June 2000 • Volume 6 • Number 6
Judge preserves primary care gains, dismisses lawsuit
A judge's action April 14 maintains the 2000-01 shift of about $495 million from Medicare payments for hospital-based services to payments for office-based services.
Chalk one up for primary care.
Judge Ann Williams dismissed a lawsuit that sought to make the base year 1991 or 1997, instead of 1998, for calculating Medicare payments for practice expenses.
In 1998, primary care received a $330 million "down payment" on resource-based practice expenses. Formerly, Medicare covered practice expenses according to historical charges, which favored hospital-based services. The new resource-based system better reflects costs for expenses such as staff, equipment and overhead.
Because Medicare fee changes must be budget neutral, more pay for some services means less for others. On Nov. 2, 1998, the Health Care Financing Administration proposed 1998 as the base year for the gradual transition to full RBPE implementation by Jan. 1, 2002. Eleven subspecialty groups objected to 1998 as the base year, suing Donna Shalala, Ph.D., secretary of the Department of Health and Human Services. The Academy and the American College of Physicians-American Society of Internal Medicine led office-based societies in supporting HCFA with an amicus brief.
"The judge's decision is a big victory for family medicine," says AAFP Board Chair Lanny Copeland, M.D., of Albany, Ga. "The court confirmed what Congress has intended all along: a fair transition to higher pay for primary care."
Williams dismissed the case on a technical issue, saying the law precludes judicial review of relative value units in the Medicare fee structure. She also criticized the merits of the case and defended Shalala. "The (RBPE) transition formula used was a reasonable interpretation of an unclear statute and is, therefore, not (as the suit charged) arbitrary, capricious, an abuse of discretion or contrary to law," Williams said in her ruling for the U.S. District Court for the Northern District of Illinois, Eastern Division.
Family physicians' Medicare income will be about 2 percent higher in 2000 and another 2 percent higher in 2001 than it would have been if the subspecialists' suit had succeeded.
FP Report is published by the AAFP News Department.
Copyright © 2000 by American Academy of Family Physicians.
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