Physicians had hoped for budget neutrality in the Deficit Reduction Act of 2005, i.e., the “zero update,” expecting the 4.4% decrease implemented by the current Medicare Sustainable Growth Rate rules to be eliminated. The general reimbursement reduction mandated for 2006 was eliminated by DRA 2005, but DRA 2005 requires that the cost of the physician reimbursement increases be offset by future reductions, meaning that DRA 2005 is simply postponing these reimbursement decreases until future years.

The DRA 2005 budget neutrality rules also did not protect certain imaging services. Despite the elimination of the statutory reduction for most physician services, an exception for imaging services performed on contiguous body parts was included. It is projected that these reductions for imaging service reimbursement will reduce Medicare spending by $2.8 billion from 2006 to 2010.