Legislative Update From SAGES

Medicare Physician Reimbursement Update

In June 2002, the House passed a Medicare prescription benefit and reform package that also included $30B in health care provider payments including physician fee increases. However, the Senate failed to reach agreement at adjournment in October. Unless Congress acts in January 2003, payments to physicians will be cut by 4.4% in 2003. This will be in addition to the 5.4% reduction that occurred in 2002, and the further 7.6% reduction scheduled for 2004 through 2005. Add it up, that's in the range of a 17.4% reduction in physician payments over 4 years!! [It may be of interest that at the same time, Congress authorized a 3.1 percent pay raise for themselves for next year, a total increase of 13.2% since 1999.]

The implementation of this cut, originally set for January 1, 2003, has been delayed until March 1, 2003 because of the late ruling.

The cause of this reduction is based upon what has been termed a flawed formula for the physician fee conversion factor. CMS says that this can only be changed by Congress.

Resources:

The December 20, 2002 announcement from The Centers for Medicare & Medicaid Services (CMS) is at:

http://www.cms.gov/media/press/release.asp?Counter=671

The actual final rule is due to be published in the December 31, 2002 Federal Register.

To review, go to http://www.access.gpo.gov/su_docs/aces/aces140.html

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