The CMS has proposed a -4.2% update to physician payment rates next year but noted that the rate would be changed for the better if pending Medicare bills in the House and Senate become law. The CMS' projected rate change for 2004 is due in large part to slow growth in the economy and growth in physician outlays in 2002, the agency said. Under the House Medicare reform bill, physicians would receive an increase of at least 1.5% next year and in 2005. In its proposed rule on physician payments, which will be officially published in the Federal Register on Aug. 15, the CMS also proposed using data from 2000 instead of 1996 to calculate physicians' practice costs, which help determine payment rates. The CMS' proposal can be viewed here.
In a separate proposal, the CMS is presenting options for revamping the system used to pay for drugs covered by Medicare Part B. Later this week, the agency is expected to propose regulations seeking comment on several possible changes, including determining payment for a drug based on the lowest price in a given locality. Currently rates for Medicare-covered drugs are determined using the national average wholesale price. Negotiators in Congress working on a compromise Medicare reform bill will also take up average wholesale price reform when their deliberations continue next month. -- by Jeff Tieman