Endocrine Insider
January 10, 2008

As 2007 was coming to a close, Congress passed S. 2499, the Medicare, Medicaid, and S-CHIP Extension Act of 2007, temporarily halting the 10.1 percent Medicare physician payment cut that was set to begin on January 1, 2008. The cut has instead been replaced by a six-month 0.5 percent payment increase. Congress must act again before June 30 to ensure that the 10.1 percent cut will not go into effect on July 1, 2008, and members are hopeful that another agreement to keep these cuts at bay can be reached by mid-year.

In previous years, last-minute legislation to stave off physician payment cuts has been effective for the entire upcoming year, though the flawed sustainable growth rate (SGR), the major underlying reason for consistent decreases in projected physician payments, has yet to be addressed. In 2007, members of Congress and the Bush Administration could not agree on how best to bolster physician reimbursement in 2008, and compromise came in the form of the six-month fix. Some members of Congress supported a one-year fix to the physician payment cut by freezing payments at 2007 levels and pushing the cuts back to future years, essentially replicating measures that have been taken in the past. Others supported a two-year fix to the payment cuts paid for by reducing payments to Medicare Advantage (MA) plans, bringing them more in line with fee-for-service payments under Medicare Part B. This strategy would have covered much of the 10.1 percent physician payment cut. The president, however, made it clear to Congress that he would veto any physician payment legislation that included reducing payments to MA plans. Without the support necessary to override a presidential veto, members of Congress were forced to find an alternate compromise that Democrats, Republicans, and the president could all support.

In addition to pushing back the Medicare payment cuts by six months, S. 2499 extends funding in 2008 to continue the Physician Quality Reporting Initiative’s (PQRI) 1.5 percent bonus payment program to physicians and provides continued funding for the State Children’s Health Insurance Program (S-CHIP) through March 31, 2009. The legislation does not, however, affect cuts to imaging services.

It is unclear whether Congress will have time to address the issues surrounding the SGR before the six-month fix expires. The Endocrine Society will continue to advocate for fair reimbursement for physicians, including a permanent solution to the flawed system by which physician payments are calculated.

Click here to view a PDF with more information on the details of S. 2499.

The Endocrine Society will continue to keep you updated as Congress debates physician payment changes in the coming year.