CMS Announces 2004 Cut of 4.5% in Medicare’s Physician Reimbursements
CMS Administrator Tom Scully on Thursday announced that the agency will reduce Medicare's physician reimbursements by 4.5% in 2004, the AP/Las Vegas Sun reports (Sherman, AP/Las Vegas Sun, 10/30). In March, Bush administration officials announced that the provider payment cut for 2004 would likely be 4.2%, despite a provision in the 2003 omnibus spending package that provided $54 million over 10 years to avoid such cuts. That law also blocked a proposed 4.4% reduction for 2003 (California Healthline, 3/26). Scully said that the 2004 cut will be higher than the forecasted 4.2% because CMS is legally required to follow the current payment formula, which is based on actual Medicare spending, the rate of medical inflation and economic growth. CMS will revise the formula next year to "make it more reflective of doctors' costs," according to agency officials, the AP/Sun reports. The American Medical Association said the cut will make physicians reluctant to accept new Medicare beneficiaries. AMA President Dr. Donald Palmisano said physicians are already limiting their number of new Medicare patients because reimbursements do not match service costs. He added that the new reimbursement cuts will exacerbate the problem and "make it even harder for seniors to get the health care they need." The cuts come amid negotiations to reconcile the House and Senate Medicare bills (HR 1 and S 1); the House bill would cancel reimbursement reductions for 2004 and 2005 and boost physician payments by 1.5% (AP/Las Vegas Sun, 10/30).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.