a controversial one last month by Medicare Payment Advisory Commission.

Better value

The final rule also includes a few other significant changes. One is that it provides guidelines for a new "value-based modifier" that CMS plans to adopt, to adjust physician payments based on the quality of care. Last year's health reform legislation requires CMS to start this program in 2015 for certain practices, and for everyone by 2017. CMS said 2013 will be the first performance year for 2015's payment adjustments.

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