Published on December 20, 2006
President Bush Signs Federal Legislation on
Physician Payment Issues, TC Grandfather
Washington, D.C.— President Bush today signed legislation that will stop the 5-percent Medicare physician payment cut for 2007 and provide a 1.5-percent payment for physicians that report quality measures. The legislation also will extend the expiring “TC Grandfather” through 2007.
The Tax Relief and Health Care Act of 2006, H.R. 6111, was passed by the U.S. House of Representatives December 8 by vote of 367-45 and by the U.S. Senate December 9 by a vote of 79-9. The legislation was introduced December 7 by House Ways and Means Chairman Bill Thomas (R-CA) after a deal was reached with Senate Finance Chairman Charles E. Grassley (R-IA) and other Congressional leaders.
“We commend Congress and President Bush for supporting this legislation that will provide stability for our health care system and help ensure Medicare patients continue to have access to quality care,” said Thomas M. Sodeman, MD, FCAP, and president of CAP. “Without this legislation, pathologists would have faced an additional cut in Medicare physician payments, forcing some to no longer participate in the Medicare program and putting seniors access to health care at risk.”
The final rule on physician payment issues from the Centers for Medicare and Medicaid Services (CMS) released November 1 included a five percent cut to all Medicare physician payments. CMS based the cut on its flawed Sustainable Growth Rate formula. Although the legislation stops the cut, CAP will continue to urge Congress next year to fix the flawed SGR. Pathology still faces a 6-percent cut that includes the budget neutrality adjustment for evaluation and management from the 5-year-review (-5%) and the short-term effect of practice expense (-1%).
The legislation also will provide the stability independent laboratories and hospitals need to maintain surgical diagnostic services vital to Medicare beneficiaries. In 1999, CMS issued a final notice that Medicare would no longer pay independent laboratories for the technical component (TC) of pathology services provided to hospital inpatients and outpatients. To date, this payment change has not been fully implemented because the College has successfully won passage in Congress of a series of temporary TC “grandfather” exemptions, and in 2003, under the Medicare Modernization Act, Congress provided a “grandfather” through 2006.
“We are pleased that Congress and President Bush agree that independent laboratories should not have to seek payment from already cash-strapped hospitals that won’t receive new funds from Medicare to pay for laboratory services,” Sodeman said. “Small and rural hospitals, that typically cannot afford in-house pathology services, would be especially hard hit, jeopardizing patient access to surgical care and state-of-the-art testing for cancer and other serious illness.”
The College of American Pathologists is a medical society serving about 16,000 physician members and the laboratory community throughout the world. It is the world’s largest association composed exclusively of pathologists and is widely considered the leader in laboratory quality assurance. The CAP is an advocate for high quality and cost-effective patient care.