Heeding the cries of physician groups, HCFA is asking Congress to make some technical changes to the 1997 budget law that would put more money in doctors' pockets.
Specifically, the agency sent Congress a blueprint for legislation that would change the way the agency determines the increase in Medicare payments to physicians, a HCFA spokeswoman said.
The changes, as HCFA has proposed them, would take effect Oct. 1, when fiscal 2000 begins.
"The legislative proposal is designed to eliminate the glitches and smooth the transition (to a sustainable growth rate)," the HCFA spokeswoman said.
Such changes would prevent the Medicare spending target from swinging wildly from year to year. The modifications would also allow HCFA to update the targets by recalculating them using actual figures, not just estimates.
That target rate of increase in Medicare spending, called the "sustainable growth rate," is determined annually using a formula in the 1997 budget law. The formula is largely based on growth in the gross domestic product but is affected by Medicare's fee-for-service enrollment.
If either estimate is off, the target rate of increase can be much higher or much lower than it should be, physicians argue.
After HCFA actuaries found that the sustainable growth rate fluctuated wildly from year to year in their projections, they agreed with physicians.
"The growth rate is supposed to be sustainable, not unsustainable," said Robert Doherty, senior vice president for governmental affairs and public policy with the American College of Physicians-American Society of Internal Medicine.
An American Medical Association spokeswoman said that this year, for example, the payment update for physicians fell $650 million short of what they would have received if HCFA had used real data instead of the erroneous estimates.
Led by the AMA, physician groups have aggressively lobbied HCFA and Congress for changes in the way the sustainable growth rate is targeted, claiming HCFA's estimates have been much lower than actual GDP growth.
However, changes to correct future calculations won't be enough to satisfy doctors.
"The question is, Will these changes be retroactive?" the AMA spokeswoman said. "We have not at all given up on getting 1998 fixed and 1999 corrected. This ($650 million) is real money to us."
Numerous physician groups contacted by MODERN HEALTHCARE said they had not seen the blueprint, but they agreed changes need to made.
It's not clear when Congress would begin work on a bill to make such changes to the sustainable growth rate.