CMS: Medicare conversion factor will drop 21.2% in 2010

November 19, 2009

Unless Congress takes action, physicians paid under the Medicare fee schedule face another significant pay cut in 2010.

Unless Congress takes action, physicians paid under the Medicare fee schedule face another significant pay cut in 2010.

The Centers for Medicare & Medicaid Services recently announced that the final rule will reduce the conversion factor for services on or after Jan. 1, 2010 by 21.2%, rather than the 21.5% projected in the proposed rule. The difference is due to the use of the most recently available data on CMS spending for physicians’ services, CMS said in a statement.

Current law requires CMS to adjust the fee schedule payment rates annually based on an update formula that requires application of the sustainable growth rate (SGR). This controversial formula has yielded negative updates every year beginning in 2002, although CMS was able to take administrative steps to avert a reduction in 2003, and Congress has taken a series of legislative actions to prevent reductions for the succeeding years.

"The administration tried to avert the pending fee schedule cut in the fiscal year 2010 budget proposal that it submitted to Congress and remains committed to repealing the SGR," said Jonathan Blum, of the CMS Center for Medicare Management. "In the meantime, CMS is finalizing its proposal to remove physician-administered drugs from the definition of 'physicians' services' for purposes of computing the physician fee schedule update. While this decision will not affect payments for services during 2010, CMS projects it will have a positive effect on future payment updates."

J. James Rohack, MD, AMA president, said in a statement that the 21.2% reduction would be "the largest payment cut since Congress adopted the fatally flawed Medicare physician payment formula. Access to care and choice of physician for seniors, baby boomers and military families is at serious risk-and Congress must fix the payment formula once and for all this year."

Details on how specific reimbursement and policy changes under the final rule will affect urologists will be outlined in the December issue of Urology Times.