CMS Announces Proposed Rule
for Medicare Physician Fee Schedule Update
August 15, 2003 - The Centers for Medicare and Medicaid
Services (CMS) Aug. 15 published in the Federal Register
the Medicare Physician Fee Schedule Update. The rule
proposes a 4.2 percent reduction in the update. This is essentially
the same as the projected reduction stated in CMS's March
2003 letter to MedPAC. The reasons stated by CMS for the reduction
are "slow growth in the economy and … significant
growth in physician outlays in 2002." Both of these factors
weigh heavily in the methodology used to calculate the update,
sustainable growth rate (SGR).
The issue of removing drugs, one of the significant inflationary
factors in the SGR, is not addressed in the proposed rule.
However, CMS has stated that it will issue separate rules
at some time in the future related to the physician's practice
expense for administering drugs and changes in payment methodology
for the drugs.
While CMS has declined to address the issues with the SGR
in the proposed rule, there are several provisions that may
provide some relief for the physician community. Specifically,
CMS is proposing a revision of the Medicare Economic Index
(MEI) with a rebasing to calendar year 2000 financial data
and a change in the professional liability insurance component
of the Geographic Practice Cost Index (GPCI). CMS hopes that
together, these two proposed changes will more accurately
capture the recent increase in malpractice premiums.
In remarks accompanying the release, CMS Administrator Tom
Scully stated, "physicians should note that while CMS
is required to publish a proposed physician fee schedule rule
at this time, both the House and the Senate versions of Medicare
legislation contain provisions that address the proposed fee
schedule cuts."
Comments on the proposed rule will be due by Oct. 7.
Information:
Denise Dodero, Associate Vice President
AAMC Health Care Affairs
ddodero@aamc.org
(202) 828-0493
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