Endocrine Insider
November 9, 2007

The Center for Medicare and Medicaid Services (CMS) released its Final 2008 Medicare Physician Fee Schedule last week, providing physician payment information for the upcoming year. The schedule proposes a 10.1 percent cut to physician payments in 2008, an increase of .2 percent above the previously proposed reduction of 9.9 percent released in CMS’s proposed rule in July, 2007. In order to halt the cuts, Congress must act by either altering the formula used to calculate payments or deferring the cuts to future years.

Discussions are occurring among members of the Senate Finance Committee on ways to eliminate the payment cut before the end of the year. One proposal being discussed would suspend the cuts for one year by decreasing payments to Medicare Advantage (MA) plans. MA plans generally receive a higher rate of reimbursement than Medicare fee-for-service. Another proposal would suspend the physician payment cut for two years by cutting MA plans by approximately $30 billion. It would also increase reimbursements to providers in rural areas. These proposals are controversial in Congress, and it remains to be seen how the House and Senate will address physician payments for the coming year.

Also included in the final rule is a correction that The Endocrine Society and other organizations brought to the attention of CMS. In its proposed rule, CMS assigned the cost of equipment used for DXA scans as $41,000 reflecting “pencil beam” technology. The current equipment used for DXA tests is “fan beam” technology, at a cost of $85,000. The American Medical Association’s Relative Value Update Committee (RUC), reviewed this mistake on behalf of CMS, and submitted its support for a correction to be made. CMS accepted this correction, and in 2008, DXA equipment will be valued at the appropriate rate of $85,000.

The Society will submit comments to CMS opposing the 10.1 percent cut to physician payments in 2008 and provide relevant updates in future issues of Endocrine Insider.