Surgeons and specialists are aiming heavy artillery at Capitol Hill in their bid to delay a scheduled revision in the way Medicare compensates physicians for their practice costs.
A coalition of 25 specialty societies has hired a lobbying team comprising two former members of Congress and a former top congressional lobbyist for the Clinton administration to ask Congress to delay imposition of "resource-based" practice expense reimbursement. Under a 1994 law, that reimbursement system is set to go into effect Jan. 1, 1998.
The specialty group, called the Practice Expense Coalition, has amassed a war chest said to be at least $1 million to fund the lobbying campaign on Capitol Hill.
The lobbyists the coalition has hired are Vin Weber, a former Republican representative from Minnesota; Tom Downey, a former Democratic representative from New York; and Pat Griffin, who was the White House's chief Capitol Hill liaison when President Clinton attempted to pass his healthcare reform package in 1994.
The surgeons and specialties represented by the Practice Expense Coalition are especially reliant on hospital-based services and are expected to be the big losers in the practice-expense fight.
That's because the new compensation formula will pay less for services delivered in an institutional setting, where some of the costs are borne by the institution.
Primary-care doctors who deliver most of their care in their own offices are expected to come away winners.
Hospitals could feel the pinch of the change in payment policy. The shift of money away from services delivered in hospitals, particularly in their outpatient departments, may motivate physicians to treat more Medicare beneficiaries in their own offices when they can.
In addition, the shift away from specialty services may affect the balance sheets of academic medical centers, which receive subsidies from their specialty-heavy faculty practice plans.
Representatives of the Practice Expense Coalition said HCFA has not had enough time to adequately measure physicians' actual expenses to build a reliable foundation for the change in the compensation formula.
"You've got to produce a study and numbers where everybody says, `Yeah, I can live with that,' " said Randolph Fenninger, the coalition's co-chairman. "We're not even close."
But Fenninger warned against manipulating existing data to come up with a compensation formula acceptable to all specialty groups.
He argued that because some private payers use HCFA's physician payment system to determine their own fee-for-service rates, inaccurate practice expense numbers would interfere with the marketplace.
Primary-care physicians, meanwhile, said the existing practice expense formula is flawed and unfair to them. Any move to delay implementation of the new compensation formula should wait until the proposed rule is published.
"We can't counter them with money," added Robert Doherty, vice president for governmental affairs and public policy with the American Society of Internal Medicine. "We can counter them with reasoned arguments."
The new practice cost payment system must reimburse physicians for such expenses as rent, utilities, equipment and staff time. That's the same resource-use basis employed to reimburse physicians for patient care.
Practice expense payment, which accounts for about 40% of physicians' Medicare reimbursement, currently is based on doctors' historical charges, even though HCFA stopped paying for patient care on that basis in 1992. For fiscal 1997, Medicare physician payments are expected to total $30.7 billion.
HCFA plans to release in May a proposed regulation detailing practice expense compensation for each service provided to Medicare beneficiaries.
A document HCFA released in January projected, as expected, that surgical and hospital-based specialty practices would be especially hard-hit. Cardiac surgeons took the biggest hit. The projection showed they could lose up to 44% of their total Medicare revenues.