Medicare Cuts Denied

Physician's Money Digest, March31 2003, Volume 10, Issue 6

Efforts to roll back a scheduled cutin Medicare reimbursements to USphysicians met with more success thaneven the most optimistic had hopedfor. Under the provisions ofthe spending bill thatPresident Bush signed inFebruary, the Centers forMedicare and Medicaid Services (CMS)can correct errors in the complex formulaused to figure physician reimbursementupdates, which is based onthe estimated gross domestic product,without fear of being sued. The resultof the corrections will be a 1.6%increase in Medicare payments to doctorsin 2003, instead of the 4.4% cutthat had been scheduled. Medicarereimbursements for doctors werechopped by 5.4% in 2002.

The final bill scrapped the USSenate solution to the problem, whichwas to freeze Medicare payments attheir 2002 levels. Instead, the bill goesto the heart of the problem by reworkingthe formula used to calculate payments.The Congressional Budget Of-fice has estimated this long-term fixwill cost the government $54 billionover 10 years. Meanwhile, the AmericanMedical Association hailed the billas a step toward ensuring that seniorshave continued access tocare. Nearly 1 in 3 US doctorsare reportedly reducingor eliminating careof new Medicare patients because ofthe reimbursement cuts.

Correcting the errors in the reimbursementformula may not be enoughto avoid a cut in Medicare payments for2004, government officials warned, althoughthe cut should be less than theone that was narrowly avoided thisyear. Doctor groups, including theAmerican College of Physicians and theAmerican Society of Internal Medicine,are looking for sweeping changes inhow the government determines updatesin Medicare payments each year,and have pledged to work with theCMS to come up with formula changesthat would allow Medicare payments tokeep up with medical practice expenses.