Medicare Payment Status
Memo to:
Executive Directors
State Medical Associations
National Medical Specialty Societies
From: Michael D. Maves, MD, MBA
Date: December 29, 2005
Subject: Status of 2006 Medicare Physician Payment Update
As you know, because Congress has not yet completed final action on the budget reconciliation conference agreement, the 4.4% cut is slated to go into effect for dates of service beginning January 1, 2006.
On December 28, I had a conversation with Dr. McClellan and pressed him to not impose the cut on January 1 since both the House and Senate have passed legislation that would prevent the cut. Unfortunately, Dr. McClellan replied that CMS is legally obligated to impose the 4.4% cut on January 1.
The House is not scheduled to return until January 31, but since Medicare payment updates are generally effective for the full calendar year beginning January 1, the freeze at 2005 levels should be retroactive to January 1 whenever the bill is finally passed in House of Representatives and signed into law by the President.
Dr. McClellan and I discussed the possibility of CMS working to ensure that the Medicare carriers will be able to reprocess claims at that point and provide retroactive adjustments without physicians needing to resubmit claims. The specifics of how claims are to be handled have not yet been finalized, but it is clear that CMS is giving serious consideration to this approach.
Because the final House action on the budget reconciliation conference report is not expected until the end of January or even early February, CMS does not think it prudent to advise physicians to hold their claims until legislation is signed into law. CMS is also planning to allow individuals another opportunity to modify their status as participating or non-participating physicians after the reconciliation bill is signed into law.
We also also discussed some of the physician concerns about the new drug benefit that will go into effect January 1. CMS is sensitive to physician concerns about timely access to formulary information for the new prescription drug plans and is rolling out information on the www.medicare.gov Web site that will give physicians easy access to all the plan formularies in their state. CMS is also working to supply current formulary information via epocrates-based hand-held devices in the near future. Resources to help patients with the drug benefit are also available on the AMA Web site at www.ama-assn.org/go/medicarerx
We will continue to strongly push Congress to take final action in the next 45 days to stop the cuts. Additionally, early in the new year we will begin a full court press for a long-term solution to the SGR morass.
Thank you all for your many contributions to this year's effort. We will continue to work together on behalf of organized medicine and our patients.