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CMS cuts physician payments by 5%

Ambulatory Surgery Reimbursement Update, November 7, 2006

The Centers for Medicare & Medicaid Services (CMS) 2007 outpatient prospective payment system (OPPS) final rule issued November 1 updated payment rates and policies under the 2007 Medicare Physician Fee Schedule.

As anticipated by the proposed rule released in August, physicians will experience a 5% reduction in payment for services in 2007, "to account for the combined growth in volume and intensity of physician services," according to CMS.

Despite industry hopes that Congress would avert the cuts before recessing for the election season, physicians will have to wait until the lame-duck legislative session, due to begin November 13, to see whether they will take effect January 1.

Also consistent with the requirements of the Deficit Reduction Act of 2005, the final rule caps payment rates for imaging services under the physician fee schedule at the amount paid for the same services when performed in hospital outpatient departments and reduces payment for the technical component of multiple imaging procedures on contiguous body parts.

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