No more imaging cuts in 2009 Medicare budget; physicians payments to shrink

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Imaging seems to have avoided cuts in FY 2009. Source: Crothall Services Group  

President George W. Bush’s budget released Monday proposed unprecedented reductions in Medicare spending for non-physician providers, but did not propose cuts specifically targeted to diagnostic imaging services.

“We are pleased that in a budget that reduces Medicare spending, the administration chose not to propose further cuts to this critical component of high quality care,” said Andrew Whitman, vice president of the Medical Imaging & Technology Alliance. Whitman said that as a result of the Deficit Reduction Act of 2005, seniors have experienced disruptions to access for life-saving imaging services.
 
The American College of Radiology (ACR) said, however, that while no new cuts are proposed for imaging or other physician payments, the current budget baseline reflects shrinking payments for physician services in the fee-for-service program.

The Sustainable Growth Rate (SGR) conversion factor that largely determines reimbursements is scheduled to fall 11 percent on July 1, and at least 5 percent each subsequent Jan. 1, the ACR said.

The President’s $3.1 trillion fiscal year 2009 budget proposed reductions to the Centers for Medicare & Medicaid Services' budget by $16 billion in 2009, $196 billion over the next five years and $619 billion over 10 years.

Bush asserted that his proposals would lower Medicare’s growth rate from 7 percent to 5 percent annually and eliminate one-third of the program’s 75-year unfunded liability of $34 trillion toward his goal of balancing the federal budget by 2012, according to the ACR.
The ACR said that Medicare’s spending trends triggered a provision from the 2003 Medicare Modernization Act, requiring the President to offer reform legislation to rein in the program. If the growth rate is not cut, the Medicare Hospital Insurance Trust Fund would expire 2019 under intermediate assumptions.

If enacted, the ACR said that significant reductions in payments to hospitals could have adverse revenue ramifications for physicians working in or with hospitals.

Rich Umbdenstock, president and CEO of the American Hospital Association, said the president's proposal, if passed by Congress, would have a disastrous impact on U.S. healthcare, according to Healthcare Finance News (HFN).

"America's hospitals strongly oppose this budget's outrageous cuts to Medicare and Medicaid," he told HFN. "In the real world, these enormous budget numbers come with enormous consequences, making hospitals' job of caring for patients even more difficult."

Edward Langston, MD, board chairman of the American Medical Association, said a failure to address payment cuts to doctors will result in decreased access to care for seniors, as doctors may be forced to end participation in the Medicare program, reported HFN

The bulk of the Medicare cuts (budgeted to save $182 billion over five years) come from reductions in update factors for inpatient and outpatient hospital care, skilled nursing facilities, long-term care hospitals, hospices, ambulances, home health services, inpatient rehabilitation facilities and ambulatory surgery centers, the ACR said.

Additional savings come from reductions in payments to hospitals for inpatient hospital indirect medical education and disproportionate share hospital adjustments, and administrative and regulatory changes.

View the complete budget summary based on highlights of the Administration’s Medicare and other health programs budget proposals prepared by Health Policy Alternative, Feb. 5, 2008.