Ways and Means Leadership
Calls on CMS to Resolve Physician Payment Problems
April 5, 2002 - In a March 21 letter
to Centers for Medicare and Medicaid Services (CMS) Administrator
Thomas Scully, Ways and Means Chairman Bill Thomas (R-Calif.)
and Subcommittee on Health Chairman Nancy Johnson (R-Conn.)
blame the agency's "questionable assumptions and uncorrected
errors" for driving a significant portion of the reduction
in Medicare physician payments. Reps. Thomas and Johnson advise
CMS to "use its administrative authority to correct errors
or recognize newer and more accurate data when calculating
the SGR" (the sustainable growth rate methodology used
to calculate physician payment updates).
According to Reps. Thomas and Johnson, failure to correct
or revise data will cause continued reductions in Medicare
physician reimbursement. If CMS does not revise its assumptions
and correct past data errors, Reps. Thomas and Johnson predict
cuts of 5.7 percent in 2003 and 2004, 2.8 percent in 2005,
and 0.1 percent in 2006.
Reps. Thomas and Johnson identify specific modifications
that CMS should make regarding their data and assumptions.
The changes include: using a multi-factor productivity measure,
revising current assumptions that physicians increase volume/intensity
to offset rate reductions, incorporating other factors that
affect physician income (e.g., new tax laws), adjusting for
growth in professional liability insurance premiums, accounting
for the cost of providing new benefits, and correcting data
errors incurred in 1998 and 1999.
The cumulative effect of CMS' errors and misguided assumptions,
Reps. Thomas and Johnson warn, "greatly exacerbates the
physician spending baseline" and makes it "more
difficult for Congress to enact a reasonable solution to the
significant and successive payment cuts." Once CMS addresses
the problems outlined in the letter, Thomas and Johnson conclude,
Congress can then "develop legislative solutions to complement"
the administrative changes in manner that preserves beneficiary
access to care while "safeguarding scarce taxpayer dollars."
Information:
Christiane Mitchell, Senior Legislative Analyst
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
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