Medicare payment changes under reform bill

On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act (H.R. 3590) into law. Some physicians opposed it while others favored it. How will this new reform bill affect Medicare payments? Well, the AMA has developed a handy resource that outlines the Medicare payment changes:

Although Congress will address the flawed sustainable growth rate formula in separate legislation later this year, H.R. 3590 includes a number of payment improvements for physicians that, combined, will result in immediate and significant Medicare payment increases for many physicians.

• 10 percent incentive payments for primary care physicians. All physicians in family medicine, general internal medicine, geriatrics and pediatrics whose Medicare charges for office, nursing facility and home visits comprise at least 60 percent of their total Medicare charges will be eligible for a 10 percent bonus payment for these services from 2011–16.

• 10 percent incentive payments for general surgeons performing major surgery in health professional shortage areas. All general surgeons who perform major procedures (with a 10- or 90-day global service period) in a health professional shortage area will be eligible for a 10 percent bonus payment for these services from 2011–16.

• 5 percent incentive payment for mental health services. For 2010, Medicare will increase payment for psychotherapy services by 5 percent.
• Geographic payment differentials. The national average "floor" on Medicare's geographic payment adjustment (commonly known as the GPCI) for physician work expired at the end of 2009. The law re-establishes that floor in 2010. In 2010 and 2011, Medicare make a separate adjustment for the practice expense portion of physician payments that will benefit physicians in rural and low cost areas.

There is a third adjustment beginning in 2011, that will increase the practice expense GPCI adjustment for physicians in North Dakota, Montana, South Dakota,Utah and Wyoming to the national average. Physicians in 51 localities in 42 states, Puerto Rico and the Virgin Islands will benefit from the two practice expense adjustments.

To learn more about the AMA resource, visit the Health System Reform website.