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News of the Day ... In Perspective


CMS rules cut physician pay up to 20%

In rules made public on Nov 1, the Centers for Medicare and Medicaid Services (CMS) announced an average rate cut of 5% in physician Medicare fees.

Cuts will be uneven. While payments for office visits will go up by one-third, nearly half of physicians will face payment cuts ranging from 6% to 20%. For most physicians, the overall cut will negate any increased payment for office visits, according to Cecil B. Wilson, chairman of the AMA board of trustees.

The rules are supposed to “encourage physicians to spend more time with their patients, assessing their health status and educating them about how to live longer, healthier lives,” said CMS administrator Leslie Norwalk.

Hospitals will get a 3% increase in reimbursement rates for outpatient care. But officials say they are concerned about increases in the volume of visits. Beginning in 2009, hospitals will be required to report quality data, and those who don’t will be paid less (Kevin Freking, Associated Press 11/1/06).

The AMA will continue to lobby Congress to reverse the fee cut. It warns that fewer doctors will be willing to take on new Medicare patients. However, at a recent fly-in AMA officials told state medical association staff that the AMA would not be encouraging doctors to opt out of Medicare at this time.

The executive vice president of a state association was asked by a congressman where the money for increased physician’s fees would come from.

“That’s not our concern,” the congressman was told. “It’s your job to find the money.”

At a Sept 25 presentation to the Arizona Medical Association, AMA President-Elect Ronald Davis, M.D., was asked about the Medicare’s $70 trillion in unfunded liabilities. He acknowledged that we would at some time need to address that concern.

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