Medicare E&M boost negated by 5% pay cut; specialists hit harder

Nearly half of Medicare's doctors will see payment reductions that range from 6% to 20% because of several reimbursement changes, the AMA estimates.

By David Glendinning, AMNews staff. Nov. 20, 2006.

Washington -- The Bush administration at the beginning of November put its final touches on the 2007 physician fee schedule, leaving it up to Congress to address a reimbursement situation that will have some doctors barely treading water and others inundated by deep payment cuts.

The final fee schedule rule includes a 5% across-the-board cut that will affect every physician. The figure is down slightly from the 5.1% that the Centers for Medicare & Medicaid Services estimated in a proposed rule earlier this year.

But that's not the only reimbursement change that will affect physicians. Based on recommendations from the Relative Value Update Committee, a panel convened by the American Medical Association, CMS also adopted rate changes that commit more money to evaluation and management services.

However, the AMA disapproves of the way the agency carried out the suggestions because it resulted in greater cuts for specialists.

"The rule we are announcing today will pay physicians more for the time they spend talking with their patients about their health care," said CMS Acting Administrator Leslie V. Norwalk about the E&M change. "We believe that this emphasis on personalized care will lead to better outcomes for patients and more efficient use of health care resources."

Primary care physicians and other doctors who regularly bill for E&M services will receive higher rates for this care as a result of the changes. Many of them, however, will not even notice, said Cecil B. Wilson, MD, chair of the AMA Board of Trustees.