CMS Final Rule Announces a 21.2% Medicare Physician Payment Cut

CMS Final Rule Announces a 21.2% Medicare Physician Payment Cut for 2010 

Medicare’s final 2010 payment rule confirms that in 60 days physicians face steep cuts of 21.2% — the largest payment cut since Congress adopted the Medicare physician payment formula.

The difference is due to the use of the most recently available data on CMS spending for physicians’ services.


Medicare’s payment rule also includes refinements that will increase payment rates for primary care services.

Taking all changes in the final rule-with-comment period into account, the CMS projects that payments to general practitioners, family physicians, internists and geriatric specialists will increase by between 5% and 8%, prior to application of the negative update required by the SGR.

The final rule with comment will appear in the Nov. 25, 2009 Federal Register.  CMS will accept comments on designated provisions of the final rule with comment period until Dec. 29, 2009, and will respond to all comments at a later date.  Unless otherwise specified, the new payment rates and policies will apply to services furnished to Medicare beneficiaries on or after Jan. 1, 2010.

Jonathan Blum, Director of CMS, Center for Medicare Management, indicated the Administration tried to avert the pending fee schedule cut in the FY 2010 budget proposal that it submitted to Congress, and remains committed to repealing the SGR (Sustainable Growth Rate).


CMS is currently 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 CY 2010, the CMS projects it will have a positive effect on future payment updates.

While the CMS had proposed to use information about physician practice costs from the Physician Practice Information Survey (PPIS), the agency will now phase in the information during a 4-year period.

In addition, the CMS will continue to uses specialty supplemental survey data — not information from the PPIS — to determine practice expenses for medical oncology.

Other provisions in the rule make changes to the Physician Quality Reporting Initiative and the Electronic Prescribing Incentive Program. These changes include providing participants with more reporting options and implementing a new method for practices to be considered successful e-prescribers.