Medicare proposes no ESRD drug add-on update in 2009

WASHINGTON—In what has become an annual ritual, the Centers for Medicare & Medicaid Services has proposed a cut to physician payments—5.4 percent for 2009—that will invariably need to be fixed by Congress next year to avoid stoking the ire of American doctors.

The Physician Fee Cut

The cuts occur because of a Medicare-established formula that requires a fee cut when spending exceeds established goals. Congress normally comes to the rescue and reverses the cuts through legislation. This year was an exception as year political wrangling over how to manage those cuts have put physicians in danger of facing a 10.6 percent cut in Medicare fees on July 1. Congress did not pass legislation before the deadline and is on recess until July 7. Therefore, President Bush called on Medicare to delay the cuts until July 15 in order to give Congress time to reconcile.

Medicare released its new proposed payment and policy changes for 2009 on June 30 and said comments from the public will be accepted until August 29. With the proposed 5.4 percent cut for next year, total Medicare spending under the 2009 Physician Fee Schedule is projected to be $54 billion, down 5 percent from the projected $57 billion in 2008, according to CMS.

In a press release, Medicare said, “Through the MPFS (Medicare Physician Fee Schedule), CMS is encouraging greater efficiency in the delivery of care, while reducing treatment errors through the use of electronic health records; and exploring new payment models to see if there are ways to promote greater coordination of care among providers, producing better outcomes for the healthcare dollar.”

Among the other proposals in the 834-page document, Medicare will require doctors performing diagnostic tests to adhere to new performance standards. It is also calling for increasing financial incentives for reporting quality measures.