Government

Senators urge CMS to review assumptions on physician payment

NEWS IN BRIEF — Posted June 14, 2004

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Sens. Charles Grassley (R, Iowa) and Max Baucus (D, Mont.) have urged the Bush administration to consider the ripple effect of the Medicare reform bill in calculating the physician payment update.

The new prescription drug benefit will significantly increase physician services as beneficiaries who previously could not afford medications now visit physicians to seek prescriptions, the senators said in a letter to the Centers for Medicare & Medicaid Services. In addition, the new preventive Medicare benefits, including cardiovascular screening, diabetes screening and an initial physical, are likely to lead to greater use of physician services, they said.

Under the Medicare physician payment formula, CMS must estimate the impact of new legislation on physician spending to set an annual spending target. If spending exceeds that target, pay in future years is reduced. Underestimating the impact of legislation makes it more likely that physician spending will exceed the target.

The letter said current projections indicate that physicians will not see a positive Medicare update until 2014, at which point payments would be almost 40% lower than in 2005.

"We must work together to repair the sustainable growth rate payment formula," the senators said.

Note: This item originally appeared at http://www.ama-assn.org/amednews/2004/06/14/gvbf0614.htm.

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