The two men leading the National Commission on Fiscal Responsibility and Reform released a draft document outlining their thoughts on cutting the national deficit and improving the federal budget. The 50-page document dedicates six pages to the Medicare program in a section titled Mandatory Budget Options.

The preliminary report represents the co-chairmen's ideas and not the consensus of the whole commission. However, physician practices should take note of where the commission might be headed when it comes to Medicare reimbursement issues. The commissioners want to fix the flawed Medicare payment formula that uses the sustainable growth rate (SGR) mechanism. But, the fix would be paid for.

I spoke to two members of Congress, in the House of Representatives, about the major legislative issues affecting you and your peers. That really boils down to just two issues: the looming Medicare physician pay cut and the future of the health reform law, which one side wants to uphold and the other repeal.

While Republican Rep. Michael Burgess (Texas) and Democratic Rep. Diana DeGette (Colorado) both agree that the 23% cut must be stopped, they hold opposite views on the health reform law.

Here are edited transcripts of my conversations with them, over phone and email (read more about interviews with House Republicans and Democrats) ...

CMS quietly released a fact sheet on Part B premiums and deductibles for 2011 a couple days after Election Day and the release of the 2011 Medicare Physician Fee Schedule. Both rates will be going up next year.

The Part B deductible will be $162, a 4.5% increase from the $155 deductible in 2010.

The standard premium will be $115.40, a 4.4% increase from the 2010 rate. Premiums are increasing "because of growth in the use of services like outpatient hospital care, home health and physician-administered drugs," CMS says. "In addition, the premium accounts for a likely Congressional action to avert a precipitous decrease in physician  payments, which the Administration supports, and has occurred every year since 2003. The Administration is committed to permanent reform of the physician payment formula."

Patients who currently have the Social Security Administration withhold their Part B premium and have incomes of $85,000 or less (or $170,000 or less for joint filers) will not have an increase in their Part B premium in 2011, CMS says. So, a majority of Medicare patients will continue to pay $96.40, which has remained unchanged since 2008.

Preventing the 23% cut slated for Dec. 1 must be a top priority for HHS, Secretary Kathleen Sebelius said in remarks at the annual meeting of the Association of American Medical Colleges (AAMC). The importance of stopping the cuts comes from the top, as President Obama himself stressed to Sebelius at a Cabinet meeting last week, Sebelius said.

"The single biggest step we can take to strengthen Medicare for seniors and disabled Americans is to make sure these disruptive cuts don't take effect," she said (read more about Obama and the pay fix) ...

The Recovery Audit Contractor (RAC) program is going to get much bigger, according to a CMS proposed rule. RAC auditors in your state will start scrutinizing Medicaid claims by 2011. 

The health care reform law, the Affordable Care Act, mandates that states have Medicaid RAC contractors operating by Dec. 31. The Medicaid RACs will operate just like Medicare RACs. They will be paid to review provider claims, identify overpayments and recover money. The RACs can also look for underpayments, but that is left to the state's discretion.

"Reducing improper payments is a key goal of the [Obama administration], and the tools provided by the Affordable Care Act will help us achieve that goal," said CMS Administrator Donald Berwick, MD, in a statement about the proposed rule. "We are using many of the lessons that we learned from the Medicare RAC program in the development and implementation of the Medicaid RACs, including a far-reaching education effort for health care providers and state managers."