Physician groups are blaming each other in the aftermath of a Capitol Hill battle over how Medicare compensates doctors for their practice expenses.
Specialists failed in an 11th-hour lobbying campaign to change current plans for redistributing payments from them to primary-care physicians. The failed effort has provoked a round of finger-pointing and ill will among physician groups. Those groups are already bitterly divided in a long-running war over how to shift some $4 billion a year in compensation for costs related to office staff, equipment, supplies and other overhead items used while serving Medicare beneficiaries.
Practice expense payments represent about 40% of the $30.7 billion Medicare will spend on physician payments in fiscal 1997.
That compensation now is based on historical charges. Under a 1994 law, however, Medicare practice expense payment in 1998 was required to change to a "resource-based" formula, similar to the schedule for reimbursing physicians' professional work.
But specialty and surgical groups have protested that change, saying HCFA used flawed data in developing a regulation to implement the 1994 law.
In the budget bill President Clinton signed into law last week, specialists won a one-year delay in implementation and a phase-in of the new schedule. They also won a provision requiring HCFA to review its data and revise the practice expense regulation.
But primary-care doctors, arguing that the current system is unfair to them, won partial compensation for 1998. In Washington healthcare lingo, this came to be known as the "down payment" for primary-care expenses. It amounts to $390 million for the next year.
But specialty groups proposed a revision in the down-payment formula only four days before congressional negotiators agreed to a budget plan on July 31. The specialists said they were seeking to spread the pain of fee cuts more evenly among specialties. They said their proposal would not have reduced the amount diverted to primary-care services in 1998.
But primary-care groups contend the specialists double-crossed them by lobbying in secret to reopen a budget provision to which both sides had agreed. They contend the last-minute proposal could have reduced their $390 million payment, although they have not specified by how much.
They also object that the American Medical Association, which serves as the umbrella lobbying group for all physician organizations, took the side of specialists. The primary-care groups said that by doing so, the AMA lobbied for something far in excess of what the AMA House of Delegates sanctioned.
"The counterattack launched by the AMA and specialty societies was done without any information or courtesy calls" to executives of primary-care groups, said Robert Graham, M.D., executive vice president of the American Academy of Family Physicians.
Graham said he has told an unnamed member of the AMA board of trustees that he is displeased with what the AMA's lobbyists did.
But AMA spokesman James Stacey said the lobbyists' activities were consistent with the position of the group's House of Delegates, which had called for a delay in the new practice-expense payment formula and close scrutiny of the new formula.
Some Capitol Hill sources, meanwhile, are charging that the AMA sought to split the primary-care coalition by seeking to pull the family-practice group to the specialists' side.
"The AMA would want everyone to support the House of Delegates' language," Stacey responded.
Some specialists, however, accuse the primary-care groups of intransigence and vindictiveness by not agreeing to their proposals to change the redistribution formula.
They said that by asking for concessions in return for the change in the redistribution formula, primary-care groups unnecessarily complicated the negotiations and effectively blocked the change.
Publicly, the coalition of specialty and surgical groups that attempted to secure the last-minute changes said they failed because they were so late.
"We just flat ran out of time," said Randolph Fenninger, co-chairman of the Practice Expense Coalition, which represented the specialty groups.
Privately, however, some sources said the blame lies with the ophthalmological camp for refusing to acknowledge that the down payment was inevitable until it was too late to negotiate a better deal.
But Nancey McCann, government relations director at the American Society of Cataract and Refractive Surgery, said those physicians did not negotiate a better down payment formula because of the message they heard from Republicans taking part in the House-Senate conference negotiating a final budget package.
"I think we felt fairly comfortable hearing from various key members in the conference that they did not support the down payment," McCann said. "Perhaps we should have floated an alternative."
Said Robert Doherty, vice president for governmental affairs and public policy at the American Society of Internal Medicine: "It was only at the point that they started counting votes that they showed interest in negotiating."
The budget law derives the money for the down payment by reducing the maximum practice expense reimbursement physicians can receive for any single surgical or procedural service to 110% of their work fees from 128%. That proposal will concentrate payment reductions among such specialists as ophthalmologists and cataract, orthopedic and thoracic surgeons.
In fact, ophthalmologists will absorb $175 million of the $390 million in specialty cuts. On average, ophthalmologists would lose 4% of their total Medicare income, more than one-third of what HCFA estimates they would lose under the current practice expense proposal.
As an alternative, the Practice Expense Coalition proposed reducing the expense reimbursement for all specialty procedures 4.1%, a proposal that also would have generated $390 million to shift to primary-care payments.