AAMC Weighs in on Physician
Fee Schedule; Inclusion of Drug Costs in the SGR
September 6, 2002-The AAMC Aug. 27 submitted a comment
letter to the Centers for Medicare and Medicaid Services'
(CMS) proposed rule regarding Revision to Payment Policies
Under the Physician Fee Schedule for Calendar Year 2003. CMS
will publish a final rule on or around Nov. 1, which will
become effective on Jan. 1, 2003.
The proposed rule addresses one issue with the physician
fee schedule, which has received attention during the past
year. Specifically, CMS changed its approach to calculating
the Medicare Economic Index (MEI) and the 2003 MEI update
is calculated at 3.0 percent; CMS' previous treatment of the
MEI would have resulted in an MEI update of 2.3 percent. Under
the proposed rule, this change in the MEI results in a proposed
Conversion Factor (CF) change of -4.4 percent instead of -5.1
percent.
Other issues with the Physician Fee Schedule methodology
and calculations continue to exist. The AAMC, American Medical
Association (AMA), and 22 other physician societies Aug. 27
sent a letter
to CMS Administrator Tom Scully regarding CMS' inclusion of
the cost of drugs in the Sustainable Growth Rate target (SGR),
the methodology used to calculate spending targets for services
paid under the physician fee schedule. Inclusion of the costs
of these drugs is a key contributor to the payment cuts that
CMS predicts in the next decade. CMS is urged to use its acknowledged
authority to remove the costs of drugs from the SGR target
and thus help to address one issue with the payment system.
The AAMC is pursuing both legislative and administrative
fixes to the physician payment formula in order to provide
short- and long-term relief from payment reductions. The AAMC
believes the short-term physician provisions in H.R.
4954 are a workable beginning [see
Washington Highlights, June 28], but continues
to press the Senate to improve upon the House package.
Information:
Denise Dodero, Associate Vice President
AAMC Health Care Affairs
ddodero@aamc.org
(202) 828-0493
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