Medicare Payment – Now and Beyond

July 18, 2008

A reader on a listserv recently posted the following commentary about the recent passage of the Medicare bill; I couldn’t have said it better myself:

“Why are we so excited to get a 0.5% or 1.1% increase (while other forms of providers are fairing much better in terms of annual increases)? All this means is that our revenues will continue to fall further behind in real (inflation-adjusted) terms. Yet we treat it as a victory. This is absolutely absurd.”

As we all know, the Medicare payment bill reverses the 10.6 percent payment cut that went into effect on July 1 and halts the 5.4 percent cut scheduled for Jan 1, 2009.  But what about year 2010? The following is taken from a letter from the Congressional Budget Office to Rep. Charles Rangel, the Chairman of the House Ways and Means Committee:

The bill would cancel a reduction in Medicare’s physician fees scheduled to occur under current law on July 1, 2008. The bill would freeze those payments at their current levels for the remainder of the year and increase them by 1.1 percent in January 2009. Future payments beyond 2009 would revert to the levels under current law, necessitating a 21 percent reduction in payments under the physician fee schedule in 2010 [Emphasis Added].

My point – start making concrete plans NOW on how you, as a physician practice, is going to address declining reimbursement, higher inflationary costs, and the dual impact of each on physician compensation.

As the old saying goes: “People don’t plan to fail……….they just fail to plan.”

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