MedPAC Finds Medicare
Physician Payments Adequate to Assure Access for
Beneficiaries
Michael Scott, J.D., Director
Governmental and Legal Affairs
On March 1 the Medicare Payment Advisory Commission
(MedPAC), a quasi-governmental, nonpartisan advisory
body to Congress, issued its 2004 report recommending
a 2005 increase in physician reimbursement of an
amount equal to a projected 3.5-percent gain in
input prices offset by a 0.9-percent deemed increase
in physician productivity. Current law calls for
an increase of at least 1.5 percent in reimbursement,
even if such an update is not called for at year-end
by operation of the statutory update formula.
MedPAC’s report also concluded, following
analysis of a number of relevant factors, that a
2.6-percent increase would be adequate to maintain
beneficiary access to care and maintain physician
willingness and ability to furnish services.
Surveys of Medicare beneficiaries disclosed little
change in beneficiaries reporting difficulties in
obtaining an appointment or seeing a specialist
(less than 3 percent and 6 percent, respectively).
MedPAC also noted that the number of physicians
billing traditional Medicare from 1995-02 had well
outpaced the increase in the number of beneficiaries
and that physicians’ participation and assignment
rates were at the highest level ever in 2002. The
report suggested little change, based on various
surveys, of physicians’ willingness to accept
new Medicare beneficiaries.
Of particular interest to ASA members, MedPAC’s
analysis showed that in 2002, the gap between Medicare
reimbursement rates and those of private payers
decreased between 2001 and 2002 from 83 percent
to 81 percent. The MedPAC published data did not
disclose the 2002 gap by specialty; the most recent
ASA survey data showed that the Medicare anesthesia
conversion factor was less than 40 percent of that
paid on average by private insurers.
Growth in the overall volume of physician services
to Medicare beneficiaries was found to have been
5.6 percent from 2001 to 2002, contrasted with 5.4
percent and 4.3 percent, respectively, in 2000-01
and 1999-00. Of significance to anesthesiologists,
the volume of some surgical procedures — notably
coronary artery bypass grafting, hip fracture repair
and colectomy — decreased from 2001 to 2002.
In a related development, the Practicing Physicians
Advisory Council (PPAC) called upon the Centers
for Medicare & Medicaid Services (CMS) in late
February to engage in a series of adjustments calculated
to improve results generated by the statutory update
formula, including the exclusion from the formula
of physician-administered drugs. CMS has considered
and rejected this proposal in the recent past. More
broadly, PPAC and some of the witnesses appearing
before it expressed deep concern that, given action
of Congress to postpone the budgetary effect of
1.5-percent increases for 2004 and 2005, physicians
would face an impossibly steep cut in 2006 that
could threaten the viability of the Medicare Part
B program.
Of interest in this latter regard was the response
of Senate Budget Committee Chair Don Nickles (R-OK)
to a proposed “sense of the Senate”
amendment to the FY2004 budget resolution calling
for fundamental revisions to the Medicare statutory
update formula. Any such amendment, Senator Nickels
said, would be required to state that the revisions
would be budget-neutral, in essence rendering the
proposal moot. In the end, the resolution was adopted
absent the budget-neutrality restraint.
Senate
GOP Leaders Plan Liability Reform Votes
Following failure by a wide margin (48-45) to gain
the 60 votes necessary to invoke cloture on a bill
(S. 2061) designed to enact national liability limits
on the provision of obstetrical and gynecological
services, Senate GOP leaders declared their intent
to bring additional medical liability bills to the
Senate floor. These could possibly include a bill
dealing with emergency medical services or one that
combines emergency services with obstetrical services.
Although ASA supported passage of S. 2061 as a step
toward comprehensive liability reform, it expressed
reservations about the bill to its sponsors, Senators
Judd Gregg (R-NH) and John Ensign (R-NV). ASA’s
concern stemmed from the fact that the text of the
bill did not make clear that all physicians participating
in the obstetrical procedure would be protected
by the terms of the legislation. If an emergency
care bill is brought forward by the leadership,
ASA will pursue this issue, if necessary, with the
sponsors.
McClellan
Nominated as CMS Administrator
In late February, Mark B. McClellan, M.D., was nominated
by President Bush to become CMS administrator. Dr.
McClellan is currently Commissioner of the Food
and Drug Administration, a post he has held since
last November.
Although Dr. McClellan’s nomination was confirmed
by the Senate on March 12, substantial opposition
arose immediately after his nomination because of
his role in defining the administration’s
opposition to the importation of lower-cost prescription
drugs from Canada. Failure to include import authorization
in the recently passed Medicare bill has been a
continuing source of controversy, and several state
governors have lobbied Congress in favor of authorizing
legislation.
Dr. McClellan is well known to organized medicine,
having served both Presidents Clinton and Bush in
the White House on health-related matters. He is
expected to be the key administration figure responsible
for implementation of the expanded Medicare program
called for by last year’s legislation.
ASA Participates
in DEA Meetings
ASA President Roger W. Litwiller, M.D., was one
of three physicians representing organized medicine
in a meeting on February 26 with Karen Tandy, the
newly appointed Administrator of the federal Drug
Enforcement Administration (DEA), and members of
her senior staff. Also participating was Rebecca
J. Patchin, M.D., a pain management practitioner
and ASA member who was recently elected to the AMA
Board of Trustees.
The purpose of the meeting was to enhance dialogue
between the agency and pain management physicians
concerned about the impact on their practices of
aggressive enforcement of federal and state drug
diversion laws. Administrator Tandy has accepted
an invitation from Dr. Litwiller to address the
ASA Legislative Conference on May 2-4 as part of
DEA’s program to reach out to the physician
community and explain its policies.
More recently DEA announced its intent to increase
efforts to stem the flow of prescription drug abuse
both by assisting in the increase of state prescription
drug monitoring programs and by using new technology
to identify and prosecute Web site operators dispensing
drugs without a prescription.
On March 4 ASA also participated in a DEA meeting
called to discuss the feasibility of providing reputable
continuing education programs regarding the proper
use of opioids as part of the DEA registration process.
Representing ASA was John F. Dombrowski, M.D., a
Washington, D.C. pain practitioner who is currently
the District of Columbia member of the ASA Board
of Directors.
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