Medicare Compliance & Reimbursement

Medicare pay cut more likely in the wake of Katrina and Rita.

Physicians that don't want take a pay cut of nearly 5 percent next year should make that fact known to the feds. The Centers for Medicare and Medicaid Services is still predicting a drop of 4.3 percent in Medicare payments next year, and the chances of avoiding this disaster have gotten slimmer. With the costs of cleaning up after Hurricanes Katrina and Rita mounting up, Congress is looking to cut Medicare--not add money to it.

Capitol Hill insiders tell MLR that the Katrina aftermath has pushed back the schedule for dealing with everything, including next year's budget. Members of Congress are very aware that physicians are facing a steep cut next year, and "there's even a lot of sympathy," but it may not be possible to solve the problem with the high costs of Katrina, says one Hill insider.

Opportunity: Now is the time for physicians to call their representatives or senators and make the case for saving Medicare patients from cuts, say insiders. If doctors pass on the message that Medicare patients will lose access to care if they lose out, then Congress is ready to listen, says attorney Rebecca Burke with Powers Pyles Sutter & Verville in Washington.

The only problem is that thousands of people in the Gulf states are already having problems finding doctors, say Hill insiders. Congress is worried about patients' immediate access to physicians, so it's harder to convince them to focus on access problems that might hit next year.

"If you're a member of the Louisiana delegation and you're wondering if you're going to have any doctors in the lower half of the state, that takes precedence," says one insider.

That just means physicians have to try even harder to make their voices heard.

Some observers are more optimistic. "Certainly the competing needs for funds don't make it any easier," says Rich Trachtman, director of congressional affairs with the American College of Physicians. "But I don't think that Congress has lost sight of the need to address the physician fee schedule cut."
 
Potential Formula Tweak Could Help Physicians

Help may be on the way, though. CMS may finally remove Part B drugs from the formula it uses to calculate updates to physician reimbursement, say insiders. If CMS makes this change retroactively, then payments might only be cut half as much. And it would be less expensive for Congress to avoid cuts completely.