While Congress reset the Medicare conversion rate back to the 2005 rate, reversing a 4.4% cut, the news for the coming decade is still ominous. CMS told the Medicare Payment Advisory Commission in an April 7 letter that the Medicare fee conversion factor for 2007 is projected to decrease by 4.6%.
The cut is mandated by the methodology that ties the physician rates to the increase – or decrease – in payments to physicians, and the volume and intensity of services. Both measures continue to rise faster than the “Sustainable Growth Rate”, which triggers the cut. The AMA predicts that, using the current formulas, the Medicare rates for physicians will drop by about one-third in the next decade. The Kaiser Daily Health Policy Report explains the details.