CMS today issued a final rule, effective Thursday, that increases Medicare payments to physicians by 1.5% and establishes new payment rates for injectables and certain other drugs that have been covered by Medicare.
The changes, part of the recently signed Medicare reform legislation, averted a projected 4.5% in cuts for physicians in 2004. CMS adds that physicians in some rural and other areas will see an additional increase in payments, for a total increase of as much as 4.8%.
CMS says the new rule also reduces Medicare payments for injectables and certain other drugs from 95% of the average wholesale price to 85% of AWP, but Medicare will raise payments for administrating drugs.
Meanwhile, CMS says it will continue to pay 95% of AWP for blood-clotting factors; drugs or biologicals that are new in 2004; pneumonia, influenza and hepatitis B vaccines; certain drugs or biologicals furnished in connection with renal dialysis services; and certain infusion drugs that are furnished through certain items of durable medical equipment, such as a nebulizer.
CMS adds that it will pay as little as 80% of AWP for certain drugs found to be overpaid in studies by the General Accounting Office or HHS Office of Inspector General. CMS did not name these drugs. Manufacturers of the drugs can submit requests for higher reimbursement.
The final rule will be published in the Jan. 6 Federal Register, and comments will be accepted until March 8. CMS says it will review and respond to public comments in additional rulemaking later in 2004.
Because of the late timing of the change in payment rates under this rule, CMS says it is extending until Feb. 17 the deadline for physicians to decide whether or not they want to participate in Medicare in 2004.
Participating physicians are paid higher Medicare fees than nonparticipating physicians but agree to accept assignment and to bill beneficiaries only for a 20% co-payment.