President Bush Signs Legislation that Freezes Physician Medicare Payments at 2005 Levels

February 24, 2006 – President Bush signed legislation that finalized the freeze on Medicare reimbursement to physicians at 2005 levels, rather than the scheduled 4.4 percent reduction. ASH and other medical specialty organizations lobbied Congress to prevent the mandated cuts.

Unfortunately, another decrease is expected for 2007. The Sustainable Growth Rate (SGR) formula ties Medicare reimbursement to economic performance and remains part of the calculations for the annual Medicare update. In the absence of replacing the SGR, the most likely alternative to preventing Medicare reimbursement cuts in 2007 and following years will be by Congress stepping in with legislative changes.

Following the signing of the legislation, CMS agreed to reopen the 45-day period in which physicians could change their 2006 Medicare participation status. Changes were retroactive to January 1. Additionally, CMS is automatically reprocessing claims retroactive to January 1, 2006.