In a down-to-the-wire session, Congressional leaders voted on Dec. 9 to stop the 5 percent Medicare cut scheduled to take effect this month due to the flawed Sustainable Growth Rate formula. The Tax Relief and Health Care Act of 2006 freezes the Medicare conversion factor for physician reimbursement at 2006 levels for one year. Heavy lobbying by the American Medical Association and the California Medical Association and strong grassroots activity by individual physicians brought about the change. Reversing the cut will cost an estimated $13 billion.

"This is another great win for physicians--albeit a short-term gain," says Anmol Mahal, MD, CMA president. "There is no way Congress would have acted without major pressure from the physician community."

Further, for the first time, the Centers for Medicare and Medicaid Services will offer higher reimbursement to physicians who report at least three quality measures for 80 percent of their cases, starting July 2007. For their participation in the initiative based on the Physician Voluntary Reporting Program, doctors will receive a 1.5 percent bonus on services provided between July 1, 2007, and Dec. 31, 2007.

However, the quality program as legislated does not meet the AMA and CMA standards and represents a serious concern for organized medicine groups, officials say. CMA leaders intend to work with Congress to clarify ambiguities and to ensure the program is workable for all physicians.

Although the payment freeze is positive, some physicians still face reductions to their Medicare reimbursement this month based on changes to the work relative value units, which are unaffected by the legislation. Medicare is increasing reimbursement for evaluation and management services to place a stronger emphasis on primary care. But because of budget neutrality requirements, it must decrease payments for other services and procedures, which impacts many specialty physicians.

"The CMA is disappointed by the Medicare fee schedule cuts imposed on physicians because of the relative value changes," Dr. Mahal says. "While we applaud overdue increases to the E&M codes, those increases should not be paid for with offsetting cuts to other physicians."

Finally, absent major changes between now and the end of 2007, physicians will again face the SGR cut. So the CMA has formed a new Medicare Reform Committee to develop a proactive, strategic plan to seek a long-term overhaul of the physician payment system. Concludes Dr. Mahal, "Physicians cannot continue to practice in such an unstable environment, waiting for Congress to act at the last minute to reverse devastating cuts."