CMS administrator Thomas Scully says his number one issue for 2003 is fixing the physician reimbursement levels under Medicare.
In his address to 750 attendees of the National Health Policy Conference in Washington on Wednesday morning, Scully says the 5.4% cut of 2002 could be justified because physicians were overpaid by about $10 billion a few years ago. But he calls this year's 4.4% cut "indefensible" and says if every glitch in the physician payment formula back to 1992 were fixed, physicians would receive a 1.6% increase.
The two-day conference is being co-hosted by AcademyHealth, a non-partisan research and policy organization, and the health policy journal Health Affairs.
Scully calls the physician cuts an "accidental savings" and argues that the fix would have no cost.
"Nobody ever intended not to spend that money," he says. "There is no question that what Congress intended was at worst a freeze. Nobody ever envisioned physician spending going down."
Because the cuts go into effect March 1, Scully says the physician fix is a true emergency and should take precedence over other provider payment concerns that can be addressed later in the year.
"If you want to be a credible contractor with physicians, then you can?t afford to have these big up and down rollercoaster changes," Scully says. "Having the fundamental relationship between the Medicare program and doctors have any fractures is not a good idea."
With regard to geographic disparities among Medicare provider payments, Scully concedes that the wage index used by CMS to set rates is behind the times. He says an attempt to level the payments for managed care a few years ago starved urban areas while no managed care plans showed up in the needy rural markets.
"When you try to fix these inequities, sometimes it backfires," Scully says. "The ability to do anything on a regulatory basis is pretty limited."
He also emphasizes the need to reduce the number of uninsured, but says the political reality is that the Medicare prescription drug benefit and other Medicare reforms will have to be addressed first. Without revealing any details of President Bush's budget for 2004, Scully says he would be surprised if Bush did not suggest at least as much as the $90 billion he proposed for 2003, but which Scully says was never discussed in Congress.
