For once, both primary-care physicians and specialists are happy with the 4.5% raise in overall Medicare payments to physicians, effective Jan. 1.
HCFA published the new physician fee schedule in the Nov. 1 Federal Register. Although regulations implementing the schedule are final, HCFA is accepting public comments on them through Jan. 2.
Medicare will pay physicians $40 billion in 2001, up from about $37 billion this year. That overall increase means most specialties can expect modest increases in their fees (See chart).
Physician groups, which unlike hospitals are not anticipating significant Medicare relief from Congress, cheered the increase.
"This is good news for America's seniors and the physicians who care for them," D. Ted Lewers, M.D., chairman of the American Medical Association's board of trustees, said in a written statement.
"The news is fairly good," said Wayne Powell, director of regulatory and legal affairs at the American College of Cardiology.
The cardiologists are also happy because HCFA scrapped its plan to cut their Medicare payments for the insertion, removal and replacement of pacemakers and defibrillators. HCFA raised the possibility of such a cut in its July 17 proposed fee schedule (July 31, p. 9).
HCFA said the payment increase is the product of an annual payment update, the continuing phase-in of a resource-based practice expense payment system and updated data on malpractice insurance premiums.
The AMA wanted to take some credit for the increase, too. "AMA-backed legislation required HCFA to correct its estimates when actual data became available," Lewers said in his statement. "Use of this current data has raised this year's rate to the highest level by far since the (spending-target system) began in 1998."
Not everyone is happy.
The final fee schedule continues a four-year transition in the way Medicare reimburses physicians for their practice expenses, such as rent and office labor. The transition ultimately reduces payments to specialists and will be 75% complete by next year.
Randy Fenninger, a lobbyist for several specialty groups, said this year's fee schedule "just slows the pace of the slippery slope. The end result is still ugly."