There was news, but there were no surprises when the Centers for Medicare and Medicaid Services last week issued its final regulation for the 2003 Medicare outpatient prospective payment system.
The bad news was tied into the physician payment formula. Citing "significant problems" with anesthesia codes, the CMS delayed the final rule for physicians. CMS Administrator Thomas Scully said the coding problem could be straightened out in a few days and in all probability before Dec. 1, in time for the new rates to begin by Jan. 1.
But it still would not resolve the far bigger problem-the overall funding formula for doctors, which has been the subject of fierce lobbying in recent weeks. Although it would require only a few minor technical changes in the law, Scully maintained his hands are tied and a formula fix that could increase physician payments is up to Congress (Oct. 28, p. 10). Physicians are scheduled to receive a 4.4% decrease in Medicare payments in fiscal 2003, on top of a 5.4% reduction in fiscal 2002.
"I've spent a year trying to fix it," Scully said at a press conference last week. "I would be the happiest guy in the world to get a call that I could fix it administratively."
The decision to delay the final rule to ensure its accuracy was a good one, officials at the American Medical Association said in a written statement. They called on Congress to pass legislation that fixes the funding formula problem early in Congress' lame duck session to avert an access crisis for Medicare patients.
"Physician practices have reached their breaking point," said Yank Coble Jr., M.D., the AMA's president.
Scully said he hoped doctors would understand that everyone is pushing for the fix. "I think it's inevitable it will be fixed. I think physicians will be angry, and they have a right to be angry, but I'm hoping they will understand that we would like to fix it," he said.
Meanwhile, total payments to outpatient hospital departments are expected to reach $18.7 billion in 2003, which would be up 5.6% from the $17.7 billion allocated in 2002. Payment rates for each service will increase by an average of 3.7%, the CMS said. While every category of hospital will see an increase in payments, rural hospitals will see the largest percentage increase in total payments-6.2%.
Medicare also plans to fully fund high-tech drugs and devices to help ensure that seniors get access to cutting-edge technologies, the CMS said.
The final rule brought a few minor changes but no big surprises, and the good news is that some of last year's inequities have been resolved, said Carmela Coyle, senior vice president of policy at the American Hospital Association. Still, the CMS continues to pay hospitals only 83 cents on every dollar of care they provide, she said. In addition, while the funding of high-tech procedures might seem like a windfall, it will be taken off the back of low-tech procedures because of Medicare's zero-sum budgeting.
"Funding new technology for a system that is inadequately financed is a real problem," Coyle said.