Passage of Omnibus Appropriations
Legislation Clears Way for 2.7-Percent Medicare Payment
Increase
Michael Scott, J.D., Director
Governmental and Legal Affairs
As most ASA members are by now aware, the recently
passed FY2003 Omnibus Appropriations bill provides
the mechanism for the Centers for Medicare & Medicaid
Services (CMS) to eliminate, in the case of anesthesia
providers, the previously projected 3.43-percent cut
in the Medicare 2003 conversion factor and substitute
an increase of about 2.7 percent effective March 1.
The congressional action culminates a yearlong effort
by House Ways and Means Committee Chair William M.
Thomas (R-CA) to persuade the Administration to eliminate
from the Medicare update formula the effect of two
major CMS estimation errors that occurred in 1998
and 1999. Specifically, the bill provides CMS with
protection against suit for retroactive reimbursement
claims in the event that CMS determines to make prospective
changes in the data used to calculate the update formula.
The Administration had for many months maintained
to Mr. Thomas and physician groups, including ASA,
that it did not have the statutory authority to make
these changes; the new provision eliminates the practical
problem of retroactivity, which the Administration
sought to avoid.
Prior to passage of the bill, CMS estimated that correction
of the estimation errors would result in a positive
update for 2003 of 1.6 percent for all physicians.
As of this writing, CMS has not yet issued a revised
regulation reflecting the change, but it is widely
expected to put the increase into effect as of March
1. Because CMS’ December 31, 2002, regulation
contains an increase in anesthesia work values amounting
to about an additional 1.6 percent, anesthesia providers
can anticipate a larger increase than other physicians.
After CMS’ negative adjustments related to practice
expenses and budget neutrality, the
net increase
in the anesthesia conversion factor should be about
2.7 percent, effective March 1. This increase represents
over $80 million more in payments to anesthesia providers
for the balance of 2003 over the amount that would
have been paid if Congress had not acted.
The congressional action represents a major legislative
victory for the American Medical Association (AMA),
which first raised the issue of the estimation errors
in late 1998. The victory is all the more remarkable
in light of the schism that developed between AMA
and GOP congressional leaders two years ago over the
issue of the proper approach to patient protection
legislation. Over the past year, AMA has worked closely
with a host of medical specialty organizations such
as ASA in an effort to present a united front on the
need for reform of the Medicare formula.
As soon as CMS has issued its revised regulation,
ASA members with e-mail capability will be notified
by blast e-mail, and the schedule of anesthesia conversion
factors by geographic payment area will be posted
on the ASA Web site.
Rep. Greenwood Introduces
Liability Reform Bill
Following through on the successful initiative he
fostered in the 107th Congress, Representative Jim
Greenwood introduced the Help Efficient, Accessible,
Low-Cost, Timely Healthcare Act (HEALTH) of 2003 (H.R.
5) on February 6. Virtually identical to its predecessor
that passed the House by a wide margin in 2002, the
HEALTH bill contains a number of provisions designed
to bring down the cost of professional liability insurance
nationwide.
Most noteworthy of the bill’s provisions is
a cap of $250,000 on noneconomic damages. Also included,
subject to certain exceptions, is a statute of limitations
for bringing suit of the shorter of three years after
manifestation of the injury or one year after discovery
by the claimant.
Additional provisions include elimination of joint
and several liability of multiple defendants, limitations
on attorney’s contingency fees, recognition
of the claimant’s collateral source benefits
and limitations on punitive damages to cases where
it is proven by clear and convincing evidence that
the defendant acted with malicious intent or deliberately
failed to avoid unnecessary injury. Punitive damages
would be capped at $250,000 or two times economic
damages, whichever is greater.
The HEALTH bill provides that its terms pre-empt state
law to the extent that state law would prevent application
of its terms but expressly does not pre-empt any provision
of state law that provides greater protections for
health care providers nor any state law that specifies
greater or lesser caps on compensatory or punitive
damages.
Hearings on the bill are expected soon in the Energy
and Commerce and Judiciary committees, and easy passage
by the House itself should occur in the spring. At
this writing, Senators John Ensign (R-NV) and Dianne
Feinstein (D-CA) are expected to introduce similar
bills in the Senate where their passage, in light
of past Senate experience, is considerably less certain.
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