Last week The Center for Medicare & Medicaid Services (CMS) ensured the government-run Medicare program pays accurately for drugs and other services that physicians provide. As a result of the new provision under the Medicare Modernization Act of 2003, physician payment rates increase by 1.5 percent in 2005. This move negates a previous law's planned cut of payment rates by 3.3 percent for 2005. The Physician Fee Schedule sets rates for how Medicare pays more than 875,000 physicians and other health care professionals. The changes are effective Jan. 1, 2005 and include: new coverage for cardiovascular disease and for diabetes; changes to the proposed payment provisions for the physical (physicians can bill for the electrocardiograms in addition to the payment for the physical); increased coverage for vaccinations and other types of injections (ie: influenza vaccine payments increase from $8 to $18); provisions to expand beneficiary access to high-quality care; changes in Medicare's approach to paying for drugs administered in a doctor's office and services related to the use of those drugs; and the adoption of 18 new codes to be used for billing for administering drugs (developed by AMA's CPT Editorial Board). The final rule also enhances other physician payments. In addition to the 1.5 percent increase in physician payment, Medicare will also offer a 5 percent quarterly incentive payment to doctors practicing in "physician scarcity areas." Those areas are listed on the CMS web site at www.cms.hhs.gov/providers/bonuspayment . The final rule will be published next week in the Nov. 15, 2004 Federal Register. The display copy can be found at: http://www.cms.hhs.gov/physicians/pfs/default.asp