The Senate Finance Committee last week moved to cushion physicians and other providers from reduced growth in Medicare payments by giving them a chance to bill some beneficiaries in excess of standard Medicare fees.
But consumer advocates were quick to criticize the provisions that would allow "balance billing" of Medicare beneficiaries who enroll in two new private health plan options that would be authorized under the bill.
Besides squeezing $5.3 billion from physician payments and
$47 billion from hospital payments over five years, the legislation would allow Medicare beneficiaries to enroll in an array of private-sector health plans by using their projected benefit payments for their premiums.
Among the new choices for beneficiaries would be point-of-service networks, medical savings account plans and private fee-for-service policies, which would be separate from the standard government-administered Medicare fee-for-service program.
Current law bars hospitals from balance billing and puts limits on how much physicians and other providers can bill beneficiaries in excess of Medicare fees. The 80% of physicians who are enrolled in the Medicare participating physician program must accept Medicare fees as payment in full, however.
Nonparticipating physicians directly charge beneficiaries, who then receive reimbursement from Medicare. Those nonparticipating physicians can charge beneficiaries 9.25% more than the fees Medicare pays to participating physicians.
But the Finance Committee legislation would put no such limits on physicians, hospitals and other providers who treat beneficiaries enrolled in either private fee-for-service plans or MSAs.
The House Commerce Committee version of the legislation would allow balance billing only of beneficiaries enrolled in MSAs.
The American Medical Association supports the elimination of balance billing prohibitions, said spokesman James Stacey. In June 1995 and December 1996, the AMA sent Congress Medicare reform plans that called for the removal of such prohibitions.
The AMA submitted its 1995 plan at a time when Medicare payment rates were rising and private payers' fees were flat.
The Physician Payment Review Commission's 1995 report to Congress showed Medicare fees had grown to 68% of private payer rates in 1995, up from 61% in 1992, the first year of the current Medicare physician fee schedule.
But U.S. Labor Department statistics indicate the payment balance has changed. The Labor Department reports that in 1996, physicians' net revenues from Medicare slipped 3.7%, while net revenues from non-Medicare sources climbed 2.1%.