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


Medicare fee schedule

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

Medicare is giving physicians an across-the-board pay increase of roughly 5% for the year 2000.

HCFA's new fee schedule, which takes effect on Jan. 1, raises the Medicare conversion factor from $34.73 to $36.61. HCFA applies the conversion factor to relative value units to determine physician pay.

That raise will be tempered for some specialties by HCFA's transition to resource-based practice expense payments, which pays physicians based on their relative actual costs. In the past, Medicare has paid physicians based on historic charges, which has typically favored proceduralists.

Medicare will phase in resource-based payments for practice expenses during the next two years, a move that will produce large pay decreases for specialties like cardiology (-5.4%) and gastroenterology (-8.55%) in 2002. Internal medicine is expected to see a 1% increase in 2002.

Medicare will next year begin using resource-based payments for physician liability insurance, but those changes are expected to produce negligible changes in physician pay. Reimbursements for internists, for example, will rise by only 0.0015%.

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