American College of Physicians: Internal Medicine — Doctors for Adults ®

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College files amicus brief over practice expenses

The College opposes a law suit attacking HCFA's reimbursement of physician expenses

From the February 1999 ACP-ASIM Observer, copyright © 1999 by the American College of Physicians-American Society of Internal Medicine.

On Jan. 4, ACP-ASIM joined four other medical societies and submitted an amicus curiae brief supporting HCFA's methods of calculating reimbursements for practice expenses.

In November, 11 specialty societies filed a lawsuit challenging HCFA's 1999 Medicare physician fee schedule. In 1998, HCFA increased payments for office-visit practice expenses by about $330 million, an amount known as the primary care "down payment." At the same time, HCFA reduced payments for overvalued subspecialty procedures. HCFA made these adjustments in an effort to move toward a resource-based system for practice expenses. Historically, Medicare has paid for practice expenses based on what physicians charge, not actual costs.

In creating its 1999 fee schedule, HCFA used the primary care down payment to calculate the new practice expense relative value units (PE-RVUs), which potentially determine overall physician reimbursement. The 11 groups filing suit, however, want HCFA to calculate the 1999 PE-RVUs using data that do not reflect the primary care down payment. Using older data to create the new PE-RVUs would result in lower reimbursements for office visits and higher pay for inpatient surgical procedures.

HCFA has argued that using older data to calculate 1999 PE-RVUs would cause a "ping-pong" effect: Procedures that received lower payment in 1998 would receive higher payments in 1999 and then lower payments in following years as HCFA makes the transition to a resource-based system of paying for practice expenses.

In the amicus brief, ACP-ASIM and the four other medical societies—the American Academy of Family Physicians, the American Academy of Pediatrics, the American College of Rheumatology and the Renal Physicians Association—argue that using older data to determine the 1999 PE-RVUs will reduce access for Medicare beneficiaries by raising surgical fees and co-payments.

The amicus brief also points out that if HCFA is forced to change PE-RVUs in the middle of the year, it will have to recalculate the payments that have already been made to physicians in 1999. The amicus brief also argues that if the PE-RVUs are changed, HCFA could be forced to demand refunds from physicians whose practice expense payments for office visits were too high. Such an action, the brief says, would "severely hinder Medicare operations and be disruptive for all physicians."

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