Thompson to Propose Plan on Medicare Provider Payments
HHS Secretary Tommy Thompson yesterday told members of the House Budget Committee that he hopes to send recommendations to Congress on a proposal to boost Medicare reimbursements for physicians, as well as recommendations on reductions elsewhere to cover the cost of the increase, within the next 10 days, CongressDaily reports (Fulton/Rovner, CongressDaily, 3/1). Medicare reduced physician reimbursement rates on Jan. 1 by 5.4% under a formula approved by Congress in 1997, a system based in part on changes in the nation's gross domestic product. The Bush administration has said that any increases to provider reimbursements made by Congress must be offset by other cuts in the budget. Thompson also told committee members that the Bush administration "has been working hard on the problem in an effort to make changes without changing the cost" to the fiscal year 2003 budget. "We know the pressure you're under for physician provider payments," Thompson said. In the past few weeks, lawmakers have raised concerns that President Bush's FY 2003 budget proposal does not include increased reimbursements for Medicare providers.
In related news, during a hearing of the House Ways and Means Subcommitteeon Health, the Medicare Payment Advisory Commission "officially" released a proposal to "overhaul" the Medicare physician reimbursement system (CongressDaily, 3/1). MedPAC in January criticized the reimbursement formula -- which does not account for increases in health care costs -- and recommended a new system that would increase reimbursements to physicians by 2.5% next year. The Congressional Budget Office yesterday estimated that the proposal would cost an additional $126 billion over 10 years. MedPAC Chair Glenn Hackbarth urged Congress to "scrap" the current Medicare physician reimbursement formula, which he said "causes large swings in updates from year to year that are unrelated to changes in the cost of providing physician services." However, discussing this year in particular, CBO Director Dan Crippen said that the main factor behind the large cut in 2002 is a data error that resulted in physicians being overpaid in 2000 and 2001, and "if the correct data had been used, the changes would not have been nearly as dramatic." Crippen also said that despite the 5.4% reduction in Medicare physician reimbursements, Medicare will likely spend an estimated 5.6% more on physician reimbursements this year than last. Still, lawmakers agreed that the "key question ... is whether the payment changes are affecting beneficiaries' access to care," CongressDaily reports. Paul Ginsburg, president of the Center for Studying Health System Change, said that 2001 data has indicated "access problems" -- such as "waiting times for appointments" and "finding physicians to accept Medicare patients" -- but he said that the problems also affect individuals with private health insurance and "are highly dependent on local market conditions." As a result, he said that "just fixing the formula may not be enough to protect access to care for Medicare beneficiaries" (CongressDaily, 2/28).
Meanwhile, the American Medical Association Wednesday launched a national advertising campaign that urges Congress to pass legislation to "replace the flawed Medicare payment formula" for physicians. The ads, which ran in newspapers in 17 states yesterday, ask lawmakers under the headline "Medicare Code Red" to pass the Physician Payment Fairness Act (HR 3351) (Dorschner, Miami Herald, 2/28). The bill would change the reduction in Medicare physician reimbursements that took effect Jan. 1 from 5.4% to 0.9% and would require MedPAC to develop a new Medicare formula for 2003. The AMA said that as a result of the reduction in Medicare physician reimbursements this year, 17% of family physicians will not take new Medicare patients and some doctors may retire earlier (Miami Herald, 2/28).