House Votes to Freeze Physician Medicare Payments at 2005 Levels

On February 1, 2006, the House of Representatives narrowly passed legislation (S. 1932) to freeze Medicare physician payments at 2005 levels. The legislation is expected to be signed into law by the president later this week. The legislation averts a scheduled 4.4 percent cut to physician payments. Cuts are still expected in 2007 and subsequent years unless Congress takes additional action in 2006.

The Sustainable Growth Rate (SGR) formula ties Medicare reimbursement to economic performance. However, medical needs of beneficiaries do not decrease when the economy slows, or vice versa. Thus, the SGR does not keep pace with the economy. ASH and other medical societies continue to work together to influence CMS to permanently repair the flawed SGR formula.

In addition to legislation effecting Medicare reimbursement, evaluation and management (E/M) services are valued periodically by the American Medical Association’s Relative Value Update Committee (RUC). The RUC is currently meeting to review E/M codes related to physician work and will submit recommendations to the Centers for Medicare and Medicaid Services (CMS) regarding E/M services. If accepted, changes will be implemented January 1, 2007. ASH continues to participate in the E/M review, with Dr. Samuel Silver representing ASH at the RUC.

Additional information on physician reimbursement will be posted as it becomes available.