CMS proposes physician Medicare payment rate cut in 2010

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The Centers for Medicare & Medicaid Services on Wednesday proposed reducing Medicare payment rates for physicians by 21.5% in calendar year 2010. It also disclosed other physician payment reforms as part of the administration's healthcare reform agenda.

To offset the payment rate cut, CMS also is proposing to remove physician-administered drugs from the definition of "physician services" for purposes of computing the physician update formula. The agency projects this change would reduce the number of years in which physicians would experience a negative update. CMS also said it would use a new American Medical Association approved survey, the Physician Practice Information Survey, to update the practice expense component of physician fees, according to the agency. Additionally, CMS would eliminate payments for consulting codes and revise treatment of malpractice premiums. As the government works out its healthcare reform plans, nursing homes have been concerned that its government payments will be cut to pay for reform measures.

Current Medicare law dictates that CMS adjust Medicare physician pay every year based on a prescribed formula, which has resulted in negative pay updates since 2002. CMS will be accepting comments on the proposed rule until Aug 31. More information is available at