Physicians May See Medicare
Relief Yet
November 15, 2002 - The House of Representatives Nov.
14 passed (245 - 137) legislation ("The Armed Forces Tax Fairness
Act of 2002," H.R.
5063) that grants the Centers for Medicare and Medicaid
Services (CMS) legal authority to make administrative changes
to Medicare's physician payment sustainable growth rate (SGR)
system. Ways and Means Committee Chairman Bill Thomas (R-Calif.)
included the physician payment provision as an amendment to
the legislation. Among the resolution's supporters were 54
Democrats. The Senate Nov. 14 passed alternative legislation
which does not include the CMS provision. It is unclear whether
CMS would ultimately exercise its authority to make the administrative
changes.
According to a summary
of the amendment, the provision "clarifies that the Administration
may not be sued for any redeterminations for prior fiscal
years" and "clarifies that the Administration may
not be sued about its calculations of physician payments."
CMS has consistently stated that it does not have the legal
authority to make administrative changes to the physician
payment formula sought by the physician community and has
been concerned about being sued if changes were made administratively.
The AAMC, American Medical Association (AMA), and specialty
groups have legal analysis that indicates CMS has the authority
to revise (without Congressional action) errors that contributed
to the negative CY 2002 physician update, as well as additional
cuts over the next few years. The analysis finds that CMS
may correct errors made in its 1998 and 1999 sustainable growth
rate (SGR) calculations. When calculating the SGR for 1998
and 1999, CMS underestimated the national gross domestic product
(GDP), as well as the number of Medicare beneficiaries. Additionally,
it included drugs and certain other items/services in its
calculations of "physician services" to be incorporated
into the spending target. However, drugs are paid under a
special statutory methodology, not the physician fee schedule.
By correcting both errors, CMS could potentially restore up
to $62 billion in Medicare funding, thereby alleviating pressure
on Congress to finance a physician payment "fix."
In a Nov. 14 morning press conference, Senate Majority Leader
Sen. Tom Daschle (D-S.D.) said it was "inexplicable"
that the House singled out one provider group over another
for relief, particularly when other provider groups, including
hospitals and
home health, are in dire need. When asked whether he would
vote against the measure, he indicated that he had yet to
discuss the provision with his caucus.
Sen. Charles Grassley (R-Iowa), Ranking Member of the Finance
Committee, has reportedly expressed opposition to Medicare
relief legislation that addresses physicians only.
Lynne Davis Boyle, Assistant Vice President
AAMC Office of Governmental Relations
ldavisboyle@aamc.org
(202) 828-0526
or
Christiane Mitchell, Senior Legislative Affairs Manager
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
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