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Senate Passes Medicare Fee Schedule Fix
January 2, 2007 - Late in the evening on Saturday, December 9, the U.S. Senate passed the
"Tax Relief and Health Care Act of 2006" (H.R. 6111) by a vote of 79-9 with 12 not voting.
The legislation, passed by the House on December 8 contains a fix of the 2007 Medicare
Physician Fee Schedule, among other Medicare items. The bill, sponsored by current House
Ways and Means Committee Chairman Bill Thomas (R-CA), tied medicare items to another legislative
vehicle not related to health care. The next step for this bill is forwarding to the President's
desk where it is expected to be signed into law.
The bill addresses the Medicare physician fee schedule by eliminating the 5 percent cut scheduled
for 2007 for all physicians. The legislation further directs CMS to develop a quality reporting
system for physicians in Medicare, giving the Agency broad authority to identify consensus measures
and develop the requirements for reporting. Beginning in July 2007, Medicare physicians who report
quality data to CMS will be eligible to receive a bonus payment for services connected to the quality
measures. The legislation creates a $1.35 billion fund from which to pay reporting bonuses to physicians.
While the exact nature of the reporting requirements are unclear, CMS has begun a similar process of
developing physician measures in conjunction with the Physician Voluntary Reporting Program (PVRP),
and has very recently released new PVRP measures for 2007 on the CMS PVRP website.
Other key Medicare and Medicaid provisions of the legislation include (pages refer to current legislative
text:
- The composite rate component of the basic case-mix adjusted payment rate for dialysis services is
increased by 1.6 percent for services provided from April 1, 2007 through March 31, 2007. (Section 103, page 17)
- A pay-for-reporting program is created for hospital outpatient departments (HOPDs) and ambulatory surgical
centers (ASCs). Beginning in 2009, for those HOPDs or ASCs that did not submit quality data to CMS, the annual
payment update would be reduced by 2 percent. (Section 101, page 1)
- The exceptions process for outpatient therapy caps, created by the Deficit Reduction Act, is extended through
December 31, 2007. (Section 201, page 31)
- The open enrollment requirements for Medicare Advantage non-prescription drug plans are modified to encourage
Medicare Advantage enrollment. (Section 206, page 41)
- The Medicare Advantage stabilization fund is reduced by $6.5 billion. (Section 301, page 43)
- The allowable Medicaid provider tax rate is reduced from 6 percent to 5.5 percent. (Section 403, page 54)
- Transitional Medical Assistance (TMA) health care coverage for former recipients of the Temporary Assistance for
Needy Families (TANF) program after they enter the workforce is extended. (Section 401, page 53)
To read the complete legislative text, click here. (The Medicare section begins on page 119 of the PDF [with the
Physician Fee Schedule section concluding on page 13] and concludes on page 189.)
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