The U.S. Centers for Medicare and Medicaid Services (CMS) estimates that Medicare physician reimbursement will be cut by 29.5% in 2012 unless long-term action is taken, the agency said in a letter to the Medicare Payment Advisory Commission (MedPAC).
To calculate the cut, CMS used a formula that does not include legislative interventions in previous years, wrote Jonathan Blum, CMS' deputy administrator and director. The current update to the conversion factor is 0%, due to legislative actions taken by Congress, making the 2011 conversion factor $33.9764. But that could change in 2012.
"We currently estimate that the statutory formula used to determine the [physician fee schedule (PFS)] update to the [conversion factor (CF)] will result in a 2012 CF of $23.9396, which represents a change of -29.5% from the December 2011 CF," Blum wrote.
The sustainable growth rate (SGR) will also decrease: The current estimate of the SGR for 2012 is -17.2%, according to Blum.
"The [Medicare and Medicaid Extenders Act (MMEA) of 2010] prevented a reduction for 2011," Blum wrote. "This short-term relief has been critical -- but so too is a long-term solution. We will continue to work with Congress to fix this untenable situation so doctors no longer have to worry about the stability and adequacy of their payments from Medicare."
