Looming Medicare pay cut forces tough decisions on participation

Some physicians may be attracted by the higher reimbursement they can get under a nonparticipation arrangement, but patient collections may be an issue.

By David Glendinning, AMNews staff. Dec. 24/31, 2007.

Washington -- With congressional debate on an upcoming 10.1% Medicare cut to physicians stretching into the final weeks of the year, physicians' decisions on whether to participate in the program in 2008 took on added degrees of importance and complexity.

The year-end deadline for physicians to change their participation status is important because it likely will determine how doctors will be able to bill the program and receive payment for all of 2008. If physicians do not inform their Medicare carriers in writing of their intent to change their status before Jan. 1, they will be locked into their current choices for the next 12 months -- possibly under a newly reduced fee schedule.

This year's decision is more complicated than usual given the pay cut's unprecedented size and lawmakers' delay in addressing it. The American Medical Association urged doctors earlier this month to look extra hard at Medicare participation options in light of the political situation.

"Unless Congress takes immediate action ... Medicare will begin across-the-board cuts on Jan. 1," said AMA President Ron Davis, MD. "Congressional action is not guaranteed, so physicians interested in changing their Medicare participation status for 2008 should review the information now, fill out the forms and prepare to mail them prior to Dec. 31."

The AMA has a document on its Web site (www.ama-assn.org/ama1/pub/upload/mm/399/medicarepayment08.pdf) outlining participation options and telling doctors how to change status. If Congress fails to reverse the cut by Jan. 1, but does so after it reconvenes, lawmakers could decide to let doctors who changed their status revert to their prior choice.