Call to action
Tell HCFA: Practice expense payments need to be truly resource-based
Last year, the Health Care Financing Administration proposed a way to pay physicians for their resource-based practice expenses. Unfortunately, last month HCFA dropped its 1997 Medicare proposal and issued a poor substitute.
Shifting sands of HCFA proposals
How changes in practice expense payments may affect overall Medicare payments
Specialty June 1997 proposal* June 1998 proposal* Family practice
General practice
Obstetrics/gynecology
Internal medicine
Emergency medicine
Neurosurgery
Thoracic surgery
Cardiac surgery12%
9%
4%
3%
-2%
-21%
-28%
-32%6%
3%
5%
1%
-13%
-10%
-13%
-14%
* Percentage changes from 1997 payments, using the "bottom-up" approach.
** Percentage changes from 1998 payments, using the "top-down" approach. These changes incorporate the "down payment" whereby primary care providers are receiving an advance on gains expected under full implementation of changes related to resource-based practice expenses.
The Academy is concerned and asks you to take action.
First, some background. In 1994, Congress asked HCFA to develop a way to pay physicians for their resource-based practice expenses -- real costs for equipment, administrative overhead, staff -- instead of paying for practice expenses based on physicians' traditional charges for services.
HCFA's 1997 proposal appropriately went "from the bottom, up" in estimating actual costs. It projected substantial increases for primary care services and sizable cuts for other services (see the chart). By law, the changes must maintain budget neutrality.
To moderate the increases and decreases, on June 5 HCFA published a new proposal in the Federal Register. It operates "from the top, down" in setting practice expenses based on total current practice costs. The new proposal extends inequities in traditional fees and is similar to one proposed by subspecialty groups fighting the 1997 proposal.
Here's an example of the imbalance in the 1998 proposal: A family physician would have to conduct 40 mid-level, established-patient office visits to generate the same practice expense payments as a cardiac surgeon performing one coronary bypass surgery with three venous grafts. The surgeon's payment is high, even though the hospital bears most practice expenses associated with the surgery.
Time to act: The new proposal ignores Congress' directive for covering resource-based practice expenses. The Academy asks you to join it in calling HCFA to task. Here's how:
- If you wish, read the new proposal at www.access.gpo.gov online or in the June 5 Federal Register in your local library.
- Read sample letters the Academy has drafted, available at www.aafp.org/gov online. (Available to AAFP members only, AAFP ID number required.)
- Write your own letter to HCFA, Department of Health and Human Services, Att.: HCFA-1006-P, P.O. Box 26688, Baltimore, Md. 21207-0488. Note that resource costs for evaluating and managing many types of illnesses may well exceed costs for subspecialty care.
- Send your members of Congress a copy of your letter.
FP Report is published by the AAFP News Department. Copyright © 1998 by American Academy of Family Physicians.