Medicare Physician Fee Schedule 2012: Strut Your Practice for 27% Medicare Conversion Factor Cut

Could a reprieve be approaching?

It is the time for another round of stressed waiting to see if you'll get a vivid reduction in 2012 Medicare payments meant for your general surgical services. Keep in mind that the calendar year 2012 Medicare Physician Fee Schedule [PFS] conversion factor is $24.6712, as per the 2012 Medicare Physician Fee Schedule Final Rule, as printed in the Nov. 28 Federal Register -- and that could mean a huge cut in your pay.

Wait for Congressional Relief

The conversion factor (CF) sums to a dismal 27.4 percent cut compared to the existing rate of $33.9764. CMS recognizes that this enormous cut may not be set in stone, stating that while Congress has offered temporary relief from these reductions every year from 2003, a long-term solution is critical. It further says that it will carry on working with Congress to provide solution to this indefensible situation so doctors and beneficiaries no longer have to be concerned about the stability and adequacy of their Medicare Physician Fee Schedule payments.

Physician advocacy organizations were quick to criticize the cuts. Payments for Medicare physician services have dropped so far underneath upsurges in medical practice costs that there is certainly a 20 percent gap between Medicare payment updates and the cost of caring for seniors.

Even CMS officials consented that the 27.4 percent cut would be devastating, however remained positive that the government might cure the situation before the pay cuts take effect. This payment rate cut would have dismal consequences that must not be allowed to happen. CMS says that it needs a permanent SGR fix to resolve this problem once and for all. That is the reason why the President's Budget and his Plan for Economic Growth and Deficit Reduction call for permanent, fiscally responsible reform and why CMS is committed to working with the Congress to achieve a permanent and sustainable fix.

Recall 2011 fix: Last December, Congress voted to stave off a 25 percent cut to your Medicare pay. But that vote kept the cuts at bay only through December 31 of 2011. Effective January 1, 2012, your Medicare pay is set to drop again based on the new 2012 Medicare Physician Fee Schedule information, unless Congress interferes to reverse the cuts.

Temporary reprieve: On December 23, 2011, President Obama signed into law the "Temporary Payroll Tax Cut Continuation Act of 2011," which delays the proposed 27 percent cut for two months.