AMA Ad Campaign Targets Medicare Payment Formula
The American Medical Association has opened an advertising campaign to convince Congress to reform what it calls a “flawed” Medicare physician payment formula.
The answer: “Bad News for America’s Seniors.”
Yank D. Coble Jr., M.D., the immediate past president of the AMA, explained that under the current formula, physicians are penalized if services to Medicare patients grow more rapidly than the nation’s gross domestic product.
“At times of slow economic growth, it is likely that Medicare spending on physician services will exceed the target and trigger cuts in physician payments,” Coble said. “But the health care needs of America’s seniors don’t change with the ups and downs of the U.S. economy. Patients and physicians lose under a formula that cuts Medicare payments when the overall economy slows and when more health care services are provided to seniors.”
Payments Could Plummet
He added, “Unless we change the physician payment formula, Medicare payments will continue to plummet, making it more difficult for our nation’s seniors to get the health care they need and deserve.”
Earlier this year, the Centers for Medicare and Medicaid Services (CMS) predicted that Medicare physician payments will likely be cut by 4.2 percent in January 2004.
But Coble noted that Congress’s own Medicare advisory committee, MedPAC, has recommended that physicians get a 2.5 percent increase instead of a 4.2 percent cut in 2004 and that Congress replace the current Medicare payment formula.
Michael Strazzella, deputy director for congressional relations in APA’s Division of Government Relations, told Psychiatric News that APA is “extremely supportive” of the AMA’s campaign and is backing adoption of provisions in the House of Representative’s Medicare prescription drug bill that would amend the payment formula.
Those provisions would increase the Medicare fee schedule by at least 1.5 percent, Strazzella said.
“The administration needs to understand that this is not a matter of physicians lining their pockets, but an issue of patient access,” Strazzella said. “If physicians are not appropriately reimbursed, they will not be able to serve their patients.”
CMS Backs Out
In related news, the CMS has cancelled plans to make automatic adjustments on claims for physician services that were provided in January and February 2003, but not paid for until after March 1.
According to the AMA, the adjustments were intended to rectify inaccurate payments stemming from computer errors that prevented carriers from varying payment according to whether a service was provided before or after payment changes took effect on March 1. Millions of claims were involved, and many physicians could have been hit with overpayment demands that required restitution to both Medicare and individual patients, according to the AMA.
Data from one multistate insurance carrier indicated that about 250,000 claims and 100,000 beneficiaries per state could have been affected. Carrier computers were incapable of handling the overload, and it was estimated that adjustments would take up to a year to complete.
A June 26 notice from the CMS canceled the plans for automatic adjustments and called for adjustments only if the physician brings a claim to the Medicare carriers’ attention. In effect, physicians can seek adjustments for underpayments and avoid adjustments for overpayments.
CMS expects this approach to increase Medicare expenditures by $50 million in 2003, according to the AMA. ▪
