CMS revised the 2010 conversion factor lower by about half a penny after factoring payment formula changes to the Medicare Physician Fee Schedule.

The new conversion factor for this year is $36.0791, which is just 0.015% lower than the current rate of $36.0846. This is the result of relative value unit (RVU) corrections to the fee schedule and physician reimbursement formula changes mandated by the new health care reform law. 

One reform change in the Patient Protection and Affordable Care Act (PPACA) required CMS to raise payments for physician practice expenses currently being paid below the national rate. As a result, physicians in low-cost states (such as South Carolina and Mississippi) will get higher pay.

Read more on the conversion factor change

The 21.3% cut to Medicare reimbursements set for May 31 is getting national attention. National Public Radio (NPR) listeners were briefed on the cut caused by the sustainable growth rate (SGR) mechanism in the Medicare payment formula during the morning commute on Thursday.

Physician practices might be somewhat relieved this discussion is taking place 25 days before the cut hits. The publicity for this issue is good and there's no such thing as bad press.

This won't be the last you hear about a Medicare payment fix in the national news. Expect medical associations, such as the groups interviewed in the story (the American College of Physicians and American Medical Association), to increase lobbying efforts for a permanent pay fix over the next couple weeks.

Fixing Medicare payment rates for physicians is still going to be really expensive, according to the latest estimate from the Congressional Budget Office (CBO).

The CBO updated its score sheet on how much a Medicare "doc fix" will cost in 2011 and beyond. It's noteworthy that the CBO assumes 2010 payments will remain flat for the rest of the year. Payments are set to drop 21.3% on June 1. But freezing rates and preventing the 21.3% sustainable growth rate (SGR) cut from June through December will cost $6.5 billion.

Here's what else the CBO says:

• Maintaining 2010 payment rates in fiscal year (October-September) 2011 would cost $9.2 billion extra. A 2% increase in fiscal year 2011 would cost $9.8 billion. Payments would drop 30% in 2012 if no fix was enacted that year.
• Extending the current pay rate through 2020 would cost an extra $275 billion.
• Using a Medicare Economic Index of 0.7% to 1.8%, annual increases to physician payments in fiscal years 2011-2020 would cost $329.9 billion.

Being on-call for a hospital is one way for your physicians to make an extra buck, especially because most hospitals offer a cash bonus on top of services done. More than half of primary care physicians get paid an extra bonus for being on-call, according to a just-released survey by the Medical Group Management Association (MGMA).

More than half of primary care physicians get paid an extra bonus for being on-call, according to a just-released survey by the Medical Group Management Association (MGMA).

Just over 56% of primary care doctors surveyed by the MGMA report getting some type of additional cash compensation for taking on-call duties, whether for a few hours at a time or for entire 24-hour periods. About 73% of surgical specialists were paid extra.

Washington Post blogger Ezra Klein opined on Rep. Paul Ryan's (R-Wis.) April 28 comments regarding a permanent Medicare doc fix and the costs associated with health care reform.

In short, Ryan says the cost of a permanent fix to the sustainable growth rate (SGR) mechanism used in the Medicare payment formula needs to be factored into the costs of health care reform. The new health law will cut the deficit over the next 10 years, according to the Congressional Budget Office. But, if you add the $250 billion to $300 billion needed to eliminate the SGR -- health reform will add to the deficit.

Klein, a liberal blogger, disagrees with this is an argument, which is being made by other Republicans.

The SGR was created in 1997 by a Republican Congress and was signed into law by President Clinton, a Democrat. Ryan and other Republicans are "trying to add the repeal of a Republican policy passed in 1997 into the cost of a Democratic bill being passed in 2010," Klein argues. "But that's a bit like adding the cost of the Iraq War onto the bill, or maybe the Bush tax cuts. It's true that those were misguided, costly policies. But they're not part of the Affordable Care Act. They're part of the baseline that the Affordable Care Act changes."

Regardless of who is right and who is wrong, the costs of fixing the SGR is a major hurdle in Washington. Lawmakers are very conscious of federal debt and deficits these days.

Read more on the Medicare doc fix