Legislation Introduced to Avert Medicare Payment Cuts for Physicians

On March 13, 2008, Senator Debbie Stabenow introduced the Save Medicare Act of 2008 (S.2785). If enacted, S.2785 would continue the 0.5 percent Medicare payment update for physician services for the last 6 months of 2008. S.2785 would also establish a 1.8 percent Medicare payment update for physician services in 2009.

On December 29, 2007, President Bush signed the Medicare, Medicaid and SCHIP Extension Act of 2007 into law preventing a 10.1 percent reduction in Medicare physician payments that was scheduled for 2008 and giving physicians a 0.5 percent increase through June 30, 2008. The 10.1 percent reduction in Medicare physician payments was driven by the statutory sustainable growth rate (or SGR) formula, which is intended to control the growth in aggregate Medicare expenditures for physician services. 

As reflected in Transmittal 312, the Centers for Medicare & Medicaid Services will implement a 10.6 percent reduction in physician payments (i.e., the 0.5 percent update will no longer apply and a negative 10.1 percent update will take effect) for dates of services on or after July 1, 2008 unless Congressional action is taken.