The Health Care Financing Administration recently released the Medicare fee schedule for 2000, and specialty physicians once again are bracing for reduced reimbursements.
The fee schedule proposes to take a chunk out of payments to many hospital-based specialists, with some, such as anesthesiologists, expecting to see as much as an 8% reduction in practice expense payments in 2000. The proposed drop in reimbursements is the result of a provision that would eliminate payments for work done by office staff in the hospital setting.
"Medicare already pays for services performed for a facility patient through some other mechanism," the proposed rule reads. "Medicare should not pay twice for the same service."
Specialists in particular feel that they are under the gun because the proposed reductions come on the heels of an earlier overhaul by HCFA of practice expense payments. Practice expense payments, which cover physicians' office and overhead expenses, account for about 40% of each Medicare payment; another 54% is for physicians' work and 5% is for the cost of malpractice insurance. In 2000, Medicare expects to spend almost $37 billion on physician services.
In an effort to eliminate discrepancies in payments to specialist and primary care providers, HCFA decided to change the practice expense methodology. As a result, approximately $4 billion in Medicare reimbursements is expected to shift from specialists to primary care providers between 1998 and 2002. A coalition of specialist societies sued HCFA and the Department of Health and Human Services last year in federal district court in Chicago, charging that the new rule is "unlawful and invalid." The case is pending.
Cardiac surgeons, among those hardest hit by the revision, will suffer an overall reduction of 12% over four years in practice expense payments. To now see their practice expense reimbursements decline another 8% as a result of the proposed clinical-staff rule is adding insult to injury, says Karen Collishaw, associate executive vice president of the Bethesda, Md.-based American College of Cardiology.
Currently, if a cardiac surgeon brings his or her own nursing staff to the hospital for assistance with surgery or post-operative care, HCFA reimburses the physician for the services under the practice-expense portion of a Medicare payment. If the proposed rule for 2000 becomes final, however, HCFA no longer will pay for any services provided by office staff in a facility setting.
In the proposed rule, which was published in the July 22 issue of the Federal Register, HCFA said that "it is not a typical practice for most specialties to use their own staff in the facility setting," suggesting that the elimination of this payment wouldn't have a significant impact on specialists.
But Bob Wilbur, director of government relations for the Chicago-based Society of Thoracic Surgeons, says it is quite common for cardiac and thoracic surgeons to bring their own staff to the hospital to assist with surgery and provide post-operative support, and the society plans to present HCFA with evidence proving that. Comments on the proposed rule will be accepted through Sept. 20.
Randy Fenninger, a Washington, D.C.-based lobbyist and spokesman for the Practice Expense Coalition, a group of specialists opposed to the payment changes, says HCFA's proposed elimination of payment for office staff was too sweeping.
"The government used a sledgehammer to go after a gnat," he says.