Here we go again: CMS announces 9.9% cut in MD fees, other changes

What a weekend. Michael Moore's "Sicko" opened over the weekend, and this morning CMS announced proposed rules to cut the Medicare payments to physicians by 9.9% overall. The spin on the announcement is that “This proposed rule is a further step in Medicare’s efforts to ensure that payment policies provide incentives to improve the quality of care.” You have to read down to the fifth paragraph before the magnitude of the cut is mentioned. Here’s the link to the proposed rules, which will actually be published in the Federal Register on July 12. The full release can be found here.

The proposed rules make a number of changes in the RVUs assigned, so that some services could see a higher RVU values that previously. Unfortunately, the conversion factor is set to decline, which leaves most physicians with a net loss of income.

Now, what does this mean and what do we do?

First, don’t panic. Second, call AND write to your congressman and senators. Third, start planning the worst case scenario.

In the proposed rules are the addendums with the indices for the three components of each RVU. I would start with your top 20 RVUs – or the RVUs that account for about 80% of your revenue. At this stage, getting a rough estimate is sufficient. The bigger challenge is going to be how other insurers will react with their own fee schedules, and how you can maintain revenue – maybe even increase revenue – in 2008.

There will be a lot more to come on this. The announcement was only made this morning, so the professional associations have not had time to react yet. Let’s see how events unfold.

My final thoughts: I recommended in January that you start taking actions towards 2010. Now get going!