Med Management Quarterly

February 2008

Congress Delays Medicare Cuts

Steeper Reductions Now Scheduled for July

The Senate late Tuesday December 18th passed the Medicare, Medicaid and State Children's Health Insurance Program (SCHIP) Extension Act of 2007 (S.2499). The House of Representatives also passed the bill which replaces the 10.1 percent reduction in Medicare Part B payments scheduled for 2008 with a six-month, 0.5 percent increase. The President is expected to sign this bill into law. Physicians will face a payment reduction in Part B payments in July 2008 unless Congress once again intervenes. The Medical Group Management Association (MGMA) is concerned about the uncertainty that the six-month extension will have on group practice operations.

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 test for home use at the same rate as other glycated hemoglobin tests beginning April 1.

Article courtesy of MGMA Washington Connextion™