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

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New spending predictions may increase Medicare pay

Physicians may be getting a raise from Medicare in 2001.

From the May 2000 ACP-ASIM Observer, copyright © 2000 by the American College of Physicians-American Society of Internal Medicine.

HCFA has revised the estimates it uses to calculate growth in Medicare spending, which directly affect updates to the Medicare fee schedule. Until recently, HCFA had expected Medicare spending to rise 2.1% in 2000. If actual spending had risen more than that amount, as analysts expected, physician pay would have been hurt in 2001. HCFA now predicts that spending will rise 5.8%, which gives physicians a better chance of seeing an increase next year.

In revising its projections for 2000, HCFA acknowledged that it had miscalculated several factors, including the costs of new preventive services and changes in managed care enrollment.

The College and other medical groups have long argued that HCFA's methods to predict Medicare spending, which are used to create the sustainable growth rate, routinely underestimate spending increases and unfairly hurt physician pay.

While physician groups view HCFA's decision to revise this year's projections as a victory, they say that physicians were underpaid in 1998 and 1999 because the agency used flawed projections. ACP-ASIM is party to a lawsuit filed by several medical groups to recoup more than $3 billion in fees that they believe physicians should have been paid.

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