Medicare
Legislation to remove current limitations on balance billing in the Medicare program
Medicare Physician Payment Cuts – Sustainable Growth Rate
Information about the 2007 Medicare Fee Schedule - [click here to download].
Medicare Cuts Averted
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Issue: Medicare is governed by a fixed formula, the sustainable growth rate (SGR), that governs the overall amount of monies paid to physicians for their Medicare services in any given year. This formula is fundamentally flawed, because it does not increase payments to physicians based on usage or costs, but rather on an indexed rate unrelated to the costs borne by physicians or the needs of their patients. In essence, the greater the number of patients who are eligible for Medicare, and the more services those patients use, the lower the payments made to physicians. This is so even though governmental programs encourage patients to seek medical care and despite the fact that the medical care they receive is allowing them to live longer and healthier lives.
It is universally recognized that the SGR formula is fundamentally flawed and needs to be replaced with a system that recognizes increased practice costs and increased utilization. In an effort to prevent devastating cuts to this program, Congress, for the last several years, except for 2002, has enacted laws to prevent the scheduled annual cuts. Even though Congress has taken these actions, physicians payments under Medicare are actually lower than they were in 2001, and this does not account for inflation. In fact, the Centers for Medicare and Medicaid Services (CMS) administrator has stated that the current physician payment system is not sustainable.
Because of the flawed SGR formula, cuts in physician reimbursements are scheduled to occur for each of the next nine years resulting in a 37% cut through 2015, again, not taking inflationary costs into account.
Finally, these scheduled cuts are on top of other cuts that took place in last year’s Deficit Reduction Act, which especially affected radiologists and will affect other specialties when the new Medicare relative value unit (RVU) formulas are adopted.
For more information concerning the scheduled Medicare cuts and their impact on New Jersey, see the following documents:
For information concerning physician participation options in Medicare see the following document:
MSNJ Position: There is a consensus that the following changes are needed:
- Until a comprehensive solution is found, Congress needs to act immediately to prevent these cuts from taking place and to provide for an increase based on inflation;
- There is widespread consensus that the SGR formula needs to be replaced;