March 2002 • Volume 8 • Number 3 |
Physicians' Medicare payments are stirring controversy, and you may already have received lower payments than last year.
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The Academy is continuing to fight a cut that took effect Jan. 1: the 5.4 percent cut in the Medicare conversion factor, a multiplier used to convert relative value units (for services) into payments for services.
The dramatic decrease has physicians, including FPs, up in arms. In December, Congress required the Medicare Payment Advisory Commission to report to Congress on the conversion factor problems by March 1. MedPAC already issued three recommendations expected to guide its report. One of the three: Hike the conversion factor by 2.5 percent for 2003.
Even though your Medicare payments may be slipping, it's likely you're not seeing a full 5.4 percent drop in your Medicare reimbursement. Why? At least in part because the Academy championed resource-based practice expenses, a Medicare payment element that reached its full effect Jan. 1.
"The changes related to practice expenses reflect previous congressional action to correct long-standing inequities in physician payment in moving to a resource-based approach, and the Academy helped spur that action," says AAFP President Warren Jones, M.D., of Ridgeland, Miss.
Your lawmakers will soon study MedPAC's report and wrestle with suggestions for the conversion factor. "Our contacts with Congress now will increase our chances for ending the conversion factor chaos," says Jones.
Bottom lines. The Centers for Medicare and Medicaid Services projected a 3 percent drop in family practice payments because of the 5.4 percent cut in the conversion factor (see Table 1). The average change forecasted for all physicians was a 5 percent drop. Because Medicare payments are adjusted geographically, the pay rate differs across the country.
Table 2 shows payment changes for family physicians' three most commonly used codes, with the most-often-used code listed first. "The relative frequency of the use of these three codes, as well as other codes, will dictate the impact of the 2002 payment rates on the average family physician," says Jerome Connolly, senior government relations representative in the AAFP Government Relations Division. "I believe the net effect of changes for these three codes will be a reimbursement rate that's pretty close to the one family physicians received in 2001 for these codes."
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AAFP efforts this year. The Academy is taking a lead role in a coalition of health professional groups seeking to correct the conversion factor problems. Coalition activities include:
Sustainable growth rate. The formula for annually updating the conversion factor is governed by the sustainable growth rate, a mechanism intended to control spending on Part B services. The SGR is tied to changes in the gross domestic product: When the economy slumps, Medicare payments to physicians are decreased. The SGR also requires payments for a coming year to take into account past errors in GDP estimates.
MedPAC's advice. MedPAC is asking Congress to:
Your input. A summary of some of the above information is available at http://capitol.aafp.org -- AAFP's Speak Out: Legislative Action Center -- by clicking on "Action Alert!" To e-mail your lawmakers and ask for a congressional remedy to the conversion factor problems, go to the site's "Take Action Now" box, enter your ZIP code, and click on "GO!" Select the letter "Medicare Physician Fee Update," and add your own comments.
"Explain how a reduction in the conversion factor and Medicare payment rates is affecting your practice," Jones suggests. "Tell what difficult financial and business decisions you may feel compelled to make as a result. If you have stopped accepting new Medicare patients or expect to do so, be sure to let your lawmakers know that."
He adds, "Your help is important. Given the deficit budget proposed by the administration, getting Congress to enact MedPAC's recommendations will represent a difficult challenge."
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Copyright © 2002 by
American Academy of Family Physicians.