House leaders called on CMS Administrator Tom Scully to remove Medicare-covered drugs from the formula used to set annual payment updates for physicians. With "unprecedented growth" in drug expenditures, the formula "no longer accurately reflects true physician service costs," said Reps. Billy Tauzin (R-La.) and Michael Bilirakis (R-Fla.) in a June 3 letter to Scully. Tauzin is chairman of the House Energy and Commerce Committee, and Bilirakis heads its health subcommittee. At deadline, committee aides could not be reached for comment on how the change would affect the 2004 physician update, currently set at -4.2%. According to the American Medical Association, removing Medicare-covered drugs from the formula could increase physician payments by $25 billion to $80 billion over the next 10 years, depending on how the change is implemented, but might not prevent a payment cut in 2004. -- by Jeff Tieman
Lawmakers urge CMS to change physician update formula
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