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CMS cuts physician payments by 5% in 2007 Fee Schedule

Physician Practice Advisor, November 8, 2006

The Centers for Medicare & Medicaid Services (CMS) has released a final rule that will update 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 a CMS press release.

A hallmark of the rule is "a stronger emphasis on the physician-patient relationship," achieved through an increase in the work component for the relative value units (RVUs) for evaluation and management services. For example, the work component for RVUs associated with an intermediate office visit will increase by 37%, according to the press release.

The final rule also

  • adopts a new methodology for determining practice expense (e.g., office overhead) RVUs to be phased in over a four-year period
  • amends the public consultation process for developing payment amounts for new clinical laboratory tests
  • adopts supplier standards for independent diagnostic testing facilities
  • continues the temporary intravenous immune globulin preadministration-related services fee into 2007

Click here to read the CMS press release.