The Centers for Medicare
& Medicaid Services (CMS)
The Centers for Medicare & Medicaid Services (CMS) announced today proposed changes to policies and payment rates for services to be furnished during calendar year (CY 2010) by over 1 million physicians and nonphysician practitioners who are paid under the Medicare Physician Fee Schedule (MPFS). The MPFS sets payment rates for more than 7,000 types of services in physician offices, hospitals, and other settings.
CMS is making several proposals to refine Medicare payments to physicians, which are expected to increase payment rates for primary care services. The proposals include an update to the practice expense component of physician fees. For 2010, CMS is proposing to include data about physicians' practice costs from a new survey, the Physician Practice Information Survey (PPIS), designed and conducted by the American Medical Association.
The Medicare law requires CMS to adjust the MPFS payment rates annually based on an update formula which includes application of the Sustainable Growth Rate or SGR that was adopted in the Balanced Budget Act of 1997. This formula has yielded negative updates every year beginning in CY 2002, although CMS was able to take administrative steps to avert a reduction in CY 2003, and Congress has taken a series of legislative actions to prevent reductions in CYs 2004-2009. Based on current data, CMS is projecting a rate reduction of -21.5 percent for CY 2010.
As part of health care reform, the Administration supports comprehensive, but fiscally responsible, reforms to the physician payment formula. Consistent with this goal, the Administration announced in the FY 2010 President's Budget that it would explore the breadth of options available under current authority to facilitate such reforms, including an assessment of whether the cost of physician-administered drugs should continue to be included in the payment formula. Thus, while working with Congress to develop a more appropriate mechanism for updating physician payment rates, CMS is proposing to remove physician-administered drugs from the definition of "physician services" for purposes of computing the physician update formula in anticipation of enactment of legislation to provide fundamental reforms to Medicare physician payments. While the proposal will not change the projected update for services during CY 2010, CMS projects that it would reduce the number of years in which physicians are projected to experience a negative update.
