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Center for Medicare and Medicaid Services (CMS) Proposes Significatn Physician Payment Cuts in 2007 On August 22, 2006, CMS issued a notice of proposed rulemaking for the 2007 Medicare Physician Fee Schedule. In the notice, CMS now estimates that physician payments will be cut by 5.1 percent. Unless Congress intervenes and makes changes to the currently flawed sustainable growth rate (SGR) formula, the cut will go into effect on January 1,2007. The AANS and CNS are working closely with other medical specialty groups to ask Congress to change the SGR formula and mitigate the SGR-driven cuts before adjourning in October. More information is available on the Web at www.cms.hhs.gov/center/physician.asp In addition to the SGR-related cuts, neurosurgeons should anticipate decreases in reimbursement resulting from the Five Year Review of the Medicare Fee Schedule and proposed changes to the methodology for calculating practice expenses. As a result of the Five Year Review, most codes in the fee schedule have been increased, particularly the evaluation and management (E/M) codes and the E/M component of the surgical global fee. Because of the budget neutrality requirements, however, CMS will need to apply a budget neutrality adjuster, which will result in a cut of about 5 percent. The practice expense changes will decrease payments for neurosurgery by an additional 1 percent. Taken together, absent Congressional action, neurogurgeons can anticipate decreases in reimbursement of 10 percent or more on January 1, 2007. For more information on this and other coding and reimbursement issues, please contact Cathy Hill, AANS/CNS senior manager of Regulatory Affairs, at chill@neurosurgery.org.