Medicare fees for primary-care services will fall and payment for all other physician services will rise if Congress and President Clinton are unable to agree on balanced-budget legislation by the beginning of 1996.
Without budget legislation by Jan. 1, the payment base for primary-care services will fall 2.3% to $35.55, while the surgical base would rise 3.8% to $40.95. The base for other nonsurgical services would rise 0.4% to $34.75 under a default formula that automatically takes effect in years when Congress does not act to update physician fees.
HCFA has sent notices to doctors informing them of those 1996 fee updates. A HCFA official said the agency as soon as this week may publish a rule in the Federal Register that would make the fee update official.
Congress and the White House now are wrangling over a congressional balanced-budget plan that seeks $270 billion in savings from the Medicare program over seven years.
Among the ways Congress' balanced-budget plan would obtain initial savings would be to establish in 1996 a single payment base of $35.42, a large reduction for surgery, a small cut for primary-care services and a small increase for all other services.
The method of calculating future updates would be altered to be more favorable to doctors, although the congressional bill would reduce physician spending by at least $22.6 billion over seven years. The Congressional Budget Office estimated that Medicare paid physicians $32.8 billion in fiscal 1995.
If the 1996 default update takes effect before the budget is passed, and a budget that passes later calls for lower fees, doctors could be forced to pay back any earnings from the temporarily higher fees, said the HCFA official, who asked not to be identified. The official added, however, that it will depend on how Congress and the White House structure the legislation.
The payment base, called the "conversion factor," is used to determine Medicare fees for every service by multiplying it by a numerical value assigned to given physician services. The conversion factor is updated yearly.
The payment system originally aimed to favor less-expensive primary care.