Medicare Physician Payment Update

Medicare Bill Becomes Law - 10.6 % Physician Pay Cut is Averted

On Tuesday, July 15, President Bush vetoed H.R. 6331, the "Medicare Improvements for Patients and Providers Act of 2008."  However, Congress acted that same day to override the presidential veto.  The House vote was 383 to 41 and the Senate vote was 70 to 26.  With sufficient approval by the House and Senate to override the veto, the measure became Public Law 110-275.

The following provisions, among others, will be implemented by the new law:

  • Averts the 10.6% Medicare physician payment cut that went into effect on July 1 and replaces it with a freeze in payments for the remainder of 2008 and a 1.1% increase in 2009 (Note: Since the flaws in the underlying payment formula were not addressed, physicians will face a approximate 20% cut in 2010);
  • Effective 2009, reapplies budget neutrality adjustment for recent RVU changes to the Medicare Conversion Factor (CF), instead of Work RVUs as it has in the past two years. In 2007, emergency medicine's work values, along with those of primary care physicians, were increased during the RUC's 5-year review process, but those gains were eroded by CMS' decision to move the adjustment. As a result of physician efforts, the change Congress just made will benefit emergency medicine's major evaluation and management codes, which are forecast to increase an average of at least 3 percent;
  • Extends PQRI until January 1, 2011 and increases bonus payments for participating physicians to 2% for 2009-10;
  • Creates incentives for use of electronic prescriptions, applying additional positive payment updates (on all Medicare charges) of 2% in 2009-10, 1% in 2011-12 and  0.5% in 2013, with corresponding payment reductions of -1% in 2011, -1.5% in 2012 and -2% in 2013 and beyond for non-users;
  • Extends 1.0 floor on work geographic practice cost index (GPCI) payments through 2009;
  • By 2012, requires facilities performing advanced imaging services (MRI/CT/PET) to be accredited to be eligible for technical component payments and establishes two-year voluntary demonstration program using appropriateness criteria for advanced imaging services (ultrasound excluded from both programs);
  • Provides gradual elimination of Medicare psychiatric service co-payments and for a full low-income subsidy assets test under the Medicare Savings Program;
  • Directs HHS to make grants to states for health insurance assistance programs, area agencies on aging and aging and disability resource centers;
  • Permanently applies the Medicare reciprocal billing arrangements for physicians ordered to active duty; and
  • Extends increased Medicare payments for ground ambulance services and Medicaid DSH payments.

For additional information, please contact Brad Gruehn in the ACEP Washington DC Office at 202-728-0610 or


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