Eleventh-Hour Vote Avoids Medicare Cut

Family physicians' bottom lines stand to benefit as a result of legislation passed by Congress Dec. 9. The legislation prevented a scheduled 5 percent pay cut for primary care physicians and -- beginning in July -- will institute a 1.5 percent incentive payment for physicians who report on quality measures.

In addition, lawmakers avoided adding any provision that would change new evaluation and management, or E/M, codes, which are scheduled to increase the value of CPT codes 99213 and 99214.

The end result: a slight increase in Medicare payment for the two most commonly billed primary care codes.

"Overall, this is a real win" for the Academy and for family physicians, said AAFP President Rick Kellerman, M.D., of Wichita, Kan. "To the thousands of family physicians who called their legislators, talked to legislative aides, sent faxes or e-mails -- thank you. For those who didn't, thank someone who did. You owe them … literally!"

Because lawmakers did not change the recently announced adjustments to the relative value units for E/M codes, payment for CPT code 99213 will increase by $6.83, or 13 percent, and CPT code 99214 payments will rise by $7.58, or 9 percent. When accounting for the increases in E/M services and the decreases in non-E/M services provided by FPs, the overall impact on Medicare-allowed charges to family physicians would be a 5 percent increase in 2007.

The E/M code changes take on added significance, said Kellerman, because "several major national insurance companies have told us they will adopt the new Medicare E/M relative value units."

The legislation passed by Congress contains several other provisions AAFP advocated throughout the 109th Congress. For example, physician reporting provisions laid out in the bill generally parallel Academy recommendations that

The bill also establishes a three-year demonstration of the medical home concept. The medical home demonstration program would pay physician participants care management fees and incentive payments. The program would encourage participation by physicians in small practices and those who serve rural and underserved populations.

Despite the 11th-hour victory, the campaign for Medicare reform of the sustainable growth rate, or SGR, still lies ahead, said Kellerman. It is the SGR, which Medicare bases its physician payments on, that has required annual physician pay cuts since 2002.

"We still have a way to go because our ultimate goal is to fix the SGR," said Kellerman.

Next year, the Academy will focus efforts on advocating adoption of legislation that implements the AAFP's policy on restructuring the Medicare payment system. That policy calls for replacing the SGR with a stable, predictable annual update based on the Medicare economic index, which reflects inflation in the health care sector. Such a system should be linked to quality and should reward physicians who provide high-quality, efficient patient care, according to the Academy.