Medicare cuts service fees for MDs

In a move that's sure to please few--other than the bean counters at CMS [1]--the agency said yesterday that it will be cutting fee-for-service rates for physicians, while boosting payments for office visits. Office visit reimbursement will go up about one-third, but service reimbursements should drop an average 6 to 20 percent, according to estimates from the American Medical Association. The idea, according to CMS, is to pay physicians more for the time they spend interacting with patients, taking the focus off of diagnostic testing. CMS has proposed similar cuts since 2003, but Congress has suspended them.

The new rules do offer a bit more money for other groups, meanwhile. Hospitals will get a 3 percent pay hike for outpatient care, and home health agencies should see a 3.3 percent increase. Hospitals, however, will have to begin providing CMS with quality data by 2009 or face reimbursement cuts.

Find out more about the cuts:
- review this CMS release [2]
- read this Associated Press article [3]

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