February 2002 • Volume 8 • Number 2 |
 Family physicians are answering patienInadequate payment has forced Baretta Casey, M.D., to raid her personal savings to subsidize her Pikeville, Ky., family practice. See story, "Message to CMS: Low pay kills practices." |
The year 2002 could be financially draining for many family physicians and other primary care providers, especially those caring for many Medicare patients. The largest-ever annual cut in the conversion factor used to set the Medicare reimbursement rate -- a 5.4 percent cut -- went into effect Jan. 1.
And as the year progresses, health care costs will rise, said AAFP Board Chair Richard Roberts, M.D., J.D., of Madison, Wis., as new technology emerges and demand for services increases. "Combine that with the cut, and doctors will suffer financially first," he said, noting that 20 percent of the average FP's patients rely on Medicare.
"So physicians will have to choose between not providing Medicare service, not providing the medical technology or not getting adequate payment for the service," Roberts said. "And in some cases, it will get to the point where doctors can't make it financially."
Then the country's older population will be hit, he said, because fewer physicians will accept Medicare patients -- especially in underserved, rural regions. "CMS isn't going to see anything dramatic in the short term," said Roberts. "But all this will happen. Practices will close, and patients won't have health care."
On Nov. 1, CMS announced the 5.4 percent cut in the conversion factor, a multiplier that translates relative value units into Medicare fees. The RVUs pertain to practice expenses, the physician's work and liability insurance costs. As of Jan. 1, the final increase for resource-based practice expenses took effect. That increase will somewhat offset the drop in the conversion factor for most FPs. The Academy's prior victory in defending RBPE will soften the blow from the cut in the conversion factor, said Roberts.
The AAFP went into action in early November to try to fix the immediate problem -- the conversion factor decrease. "We were not able to turn back the tide on that. The legislation we were behind was in place, and the legislators' support was there. But Congress didn't act," said Roberts.
Using the AAFP's Speak Out: Legislative Action Center, more than 7,000 members urged lawmakers to vote for two bills (S. 1707 and H.R. 3351) that would have decreased the conversion factor by only 0.9 percent and insisted on a revised formula for determining payment shifts.
While efforts to stop the 5.4 percent cut in the conversion factor failed, Congress did order the Medicare Payment Advisory Commission to report to Congress by March 1 on revising the formula. The formula's major flaw, according to medical groups, is its reliance on the nation's gross domestic product to determine whether reimbursement rates will increase or decrease each year.
"I really appreciate members' efforts," Roberts said. "It's true: We did not win this battle. But the war is not over. Fair physician reimbursement is the war, and members' sustained efforts will help us win the war."
How? The Academy plans to work with MedPAC and CMS to get the formula quickly corrected, Roberts said.
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Copyright © 2002 by
American Academy of Family Physicians.