Congress freezes Medicare reimbursements for 2006

March 15, 2006

Physician advocates argue that a problematic formula (SGR) is being used to calculate the Medicare budget, and the AAO is . . . calling for its repeal.

Washington, DC-A last-ditch vote by the House of Representatives has staved off-for 1 year-anticipated cuts in the Medicare reimbursement paid to physicians.

In one of the first votes of its new session, the House on Feb. 1 approved an amended Budget Reconciliation Agreement, which hung in the balance over the break until Congress resumed its session. An effort launched in the waning hours before Christmas stalled when the Senate changed non-related portions of the bill, forcing a new vote by the House, said Catherine Cohen, the American Academy of Ophthalmology (AAO) vice president, governmental affairs.

However, legislators ran out of time to take that vote before the 5-week break began, which meant ophthalmologists started 2006 expecting to take a 4.4% pay cut on the payments provided by Medicare.

Pay-for-performance measures, proposed by Congress and the Centers for Medicare and Medicaid Services (CMS) as a way to ensure quality and efficiency, were dropped from the final bill.

The good news for ophthalmologists is CMS quickly arranged to pay doctors the higher rate automatically without them needing to resubmit those claims. CMS also has pledged that all physicians will be repaid at the correct rate in a lump sum by July 1.

It also has said that beneficiaries are not responsible for paying the difference for the higher co-pay (20% of the visit cost) for visits made between Jan. 1 and Feb. 8, Cohen said. That announcement saves practices from sending bills to patients to collect an additional dollar or two, and confusing patients, she explained.

"This is an administrative nightmare," Cohen said. But, she added, "They have responded to our pleas to do this in the least-burdensome way to physicians."

CMS also is offering a second enrollment period to allow physicians to reconsider their participation in Medicare in light of the reimbursement freeze, said Nancey McCann, the American Society of Cataract and Refractive Surgery's (ASCRS) director of government relations.

The bad news is that lobbyists must renew their efforts to preserve and improve reimbursements for next year. Cohen said that work has already begun, and 2007 looks "extremely challenging."

"Nobody's going to get cut (this year), but keep in mind that . . . this is not acceptable," she said. "Our doctors have (to pay) cost of living, they have to give their staffs a raise, they have rent situations. There's no way we can call this a win. We're ready to fight for the next round."

In an effort to keep Medicare costs in line, Congress cut the reimbursement rate in 2002 by 5.4%, but physician lobbyists argued that cutting these payments would limit the number of physicians willing to accept Medicare patients, according to the Center for Studying Health System Change, a nonpartisan policy research organization based in Washington, DC. Congress subsequently allowed increases of 1.6% for 2003, and 1.5% in 2004 and 2005.

Physician advocates argue that a problematic formula-called the Sustainable Growth Rate (SGR)-is being used to calculate the Medicare budget, and the AAO is among numerous medical groups calling for its repeal. Use of the SGR is predicted to cut physician payments more than 20% over the next 8 years, Cohen said.

"Doctors certainly don't deserve that cut," she said.

Medicare reform-specifically the SGR problem and pay-for-performance issues-is ASCRS' biggest priority, said McCann, who serves as chairman of the Medicare committee of the Alliance of Specialty Medicine, a nonpartisan group of 12 specialty medicine societies. Medicare will be the focus of the ASCRS annual meeting in March.