Seeking to rob hospitals to pay physicians, the American Medical Association last week highlighted the growing schism between organized medicine and the hospital industry when it comes to who gets more from Medicare.
At its meeting last week in Atlanta, the AMA's 447-member House of Delegates adopted a resolution calling on the association to lobby for federal legislation to transfer money from Medicare Part A, which covers hospital care, to Part B, which covers physician care.
The extra money is intended to cover physician practice costs, which the AMA says have risen because hospitals have shifted care from the inpatient setting to the outpatient setting. There was no estimate of how much money hospitals would lose and physicians would gain under the association's policy, if adopted by Congress.
The AMA delegates adopted the policy as part of a compromise that sought to patch up differences within the AMA's ranks between medical specialties.
Specialists and surgeons have been feuding with primary-care physicians over an impending change in Medicare reimbursement for physicians' practice expenses that's expected to increase Medicare payments to office-based primary-care practices and decrease it for hospital-based specialty services.
In endorsing the shift of Part A money to Part B, the delegates appear to be trying to end that interspecialty battle by uniting against a common enemy-hospitals.
That move conflicts with the "new era of collaboration" declared by executives of the AMA and the American Hospital Association on issues of common interest resting before Congress.
Richard Wade, senior vice president for communications at the American Hospital Association, called the AMA's proposal "a bad idea."
"Part B already has a claim on general revenue funds. We know where Part A's headed-bankruptcy," Wade said. "This is like trying to get the furniture and fine wine out of the ship before it sinks."
MODERN HEALTHCARE recently disclosed that the groups are shopping around competing legislative proposals on provider-sponsored organizations that would contract directly with Medicare (Dec. 9, p. 5).
But Congress isn't likely to approve the AMA's plan to shift to the Part B revenue pool money from the Medicare Part A Hospital Insurance Trust Fund because the hospital fund is projected to run out of money in 2001.
Because such a proposal is not likely to pass, the delegates' action probably will not accomplish any of the AMA's goals but it will certainly anger hospitals and other institutional providers that receive payments from the hospital trust fund.
The new AMA policy justifies the shift of money from Part A to Part B by saying money is being "inappropriately retained" in the Part A pool because more care is being shifted from inpatient beds to physicians' offices.
Making more money available to reimburse physicians' overhead expenses will unify doctors, AMA officials said, because specialties will be less likely to fight over the size of their payment slices when the overall pie is larger.
A 1994 law requires that in 1998 the method HCFA uses to calculate reimbursement for such practice expenses as staff salaries, equipment or rent be altered to resemble the method for physicians' actual patient-care work. That so-called "resource-based" method aims for higher Medicare payment for services that are more complex and demand more of the physicians' resources.
Current practice-expense reimbursement is based on historical charges.
Prodded by specialty physician groups at its June meeting, the delegates voted to seek a delay in implementation of the law until 1999 because they feared the data collection would not be completed in time for HCFA to publish a proposed rule early next year. The chief fear was that a mail survey designed to assess physicians' indirect costs, such as rent and utilities, would not be completed.
HCFA since has canceled that survey because of low response rates.
The compromise policy approved last week reaffirms the AMA's support for the one-year delay. It also asks HCFA to base its payment formula on good data and calls for an AMA analysis of the methodology used to determine the formula.