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2006;9;171-198. Medicare in Interventional Pain Management: A Critical Analysis
Health Policy Review
Laxmaiah Manchikanti, MD
 

Recent years have been quite eventful for interventional pain physicians with numerous changes in the Medicare payment system with a view for the future and what it holds for interventional pain management for 2006 and beyond. On February 8, 2006, President Bush signed the Deficit Reduction Act of 2005, which cuts the federal budget by $39 billion and Medicare and Medicaid by almost $11 billion over five years. The Act contains a number of important provisions that effect physicians in general and interventional pain physicians in particular.


 

This Act provides one year, 0% conversion factor update in payments for physicians services in 2006.


 

Medicare has four programs or parts, namely Medicare Parts A, B, C, and D, and two funds to pay providers for serving beneficiaries in each of these program. Part B helps pay for physician, outpatient hospital, home health, and other services for the aged and disabled who have voluntarily enrolled.


 

Before 1922, the fees that Medicare paid for those services were largely based on physician’s historical charges. Despite Congress’s actions of freezing or limiting the fee increases, spending continued to rise because of increases in the volume and intensity of physician services. Medicare spending per beneficiary for physician services grew at an average annual rate of 11.6% from 1980 through 1991. Consequently Congress was forced to reform the way that Medicare sets physician fees, due to ineffectiveness of the fee controls and reductions.


 

The sustained growth rate (SGR) system was established because of the concern that the fee schedule itself would not adequately constrain increases in spending for physicians’ services. The law specifies a formula for calculating the SGR, based on changes in four factors: (1) estimated changes in fees; (2) estimated change in the average number of Part B enrollees (excluding Medicare Advantage beneficiaries); (3) estimated projected growth in real gross domestic product (GDP) growth per capita; and (4) estimated change in expenditures due to changes in law or regulation.


 

Overall, the frequency of utilization of interventional procedures has increased substantially since 1998.


 

In 2006 and beyond, interventionalists will face a number of evolving economic and policy-related issues, including reimbursement discrepancies, issues related to CPT coding, issues related to utilization, fraud, and abuse.

 

   
 
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Laxmaiah Manchikanti


Keywords
Interventional pain management
pain medicine
utilization
clinical effectiveness
cost effectiveness
algorithmic approach
precision diagnosis
precision treatment
sustainable growth rate formula
pay-for-performance
Centers for Medicare and Medicaid