I t’s no surprise that your expenses and overhead keep going up, up, up year after year. And, it’s also no surprise that the amount of reimbursement from Medicare keeps going down, down, down. Within the last 9 years, Medicare reimbursement rates, or lack thereof, have fluctuated from as low as -4.8% to as high as 5.5%, according to the Centers for Medicare & Medicaid Services. If things continue to head the same way they are now, then by the year 2013, physicians will receive 30% less money than they did in 2005 from Medicare, according to a statement from the Alliance of Specialty Medicine. Things could change for the better if new proposed legislation is passed. Potentially, physicians might be left with a plan that would not merely offer a band-aid solution, as many times has happened in the past. What Would be Different Two bills have been proposed, one by the U.S. House of Representatives and the other by the U.S. Senate. Both call for an increase in physician reimbursement by 2.7%, which is the level of reimbursement recommended by the Medicare Payment Advisory Commission. Both bills also offer what are deemed as permanent fixes to the reimbursement formula shortfalls, but the bills specify different methods of change. Here’s how they differ: • The House bill proposes that beginning in 2007, the current reimbursement formula would be replaced by a new calculation method that would take into account the rising cost of providing care. In addition, the new formula would take into account increases in physician efficiency. • The Senate bill is proposing to tie physician reimbursement each year to the Medicare Economic Index (MEI), which would not mean a permanent change to the current payment formula. However, since the MEI measures changes in costs faced by physicians, it offers a potentially less erratic system for reimbursement. For example, over the last 9 years, percentage increases ranged from as low as 2% to a high of 3.1%, with an average of 2.5%. So, for example, the proposed increase for 2006 would be about 2.6%. However, this bill offers no adjustments to reimbursements after 2007 when physicians will be faced with steep cuts. The Alliance of Specialty Medicine, which is a non-partisan group that represents more than 200,000 people in 12 medical specialties and is committed to developing healthcare policies that aim to provide greater patient access to care (www.specialtydocs.org), has proposed two fixes for the formula: 1. The group recommends removing Medicare-covered outpatient drugs and other incident-to services from the costs attributed to physicians. 2. They also advocate repealing the current formula (sustainable growth rate formula) and switching to the MEI to determine yearly reimbursement rates. Clearly, a new plan is needed before Jan. 1, 2006, in order to sidestep a -4.3% cut in reimbursement from Medicare and approximately 5% in cuts each year after that until 2013. Larisa Hubbs Executive Editor lhubbs@hmpcommunications.com
Medicare Reimbursement: Time for a Raise?
I t’s no surprise that your expenses and overhead keep going up, up, up year after year. And, it’s also no surprise that the amount of reimbursement from Medicare keeps going down, down, down. Within the last 9 years, Medicare reimbursement rates, or lack thereof, have fluctuated from as low as -4.8% to as high as 5.5%, according to the Centers for Medicare & Medicaid Services. If things continue to head the same way they are now, then by the year 2013, physicians will receive 30% less money than they did in 2005 from Medicare, according to a statement from the Alliance of Specialty Medicine. Things could change for the better if new proposed legislation is passed. Potentially, physicians might be left with a plan that would not merely offer a band-aid solution, as many times has happened in the past. What Would be Different Two bills have been proposed, one by the U.S. House of Representatives and the other by the U.S. Senate. Both call for an increase in physician reimbursement by 2.7%, which is the level of reimbursement recommended by the Medicare Payment Advisory Commission. Both bills also offer what are deemed as permanent fixes to the reimbursement formula shortfalls, but the bills specify different methods of change. Here’s how they differ: • The House bill proposes that beginning in 2007, the current reimbursement formula would be replaced by a new calculation method that would take into account the rising cost of providing care. In addition, the new formula would take into account increases in physician efficiency. • The Senate bill is proposing to tie physician reimbursement each year to the Medicare Economic Index (MEI), which would not mean a permanent change to the current payment formula. However, since the MEI measures changes in costs faced by physicians, it offers a potentially less erratic system for reimbursement. For example, over the last 9 years, percentage increases ranged from as low as 2% to a high of 3.1%, with an average of 2.5%. So, for example, the proposed increase for 2006 would be about 2.6%. However, this bill offers no adjustments to reimbursements after 2007 when physicians will be faced with steep cuts. The Alliance of Specialty Medicine, which is a non-partisan group that represents more than 200,000 people in 12 medical specialties and is committed to developing healthcare policies that aim to provide greater patient access to care (www.specialtydocs.org), has proposed two fixes for the formula: 1. The group recommends removing Medicare-covered outpatient drugs and other incident-to services from the costs attributed to physicians. 2. They also advocate repealing the current formula (sustainable growth rate formula) and switching to the MEI to determine yearly reimbursement rates. Clearly, a new plan is needed before Jan. 1, 2006, in order to sidestep a -4.3% cut in reimbursement from Medicare and approximately 5% in cuts each year after that until 2013. Larisa Hubbs Executive Editor lhubbs@hmpcommunications.com
I t’s no surprise that your expenses and overhead keep going up, up, up year after year. And, it’s also no surprise that the amount of reimbursement from Medicare keeps going down, down, down. Within the last 9 years, Medicare reimbursement rates, or lack thereof, have fluctuated from as low as -4.8% to as high as 5.5%, according to the Centers for Medicare & Medicaid Services. If things continue to head the same way they are now, then by the year 2013, physicians will receive 30% less money than they did in 2005 from Medicare, according to a statement from the Alliance of Specialty Medicine. Things could change for the better if new proposed legislation is passed. Potentially, physicians might be left with a plan that would not merely offer a band-aid solution, as many times has happened in the past. What Would be Different Two bills have been proposed, one by the U.S. House of Representatives and the other by the U.S. Senate. Both call for an increase in physician reimbursement by 2.7%, which is the level of reimbursement recommended by the Medicare Payment Advisory Commission. Both bills also offer what are deemed as permanent fixes to the reimbursement formula shortfalls, but the bills specify different methods of change. Here’s how they differ: • The House bill proposes that beginning in 2007, the current reimbursement formula would be replaced by a new calculation method that would take into account the rising cost of providing care. In addition, the new formula would take into account increases in physician efficiency. • The Senate bill is proposing to tie physician reimbursement each year to the Medicare Economic Index (MEI), which would not mean a permanent change to the current payment formula. However, since the MEI measures changes in costs faced by physicians, it offers a potentially less erratic system for reimbursement. For example, over the last 9 years, percentage increases ranged from as low as 2% to a high of 3.1%, with an average of 2.5%. So, for example, the proposed increase for 2006 would be about 2.6%. However, this bill offers no adjustments to reimbursements after 2007 when physicians will be faced with steep cuts. The Alliance of Specialty Medicine, which is a non-partisan group that represents more than 200,000 people in 12 medical specialties and is committed to developing healthcare policies that aim to provide greater patient access to care (www.specialtydocs.org), has proposed two fixes for the formula: 1. The group recommends removing Medicare-covered outpatient drugs and other incident-to services from the costs attributed to physicians. 2. They also advocate repealing the current formula (sustainable growth rate formula) and switching to the MEI to determine yearly reimbursement rates. Clearly, a new plan is needed before Jan. 1, 2006, in order to sidestep a -4.3% cut in reimbursement from Medicare and approximately 5% in cuts each year after that until 2013. Larisa Hubbs Executive Editor lhubbs@hmpcommunications.com
