Medicare's coverage of preventive care is better than ever, and we are taking additional steps in 2007.

In 2007, we will add abdominal aortic aneurysm (AAA) screening to the growing list of preventive services covered by Medicare. As required by the Deficit Reduction Act (DRA), the screening benefit will include a one-time only ultrasound screening for individuals who take advantage of the Initial Preventive Physical Examination ("Welcome to Medicare") benefit, as well as appropriate education, counseling and referral services. We are also implementing a provision in the DRA that exempts the colorectal cancer screening benefit from the Part B deductible, eliminating a potential financial barrier to using this benefit.

In addition, in 2007, we have revised work relative value units (RVUs) for over 400 services to better reflect the work and time required of a physician in furnishing the service and modified the way we calculate the practice expense portion of physician fee schedule payments.

The 2007 physician fee schedule currently includes a negative 5.1 percent update. The negative update is required by law for 2007 because spending on physicians' services and other Part B services has been growing at a much faster rate than target spending. As a result of continued rapid growth in utilization of services, coupled with legislative action to eliminate the payment reductions, Part B spending has increased more rapidly than had been forecast, and beneficiary premiums for Part B services have increased as well.

Physician groups have been working hard to identify better ways to pay - ways that better support physician efforts to provide higher-quality care without increasing overall health care costs. The Centers for Medicare & Medicaid Services (CMS) will continue to work with Congress and with physician groups to provide higher quality care for beneficiaries without increasing Medicare spending.

All physicians, practitioners and suppliers must make their calendar year (CY) 2007 Medicare participation decision by December 31, 2006.

To sign a participation agreement is to agree to accept assignment for all covered services that you provide to Medicare patients in CY 2007.

Why Participate?

If you bill for physicians' professional services, services and supplies provided incident to physicians' professional services, outpatient physical and occupational therapy services, diagnostic tests, or radiology services, your Medicare fee schedule amounts are 5 percent higher if you participate. Also, providers receive direct and timely reimbursement from Medicare.

Regardless of the Medicare Part B services for which you are billing, participants have "one stop" billing for beneficiaries who assign both their Medicare and Medigap payments to participants. Beneficiaries with Medigap coverage (private supplemental insurance) may assign the payment on the supplemental claim to the provider or supplier. Under the current mandatory Medigap (claim-based) crossover process, beneficiaries must assign payment on their claims to a participating provider or supplier as a condition for their claims to be forwarded to their Medigap insurer for payment of all coinsurance and deductible amounts due under the Medigap policy. The Medigap insurer, in turn, must pay the participating provider or supplier directly, thereby relieving the need of having to file a second claim.

The majority of physicians, practitioners and suppliers have chosen to participate in Medicare. During CY 2006, 93.0 percent of all physicians, practitioners and suppliers are billing under Medicare participation agreements.

What To Do

If you choose to be a participant in CY 2007:

   -    Do nothing if you are currently participating, or

   -    If you are not currently a Medicare participant, complete the blank
        agreement enclosed and mail it (or a copy) to each carrier to which
        you submit Part B claims. (On the form, show the name(s) and
        identification number(s) under which you bill.)

   -    Do nothing if you are currently not participating, or

   -    If you are currently a participant, write to each carrier to which
        you submit claims, advising of your termination effective January 1,
        2007. This written notice must be postmarked prior to January 1,
        2007.

We hope you will decide to be a Medicare participant in CY 2007.

Please call 877-567-7173 if you have any questions or need further information on participation.

To view updates and the latest information about Medicare, or to obtain telephone numbers of the various carrier contacts, including the carrier medical directors, please visit the CMS Web site at http://www.cms.hhs.gov/.

To view the new 2007 Medicare Physician Fee Schedule and Anesthesia Conversion Factors, please visit your local carrier Web site, www.umd.nycpic.com/fees.html.

For the Upstate Medicare Division (UMD), you may contact the following toll-free number(s) for assistance: 877-567-7173.