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40 Days

Elyas Bakhtiari, for HealthLeaders Media, May 22, 2008

Will Congress stop the cut in time? What if they don't? How will it affect my practice? Should I stop seeing new Medicare patients?

Physicians have many questions on their minds as the July 1 deadline for the 10.6% reduction in Medicare payments draws near and physician groups and associations are intensifying their advocacy efforts in hopes of sparking Congressional intervention on their behalf.

But the 40-day window is deceiving—the time for Congressional action actually is a little shorter. CMS would need a couple of weeks to "amend payment instructions and send them to Medicare carriers," says CMS Deputy Administrator Herb Kuhn, and the Bush administration has asked Congress to pass a bill by mid-June. Any later and physicians would likely receive the reduced payments and then receive full reimbursement retroactively, if at all.

But to be honest, I'm not all that concerned about the payment reduction. It's not that the cut wouldn't have serious consequences. In fact, a significant portion of physicians would likely follow through on their promise to drop Medicare patients and the financial squeeze on practices, particularly small ones, would tighten. But Congress is fully aware of the repercussions and for that reason your representatives have little choice but to intervene. In fact, I'm willing to go on record with a prediction: Congress will freeze (or perhaps slightly increase) payments by mid-July.

That's not exactly a bold prediction (and it's only good news compared to the current alternative). It's the same course of action Congress took earlier this year, and again the year before that, and it has been the only course of action for so long that the hand-wringing, calls to action, warnings about reduced patient access and last-minute legislation have become an annual late-December tradition. The only difference is this time it's happening in the middle of the year.

It's as if we're aboard a leaky ship and the only tool the federal government can find is a bucket. Yes, they've been diligently scooping out the water to keep the ship afloat for longer than it would have been on its own, but at some point they have to try a different tactic. Like plugging the holes.

It's too late this time. It is unclear what the final legislation will look like, but Max Baucus, chair of the Senate Finance Committee, has been spearheading the issue, and his proposal would freeze payments for the rest of 2008 and provide a slight (most likely 1.1%) increase for 2009. There's also talk of attaching an e-prescribing mandate to the bill.

But like the fixes before it, this one is only temporary. It would rely on "balloon financing ," meaning physicians might face another 21% payment cut in 2010. The good news is the 18-month window should provide time to develop a sustainable fix to the payment system.It's a tall order, but if physicians keep up the pressure and play an active role in developing a new system, it's feasible. Who knows? This may be the last article about a pending Medicare fee cut I'll ever have to write.


Elyas Bakhtiari is a managing editor with HealthLeaders Media. He can be reached at ebakhtiari@healthleadersmedia.com.
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