CMS' proposed payment shift

July 13, 2009

Proposed changes to the physician fee schedule would shift the balance of reimbursement payments.

It looks like a boost to primary-care physicians could come at a cost to their higher-paid specialist brethren. CMS' proposed 2010 physician fee schedule released last week would cut rates for specialists and imaging services, shifting the pay to primary care.

Organizations have been parsing through the regulation to see just how deep the cut would be for each specialty (cardiology: 11 percent, for example), while CMS says the regulation would increase payments to general practitioners, family physicians, internists, and geriatric specialists by 6 percent to 8 percent.

To do this, CMS would eliminate payment for consultation codes, which are billed by specialists and paid at a higher rate than E&M codes. CMS says "resulting savings would be redistributed to increase payments for existing E&M services." CMS would also refine practice expenses and revise malpractice premiums.

Overall, physicians' payments would be slashed by a whopping 21.5 percent under the proposed regulation.

That is, unless Congress enacts legislation reversing the cuts, a strong possibility. The rates are updated each year based on the sustainable growth rate, which has yielded reductions for the last eight years. But, Congress has stepped in to avoid the cuts each year. (Meanwhile, specialists' groups say they will lobby lawmakers to stop the cuts, according to the Wall Street Journal.)

What do you think? Is this an effective way to close the pay gap between primary-care docs and specialists? Is this another sign the Obama administration is serious about primary care?

The regulations also included perhaps some good news for all. CMS proposed removing physician-administered drugs from the formula used to calculate the fee schedule, which has been long advocated for by the AMA and MGMA. (Cost hikes for outpatient drugs in recent years have outpaced other services, pushing spending levels above the target, according to AMA.) It wouldn't prevent the 2010 reductions, but it would mean fewer years of negative updates.

All of that said, CMS is accepting comments until Aug. 31 and a final rule will be issued by Nov. 1. Congress, your move.