The Centers for Medicare & Medicaid Services (CMS) has estimated that Medicare physician payments will be cut by 29.5 percent in 2012 unless a long-term solution is adopted.

In a letter to the Medicare Payment Advisory Commission (MedPAC), Jonathan Blum, deputy administrator and director of the Center for Medicare, released the projected 2012 physician fee schedule conversion factor update, which CMS put at $23.94. The current conversion factor update is 0 percent, thanks to the last-minute Medicare and Medicaid Extenders Act of 2010 (MMEA, which included the ‘doc fix’ extension of physician payments). This leaves the effective conversion factor at $33.98 through the end of this year.

These estimates would produce a 29.5 percent drop in payments, a reduction postponed by the doc fix provision. “The MMEA prevented a reduction for 2011. This short-term relief has been critical–but so too is a long-term solution,” Blum wrote on behalf of CMS.

The sustainable growth rate for 2012 was estimated at -17.2 percent. The update adjustment factor, a function of target and actual expenditures, was put at -6.4 percent, shy of the legal limit of -7 percent.

Reflecting on the MMEA’s short-term stabilization of physician payments, Blum said that CMS “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.”