A new report from the U.S. Congressional Budget Office (CBO) projects that Medicare payment rates for physician services will decrease by 29.4% next year.
The reduction follows several years of legislative action to determine physician payment rates under the Medicare program. Payment rates are scheduled to drop under the provisions of Medicare's sustainable growth rate (SGR) mechanism.
The SGR formula is widely seen as a flawed method for setting Medicare payments, but Congress has been unable to enact a permanent fix and instead has relied on short-term postponements. As a result, the size of the SGR cut has grown each year.
In December, President Obama signed a bill into law that delayed for one year a scheduled 23% cut in the Medicare Physician Fee Schedule, which was to go into effect on January 1, 2011.
