Although internists and family practitioners say the Medicare fee schedule is skewed against them, revisions expected to take effect next year will boost the value of primary-care services.
Responding to primary-care specialists' contention that healthcare trends have made their work more complex, HCFA's five-year review of the Medicare fee schedule is expected to result in increased values for many of the "evaluation and management" codes that apply to primary-care activities.
HCFA projects those changes will boost payments to family practitioners by 4.6% and payments to internists by 4.2%.
Because any change to the values of Medicare services must not increase the federal deficit, the values of many surgical and nonsurgical procedures will decline. As a result, HCFA projects reduced payments to many specialties-in particular, many surgical specialties. The big loser will be dermatology, with a projected 6.2% decline in payments.
The revisions are part of HCFA's requirement to review the work values of physician services and adjust them effective January 1997, five years after the system took effect. It's the first such periodic review, which must take place every five years.
HCFA's adjustments will be to procedures' "relative values," the numerical values that are multiplied by the Medicare "conversion factor" to establish Medicare fees.
But because many private-sector insurers are using Medicare's relative values to establish their own physician fee schedules, many specialty groups have raised concerns that the projected reductions in relative values for 1997 could spill over into private-sector payments.
To prevent reductions in insurers' fees, some proposed using a separate "budget neutrality factor" that would keep Medicare spending from increasing the federal deficit without eroding the relative values of Medicare services. Use of such a budget neutrality factor would require an additional calculation to determine Medicare fees.
In its proposed rule to enforce the five-year revisions to the fee schedule, HCFA proposed only adjustments to services' relative values to keep the revisions budget neutral. The agency did, however, say it would consider developing a separate budget neutrality factor if physician groups request it.