Significant Medicare Payment Cuts Contemplated Under Obama Health Plan

The Obama administration announced yesterday, July 1, 2009, as reported in the Wall Street Journal, that it plans to significantly reduce Medicare payments to physicians, in particular, imaging services and specialists. The purpose of this policy change is to increase the number of primary care physicians to meet the demand of an aging population and the new wave of people who will qualify for insurance coverage if Congress approves the Obama health plan in its current form.

These changes will result in reducing Medicare payments for imaging services and specialists while increasing Medicare payments for primary care physicians by 6 – 8% next year. Other specialists, such as cardiologists, will experience comparatively greater cuts amounting to approximately 11% (with even more substantial reductions for certain procedures, such as echocardiograms and cardiac catheterizations). Radiologists are slated to experience a 20% cut for certain high-end imaging services (e.g., MRI and CT). These cuts are projected to save around $220 million between 2010 and 2014.

Proponents of this change argue that lowering the income gap between different physicians–primary care physicians and specialists–is a necessary change to the medical field. Opponents to the change contend that this change will limit and erode the ability to effectively treat, and make advances, in areas such as heart disease.

To the extent that these proposals are enacted, specialists and other imaging providers will need to re-evaluate certain elements of their business structure, and seek other means to lawfully maximize revenue. A number of different approaches, which are specific to each group’s/providers specific composition/payor mix/risk tolerance, can be deployed to adapt to these changes.

HLP’s Healthcare Transactional Group has extensive experience in developing structures that enable physician groups and providers to maximize opportunities in evolving reimbursement climates. For more information, please call Carey F. Kalmowitz, Esq. or Adrienne Dresevic, Esq., at (248) 996-8510 or visit The HLP website.