Physician groups said HCFA probably will defy congressional directives as it completes the development of a new system that determines how much Medicare reimburses physicians for its share of their practice costs.
The groups say HCFA won't be expanding its data-collection effort or doing comprehensive cost-accounting analyses of physician practices as it develops a new proposed regulation for "resource-based" practice-expense reimbursement.
Those requirements were included in the federal balanced-budget law enacted in August. But the language of the law may give HCFA a legal opportunity to evade those requirements.
The agency's actions, however, could launch a new round of lobbying or a lawsuit against the agency next year, the groups said.
HCFA didn't return phone calls.
The federal balanced-budget law enacted in August opened the door to the continued squabbling by delaying for one year the implementation of the "resource-based" practice-expense reimbursement for physicians.
Practice expenses, such as staff salaries, supplies or rent, now are reimbursed on the basis of historical charges.
The new system, required under a 1994 law, would base practice-expense payment more on the complexity of the practice-related resources required to deliver a clinical service.
The new system was scheduled to take effect in fiscal 1998, which started Oct. 1. But the budget law pushed that date back to fiscal 1999, with the system being phased in through fiscal 2002.
That new compensation formula is expected to mean, in general, higher fees for office visits, aiding primary-care doctors, and lower fees for procedures and surgeries. The new system is projected to shift about $4 billion a year from surgeries and procedures to primary-care office visits. The Congressional Budget Office estimated that Medicare would pay physicians a total of $30.7 billion in 1997, of which practice expenses account for about 41%.
In delaying implementation of the new fees, Congress ordered HCFA to revise proposed regulations it issued in June and publish new proposed regulations by May 1, 1998. The budget law called on HCFA to use "actual" data in developing the formula for compensating Medicare-related practice costs rather than basing payments on HCFA estimates.
It also requires HCFA to use "generally accepted cost accounting principles" when developing the estimates. But the law gives HCFA the freedom to evade the data and accounting requirements by saying they must comply "to the maximum extent practicable."
HCFA appears to be prepared to claim that it won't be practicable for the agency to radically overhaul the existing proposed rule in time to meet the May 1 deadline, physician groups said. HCFA officials told physician groups as much in a meeting last month to hear physician groups' testimony on how to compensate indirect practice costs -- or those costs such as rent, utilities or office equipment not easily linked to a specific service.
"That seems to be their `get home free' card," said Michael Maves, M.D., executive vice president of the American Academy of Otolaryngology and treasurer of the Practice Expense Coalition, an alliance of specialty groups that lobbied for the delay in the implementation of resource-based practice-expense payment.
Based on HCFA's actions, specialty groups said they expect to ask Congress to step in yet again in 1998 to order HCFA to collect and analyze more data. If that doesn't happen, a lawsuit may be possible. "We've always felt litigation may be the only end-point for some of the specialty groups," said Randolph Fenninger, co-chairman of the Practice Expense Coalition.