Despite efforts by medical groups to seek a delay, HCFA intends to release in May its plan to incorporate practice expenses into Medicare physician payments.
However, support is growing for phasing in the new system over more than a year rather than beginning it on Jan. 1, 1998. Agencies that advise HCFA on payment issues and at least one top House Republican have voiced support for phasing in the new system.
HCFA plans to publish a Federal Register notice in May outlining its practice-expense initiative. By law, a resource-based method of reimbursement for such practice expenses as rent, utilities, equipment and staff time must take place by next January.
At last month's American Medical Group Association meeting, Rep. William Thomas (R-Calif.), chairman of the House Ways and Means health subcommittee, said he supports phasing in the plan over more than one year.
Resource-based practice-expense reimbursement represents about 40% of physicians' Medicare payments. A phase-in would help ease losses in Medicare revenues faced by some surgeons and specialists, whose total Medicare income could drop by as much as 44%, preliminary HCFA estimates show.
The Physician Payment Review Commission, a congressional advisory panel, has recommended a three-year phase-in. Another advisory group, the Practicing Physicians Advisory Council, backed a multiyear phase-in and urged a mechanism to obtain more reliable practice data.
HCFA has been struggling to collect the financial data needed to support its new practice-expense fee schedule. But agency officials insist they must publish the rules soon if the plan is to be implemented by the legally required deadline. Only legislation passed by Congress and signed by the president, they say, can delay action.
Specialty groups are encouraged that Thomas and other members of Congress recognize the plan presents a problem, but they say phasing it in will not allow HCFA to address basic problems such as lack of data and questions about methodological soundness.
"The fundamental issue is 'garbage in, garbage out,'" said Randolph Fenninger, co-chairman of the Practice Expense Coalition, which represents 30 specialty groups.
He said the planned changes could be so profound that no amount of transition could make a difference. "A 45% reduction in Medicare revenues is a 45% reduction in Medicare revenues," he said.