Healthcare experts are saying more big increases in Medicare physician fees could incur the wrath of a budget-cutting Congress.
They made the prediction after the government announced that beginning Jan. 1, 1995, Medicare payments for primary-care services will rise 7.9%. For surgery, fees will rise 12.2%, and for other nonsurgical services, fees will rise 5.2%, for an aggregate fee increase of 7.7%. The fee increases are similar to those for 1994.
The 1995 conversion factors-the dollar amount by which services' "relative values" are multiplied to determine a fee-will be $36.382 for primary care, $39.447 for surgery and $34.616 for other nonsurgical services.
HCFA announced the new fee schedule in a rule published last week in the Federal Register.
Although the Medicare physician fee schedule adopted in 1989 was designed to shift more money to primary-care doctors and away from specialists, the formula used to set payments has not worked as well as expected.
In addition, Congress this year could have set the 1995 fee increases itself, but lawmakers declined to pass legislation to do that. Consequently, the increases were determined by a default formula in the 1989 law.
As a result of that inaction and growing political pressure for deep budget cuts, some healthcare experts said physicians should not be lured into believing increases will continue at this healthy rate.
"Congress could think (the 1995 update) was too generous and take it away next year," said Lawrence Goldberg, director of national healthcare affairs in the Washington office of Deloitte & Touche. "Doctors' fees for calendar year '96 are subject to tremendous reductions."
The fee hikes will yield a $2.2 billion increase in Medicare physician reimbursement for calendar 1995 over 1994, HCFA estimated. HCFA has projected that it will spend $34 billion on physician services in calendar 1995.
HCFA said its recommendation for calendar 1995 fee increases-9.4% for primary care, 10.2% for surgery and 3.7% for other nonsurgical services-would have caused only a $1.5 billion increase in payments over 1994 had Congress adopted it.