Medicare to cut physician reimbursements by 5 percent
If the Bush Administration gets its way, new federal rules introduced Tuesday will see physicians taking a 5.1 percent reduction in their reimbursement rates for Medicare patients starting in 2007, the Associated Press reports.
As for hospitals, they could see a 3 percent upshot in reimbursements for outpatient services, but this will require them to provide information to the government that shows that they are adhering to guidelines designed to improve care.
The new rules are being put forward to get the nation’s healthcare system “out of the vicious cycle of rapid growth in utilization and spending," said Mark McClellan, administrator for the Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services, in introducing the changes, the AP reports.
The current system provides a set fee for particular services, therefore encouraging the ordering of more procedures for patients, McClellan said. The occurrence of such instances is on the rise, he added.
Additionally, McClellan stated that hospitals must be required to submit more information about the care given to patients to minimize the likelihood that unneeded tests will be ordered, the AP reports.
For its part, the American Medical Association has vigorously fought against the implementation of this rule change. "Seniors who rely on Medicare and the physicians who care for them are stuck wondering if 2007 will be the year access to care erodes as we wait for congressional action to stop the Medicare payment cuts," said Cecil Wilson PhD, chairman of the AMA's board of trustees, the AP reports.
Wilson also addressed proposed cuts to the use of imaging in physician offices. The new rule would establish that doctors would be reimbursed in full for the initial imaging procedure, but this would fall 25 percent for additional imaging tests, the AP reports.
This is important, he said, but this will prevent patients from getting the best diagnosis possible. "It is important to look not just to the increase in use of such services, but to their ability to provide patients with healthier outcomes, such as using CT scans and MRIs to pinpoint and stage various types of cancer," Wilson said, the AP reports. "Medicare must differentiate between appropriate and inappropriate imaging use and tailor its policies so that appropriate use is not punished."
Doctors and concerned parties will be able to submit comments to CMS regarding the proposed change for three months. To submit comments electronically, follow the directions at or snail mail comments can be addressed here:

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-1321-P
P.O. Box 8014
Baltimore, MD 21244-8014