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Halting Medicare cut top item on legislative agenda

From the March ACP-ASIM Observer, copyright 2002 by the American College of Physicians-American Society of Internal Medicine.

By William Hoffman

WASHINGTON—At a media briefing on health policy issues earlier this year, ACP-ASIM officials said they will work to convince Congress to rescind the 5.4% cut in Medicare physician reimbursements that took effect Jan. 1.

"It's obviously very difficult to reverse a cut once it has gone into effect," acknowledged Robert B. Doherty, ACP-ASIM's Senior Vice President for Governmental Affairs and Public Policy. He predicted, however, that once physicians start to feel the impact of the cut, legislators will feel some pressure.

"Many unhappy physicians will be calling members of Congress this election year asking, 'How did this happen and what are you going to do about it?' " Mr. Doherty said. "That political pressure, along with lobbying and coalition building in Washington, could effectively halt the reduction." Mr. Doherty and other College officials talked to reporters on Jan. 15 at the National Press Club.

Mr. Doherty noted that Sen. James M. Jeffords (I-Vt.) plans to introduce legislation that would restore the Medicare reimbursement cut, but the bill would apply only to payments made after the legislation passed. Mr. Doherty explained that by not asking Medicare to restore the pay cut retroactively to Jan. 1, ACP-ASIM hopes to reduce the impact on the federal budget.

Flawed budget model

ACP-ASIM will also lobby hard this year to replace the sustainable growth rate (SGR) formula that the government uses to update the Medicare physician fee schedule each year.

The SGR formula keeps health care costs in check by linking changes in physician pay to the gross domestic product. Health care providers have long complained, however, that the formula fails to reflect the increased costs of treating an aging population and deploying new technologies.

"Pegging physicians' reimbursement to how well the economy is doing never made sense to us," Mr. Doherty said. "We told Congress that back in 1997."

ACP-ASIM President William J. Hall, FACP, said a better system might focus on identifying excess usage by comparing physicians' costs to those of their colleagues. To do that, government officials could measure physicians' use of hospital care, office visits and other measures. While he acknowledged that physicians might not like such a system, they would at least understand it better than the current formula, which is based on factors over which doctors have no control.

The main goal, Mr. Doherty explained, is to create a reliably fair formula that keeps pace with actual costs of care. "What we're seeking is predictability," he said.

Regulatory relief

ACP-ASIM will work to convince the Senate to pass its version of a regulatory relief bill approved unanimously late last year by the House of Representatives.

Dr. Hall explained that many internists complain that Medicare's documentation requirements for evaluation and management (E/M) services are excessively complex and confusing. "When I bill Medicare for any sort of office visit, I have to go through a decision analysis that looks at 11 potential levels of care with 42 modifiers," he said. "This means that 6,000 possibilities present themselves for every office visit."

The House bill would require Medicare carriers to provide written clarification of regulations when requested. Payers would also have to honor those clarifications during an audit.

Mr. Doherty said that the Senate version of regulatory relief legislation fails to address physician concerns about Medicare documentation guidelines for E/M services. ACP-ASIM supports new pilot projects that would determine the viability of changing those guidelines.

Dr. Hall added that the College is also concerned about Medicare audits. "An audit can be done based on a tiny sample of office records—as few as two dozen—and extrapolated on the assumption that this is the way the physician treats a wide range of patients over a long period of time," he explained. The House bill would limit this practice.

Ambitious agenda

Dr. Hall outlined ACP-ASIM's other public policy goals for the year, which he acknowledged are ambitious. The College hopes to convince legislators to expand access to care, prepare for bioterrorism, pass a patient bill of rights, give Medicare beneficiaries prescription drug coverage and implement a voluntary medical error reporting system.

Mr. Doherty and Dr. Hall acknowledged that some of those goals will have to be achieved in installments. Next month, for example, ACP-ASIM plans to unveil a seven-year plan to expand health insurance coverage to all Americans.

William Hoffman is a freelance writer in Fairfax, Va.

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