Medicare Cuts Delayed
Physicians will face a payment reduction in Part B payments in July 2008 unless Congress once again intervenes. Besides temporarily averting the cut, the Medicare, Medicaid and SCHIP Extension Act of 2007:
- Extends the SCHIP at current funding through March 31, 2009;
- Continues the Physician Quality Reporting Initiative for all of 2008 (successful participants will still earn a bonus payment of 1.5 percent of all covered professional services provided during the reporting period);
- Extends the 5 percent bonus payment to physician shortage areas through June 30;
- Extends the geographic practice cost index floor of 1.0 through June 30;
- Extends a provision in the Balanced Budget Act of 1997 that allows independent laboratories to bill Medicare directly for the technical component of certain pathology services provided to hospitals through June 30;
- Extends the exceptions process for therapy caps through June 30;
- Extends the current “charges to cost” methodology that provides a separate payment for brachytherapy beginning April 1, including therapeutic radiopharmaceuticals;
- Extends the reasonable costs payments for certain clinical diagnostic laboratory tests in rural areas through June 30;
- Requires the Centers for Medicare & Medicaid Services to adjust the average sales price (ASP) calculation to use volume-weighted ASPs based on actual sales volume and institutes a reimbursement rate for generic albuterol; and
- Allows reimbursement for certain diabetes laboratory tests for home use at the same rate as other glycated hemoglobin tests beginning April 1.
Please note that congressional action to avert the reduction to the conversion factor is not the only change affecting 2008 Medicare payment rates. Adjustments will vary by service, specialty and locale based on the following factors included in the final CMS 2008 Medicare fee schedule rule:
- 2008 will be the second year in a four-year transition to revise practice-expense relative value units.
- A number of services — particularly under anesthesiology, and home-health and eye exams — have revised relative value units for physician work. These values increase significantly.
- CMS has increased the budget-neutrality adjustment created last year to compensate for changes to the five-year review of work values; payments for many services will drop by about 1 percent.
- The geographic adjustment factors (GPCIs) have been updated, as they are every three years. The changes’ magnitude is generally small, but affects many payment locales. In addition, the law just passed by Congress continued the floor on the work GPCI and the physician-scarcity area bonuses until June 2008.
The rule adds new services to those subject to imaging payment cuts stemming from the Deficit Reduction Act of 2005, which limits payments to no more than the comparable payment in hospital outpatient departments.