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

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Medicare bill must address physician pay, other issues

ACP has been urging Congress to make sure that Medicare reform legislation does not hurt access to care

From the September ACP Observer, copyright 2003 by the American College of Physicians.

Throughout the summer, ACP officials have urged Congressional leaders working on Medicare reform legislation to draft a bill that will benefit both physicians and patients.

In a series of letters and statements to legislators, the College has focused on issues including physician pay and regulatory requirements. House and Senate leaders have been working to reconcile House and Senate Medicare reform bills that would in part establish a $400 billion prescription drug benefit for Medicare beneficiaries.

ACP officials have argued that if Medicare pay for physicians continues to fall and new administrative requirements are introduced, fewer internists will participate in the program. As a result, access to care will suffer.

Here is an overview of the points the College has raised:

  • Physician pay. The House version of the Medicare bill (H.R. 1) would raise physician pay by at least 1.5% annually in 2004 and 2005. The Senate version of the bill (S. 1), however, does not include provisions to halt a 4.2% cut in physician payments that will occur because of Medicare's flawed reimbursement update formula. (The Senate bill proposes raising payments for physicians in under-reimbursed locations.)

    A July analysis from the College pointed out under the Senate bill, solo general internists will lose just over $3,500 over the next two years. Internal medicine practices with four physicians will lose just over $14,000 during the same period.

    Under the House bill, by comparison, solo general internists will see their Medicare pay increase by just over $1,800 over the next two years. A four-person internal medicine practice would see its Medicare reimbursement go up by nearly $7,300 during that same period.

    The College has repeatedly warned lawmakers that significant drops in Medicare reimbursement will reduce access to care. In a 2002 survey conducted by the AMA, for example, 42% of respondents said such a drop would force them to stop accepting Medicare patients.

    Medicare calculates its reimbursement rates using a formula that links physician pay to growth in the general economy. For years, ACP has argued that this methodology is flawed and must be changed.

  • Regulatory relief. ACP supports language in both the House and Senate bills that will let providers rely on guidance that Medicare carriers provide; require carriers to respond to physician queries in writing within 45 days; and offer repayment plans for inappropriate charges to physicians in cases of hardship.

    Significant differences between the two bills remain, however. ACP supports language in the House bill that will give physicians up to five years in cases of extreme hardship. The Senate bill will give physicians repayment plans of only three years.

    ACP also urged legislators to adopt House language on the common practice of extrapolating billing and coding problems. While the House bill flatly prohibits Medicare carriers from using extrapolation to calculate fines and penalties, the Senate bill does not bar the practice. It instead changes the methods that payers can use to extrapolate billing problems.

  • Coding system. ACP is concerned about a provision in the House bill that will let the Centers for Medicare and Medicaid Services (CMS) require physicians to use the ICD-10-PCS coding system.

    The College said the move will create an enormous burden for physicians, particularly internists. Physicians will have to buy expensive coding software to use the new system, offsetting any financial gain physicians will see from other regulatory relief provisions.

    ACP also pointed out that because ICD-10-PCS contains approximately 170,000 codes, the potential for coding and billing mistakes and errors will increase greatly.

  • Electronic prescribing. The College is concerned about a requirement in the House bill to require physicians to begin writing and submitting prescriptions electronically by 2006. While ACP supports electronic prescribing, College officials say that rushing its development and implementation will do more harm than good.

    In a letter, ACP said that there must be sufficient time for development, implementation and testing of e-prescribing technology. The College also warned that e-prescribing must not become another unfunded mandate on economically strapped physician practices.

The College's letters and statements about Medicare reform legislation are online.

To contact your legislators to comment on these aspects of Medicare reform, go to ACP's Legislative Action Center. You'll find a sample letter on the site that you can send as is or modify. You can also contact your Senators through the ACP Grassroots Hotline at 888-218-7770.

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