The Southern California Physician, January, 2002 |
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President's Message MEDICARE PHYSICIAN PAYMENT RATE DECREASE IS BAD NEWS
According to Reesa Wilkie, CMA's Associate Director of Medical Practice and Economic Advocacy, the Medicare 2002 conversion factor is $36.1992, down from $38.2581 in 2001, which results in a reduction in reimbursement of 5.4 percent from 2001. This marks the single biggest drop in the CF since the start of RBRVS in 1992. The conversion factor is a number that is multiplied times the relative value for each procedure to come up with a dollar reimbursement and, therefore, this represents an across the board reduction to all services. Ms. Wilkie explains that several other significant changes to the fee schedule have created variations in the ways a physician practice experiences the impact of the new conversion factor and may offset the reduction created by the change in conversion factor for some physician services. One was the updating of the Relative Value Units (RVUs) associated with each item on the fee schedule. Some specific services have benefited from the review but probably not enough to offset the 5.4 percent reduction. Also, 2002 is the last year for the transition to resource-based practice expenses, one of three cost factors considered in the Medicare reimbursement formula. As with the RVU update, changes in the practice expense will impact specific services. While not all physicians will experience an across the board reduction of 5.4 percent, it is likely that we will experience some significant reduction. Because commercial rates are driven by Medicare, this reduction will negatively impact all physician reimbursement and access for all Californians. What are we doing about it? CMA issued an urgent appeal to California's congressional delegation to promote a proposal that AMA has already put before federal legislators to correct the Medicare payment formula. In his letter, CMA President Frank Staggers, M.D. clearly stated the problem and urged that Congress freeze the 2001 payment rate until a new and fairer reimbursement formula is developed. CMA is already on record as supporting many of the recommendations made by the Medicare Payment Advisory Commission (MedPAC), which advised Congress to replace the current formula with one that better accounts for physicians' costs, new technology, and the age and health status of the patient population being served. CMA feels that indicators, such as the Medical Economic Index, would be more appropriate. At the time of writing this message, I am hopeful that our legislators will listen. Dr. Staggers stated the problem succinctly when he said in the CMA Alert, "There are so many physicians in California right now in solo practice and larger groups who can barely pay their staffs. Most health plans in California set their reimbursement rates at 80% of Medicare, which means deeper cuts for us from every side. And this is hitting just when we overworked physicians are being called to take more time with ill patients to exercise extraordinary vigilance to help protect the public from bioterrorist-caused epidemics. We know the importance of that job. It's high time the government, both state and local, gives us the means to do it." Our patients are also feeling the strain. Some insurance companies are withdrawing from Medicare HMO participation, and those staying in the market are imposing large copayments. One of my patients called to tell me that she received a letter from her insurance informing her that her copay for each dialysis treatment is $100, and another patient told me that his copay is $50 for each dialysis treatment. We have also received TAR (treatment authorization requests) from Medi-Cal approving dialysis treatments but denying authorization for Erythropoietin and dexferrum which are both essential part of therapy to maintain hemoglobin levels and reduce morbidity and mortality of our patients. In a recent conversation about our employee insurance, Ted Fisher of Seabury and Smith said that, beginning January 2001, the premiums and copayments will increase for all the plans. One of my employees came to me and told me that her wage increase is not keeping up with the cost of living. How is it that on the one hand our cost of doing business and insuring for health is increasing yet physician payments are constantly decreasing? Please call or write your congressional representatives and tell them
that physicians are extremely upset. Congress responded to complaints
of inadequate payment rates from managed care plans by providing additional
funding. We physicians, who are faced with real cuts, must also be provided
payment rates that reflect the costs to provide access to quality care
for our senior patients. For additional information, contact the CMA
Reimbursement Hotline, 888-401-5911. |
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January
is usually a bright time as we look forward to what the New Year will
bring. However, just as I closed my doors on the past year, a black
cloud blew in bearing ominous news and immediately dampened my optimism
for 2002. Like you, I was dismayed to hear Thomas Scully, administrator
of the Center for Medicare and Medicaid Services (CMS), announce that
Medicare Physician Payment Rate was decreased by 5.4 percent. The decrease,
which became effective on January 1 of this year, is a significant reduction
for California physicians. It will force many to discontinue their participation
in the Medicare program and interfere with our elderly patients' access
to care.
