News | July 02, 2007

CMS Proposes Physician Payment Changes for 2008

July 3, 2007 – Under a proposed rule released July 2, the Centers for Medicare & Medicaid Services (CMS) would revise payment rates and policies under the Medicare Physician Fee Schedule (MPFS) for 2008. In an attempt to provide incentives to improve the quality of care, the CMS projects that it will pay approximately $58.9 billion to 900,000 physicians and other healthcare professionals next year.
“This proposed rule builds on the changes the Centers for Medicare & Medicaid Services made last year to pay more appropriately for practice expenses and to transform Medicare into an active purchaser of higher quality services, rather than just paying for procedures” said acting CMS Administrator Leslie V. Norwalk, Esq. “It also includes an important new initiative to encourage the use of electronic prescribing to improve the speed and accuracy of care furnished to beneficiaries, as well as proposals for additional quality measures for use in the Physician Voluntary Reporting Initiative in 2008.”
The estimated update to the physician fee schedule for 2008 is -9.9 percent based on the sustainable growth rate (SGR) formula specified in the Medicare statute.

“For the past 5 years, Congress has intervened to prevent the implementation of the negative updates resulting from this formula,” said Ms. Norwalk. “CMS will continue working with Congress as well as physician groups to identify payment methods that help improve the quality and efficiency of care in a way that is cognizant of the costs to taxpayers and to Medicare and its beneficiaries. The Medicare program needs to compensate physicians appropriately for the services they provide to people with Medicare. But how the program pays also matters. We think the early work on the PQRI program is one of those reforms that could help lead us to a point where we can promote better quality care and more efficient care.”

The proposed rule would make a number of changes to payments for specific services paid under the MPFS.

Comments will be accepted on the proposed rule until August 31, 2007, and a final rule will be published later in the fall. The final rule will be effective for services on or after January 1, 2008.

For more information: www.cms.hhs.gov/center/physician.asp.

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