CMS Puts 2012 Medicare Fee Cut at Nearly 30 Percent

Image via WikipediaBy Emily P. Walker, Washington Correspondent, MedPage Today

The Centers for Medicare and Medicaid Services (CMS) has estimated that in 2012 Medicare physician reimbursement will be cut by 29.5%.

When President Obama signed a bill in 2010 to postpone the scheduled 25% cut in Medicare reimbursement through 2011, physicians were aware that the pay cut would be greater than 25% come 2012. And, if CMS' estimate holds true, it will be.

Writing in a letter to the chairman of the Medicare Payment Advisory Commission (MedPAC), Jonathan Blum, deputy administrator of CMS' Center for Medicare, said that the "conversion factor" -- the dollar multiplier used to calculate physician payments under the current reimbursement system -- will be cut by an estimated 29.5% in 2012, from $33.98 to $23.94.

The cut is mandated by the sustainable growth rate (SGR), a formula that ties physician reimbursement to the gross domestic product; the SGR has called for cuts in pay every year since 2002. Every year since 2003, Congress has voted at the last minute to push those cuts down the road.

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