Physicians Brace for Summer Reimbursement Cuts

Medicare reimbursements for healthcare providers will be cut by an average of 10.6% on July 1st and Congress may not be capable of rolling back these planned reductions in time to beat the deadline.

As many physicians recall, the Centers for Medicare & Medicaid Services CMS”) final 2008 Medicare physician fee schedule included average cuts in excess of 10%. The scheduled 2008 cuts, followed by Congress’ frenzy to agree upon a restoration of the cuts, was the latest episode in an annual tradition that has been occurring for many years.

In the waning months of 2007, Congress failed to obtain sufficient votes to rollback the 2008 cuts for the entire year, but did pass a six month reduction moratorium. That six month moratorium will be over in three weeks and Congress has yet to agree upon one legislative blueprint for restoring the cuts. Therefore, unless Congress acts, and acts very quickly, the largest reimbursement cuts in history will take effect.

Washington insiders have expressed skepticism that Congress will be able to restore the cuts before July 1st. Instead, the best hope lies in a retroactive rollback of the cuts and there is some precedent for such an ex post facto rollback.

Congress has missed the deadline on at least two prior occasions. In 2003, a cut set-in before Congress could come to a compromise in March, which ultimately restored cuts and increased reimbursements for the remainder of the year, without directly restoring providers’ lost revenues from January and February. Once again, in 2006, reimbursement cuts went into effect on January 1st, prior to Congressional action in February that restored the cuts and provided an additional modest increase. In 2006, unlike 2003, Congress retroactively restored lost revenues from January and early February claims.

We’ll be watching closely as Congress works feverishly to cobble together a compromise and we’ll keep you updated on the latest news. Please check back often!

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