Assuming siganture by the President of the "Medicare Improvments and Extension Act of  2006"  , the following will be the major Medicare changes for the coming year. The complete text of the changes and Committee reports are avaialble on the link in the article posted here yesterday.


1.        2007 PHYSICIAN FEE SCHEDULE: The conversion factor for the Medicare Physician Fee was revised for 2007 only to eliminate the 5% reduction which would have been mandatory under Medicare’s sustainable growth rate formula.

2.         QUALITY REPORTING INCENTIVES OF 1.5% FOR 2007: The Act establishes a mechanism for enhancing the quality of reporting system first established by the Medicare Improvement Act of 2003 by adopting the quality measure specified in the physician voluntary reporting program, previously established by the Centers for Medicare and Medicaid Services, and establishing deadlines for adoption new quality measures. The Act provides transitional bonus incentive payments for quality reporting in 2007 equal to 1.5% of the Secretary’s estimate of allowed charges under the federal supplementary medical insurance trust fund for the covered professional services furnished during the reporting period, and provides future funding to promote physician payment stability and quality initiatives of $60 million to be transferred from the fund in 2007, 2008 and 2009.

3.         MEDICARE GEOGRAPHIC ADJUSTMENT: Extends floor established in Section 1848 (e) (1) (E) of the Social Security Act by MMA 2003 is extended through 2007 to protect physician work component payments in rural areas.

4.         2007 END STAGE RENAL DIALYSIS (ESRD) UPDATE: The composite rate component of the basic case -mix prospective payment is increased by 1.6% for 2007.

5.         RURAL CLINICAL DIAGNOSTIC LABORATORY TESTS: Reasonable cost payments for certain clinical diagnostic laboratory tests furnished to hospital patients in rural areas is extended until 2008.

6.         COMPETITIVE ACQUISITION PROGRAM (CAP): An audit process is established for reviewing drug and biological payments in the CAP program.

7.         QUALITY REPORTING PENALTIES: The Act extends the 2% penalty for the failure to observe the quality reporting programs for hospitals and applies it to ambulatory surgery centers.

8.         MEDICARE THERAPY EXCEPTION PROCESS: The exception process for appealing additional physical therapy payments is extended through 2007.