CMS issues final ruling for Medicare reimbursements

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Medicare estimates that it will pay approximately $58.9 billion to about 900,000 physicians and other healthcare professionals due to the  recent final Medicare physician payment rule issued by the Centers for Medicare & Medicaid Services (CMS). The revised payments, quality incentive rates and related policy changes are included in the final rule, effective for services on or after Jan. 1, 2008.

CMS said the new rule is designed to improve accuracy of Medicare payments and give physicians and healthcare professionals additional financial incentives to provide higher quality and value in the delivery of care.

“This rule builds on the changes we have made to pay more appropriately and transform Medicare into an active purchaser of higher quality services” said acting CMS Administrator Kerry Weems. “It also encourages the use of electronic prescribing to improve the speed and accuracy of care to beneficiaries, and extends payment incentives for quality measures.”

CMS implemented the Physician Quality Reporting Initiative (PQRI), a voluntary reporting program in 2007 for physicians and other healthcare practitioners. Since July 1, eligible professionals who report specific measures on quality of care furnished to Medicare beneficiaries may earn incentives up to 1.5 percent of their total allowed charges, subject to a cap, according to CMS.

The 2008 final rule outlines PQRI measures which focus on whether a healthcare professional uses electronic health records and/or electronic prescribing, emphasizing the importance of this technology for delivery of high-quality healthcare services. Physician and non-physician professionals not meeting PQRI measures can participate by reporting on their use of health information technology. 

The Physician Assistance and Quality Initiative Fund will provide $1.35 billion for physician payment and quality improvement initiatives for services furnished in 2008.

The Medicare law includes a statutory formula requiring CMS to implement a negative 10.1 percent update in payment rates for physician-related services. This formula compares the actual rate of growth in spending to a target rate, which is based on such factors as the growth in the number of Medicare fee-for-service beneficiaries and statutory or regulatory changes in benefits. 

“This builds upon increases for primary care services that Medicare implemented last year,” Weems said.  “By paying physicians more to spend time talking to their patients about their health, we hope to improve health status of Medicare beneficiaries.”

The final rule will be published in the Federal Register on Nov. 27.