Medicare Fee Problems Persist

Physician's Money Digest, June15 2003, Volume 10, Issue 11

The bandage that Congress applied to the problemof falling Medicare fees last February isproving to be only a temporary fix. When thespending bill was passed, lawmakers thought theyhad permanently repaired the flaw in the formulathat's used to set annual Medicare reimbursementsto doctors. That formula, which is tied to thenation's gross domestic product, resulted in a 5.4%decline in Medicare payments in 2002 and had putanother 4.4% cut in fees into place for this year. Thechanges that Congress authorized not only turnedthat cut into a small increase (1.6%), but were supposedto offer a long-term solution to the problemby eliminating glitches in the formula. Not quite.

In a recent advisory, the Center for MedicareManagement now projects that Medicare fees fordoctors will be subject to cuts in each of the next4 years, with forecasts calling for a 4.2% cut nextyear. Without the recent congressional action, thecuts would have been far worse, Medicare officialssay, but the American Medical Association(AMA) says the revised estimates show that thereimbursement formula is "fatally flawed."AMAPresident Yank Coble Jr, MD, says that the healthcare needs of America's senior citizens don't riseand fall with the economy and noted that doctorscan avoid the fee cuts only by limiting or eliminatingthe care they provide to Medicare beneficiaries.About 90% of US physicians treatMedicare patients.