The CMS issued a final rule today increasing payments to physicians by an average of more than 1.5% for 2004, as required by the Medicare legislation signed by President Bush earlier this month. The rule affects about 875,000 physicians and replaces an earlier rule that would have reduced rates by 4.5%. Doctors in rural areas will receive an additional increase that will raise Medicare payments by as much as 4.8%. A separate provision in the Medicare legislation will increase rates to doctors in Alaska by 52% for 2004. Under the new rule, payments for injectibles and some other drugs will be reduced to the actual physician charge or 85% of the average wholesale price (AWP) of the drug, whichever is lesser. Under the old rule, Medicare paid either the actual charge or 95% of the AWP, whichever was lesser. Medicare will increase payment for the administration of drugs. Some drugs, such as blood-clotting drugs, nebulizers and drugs that are new in 2004 will continue to be paid at 95% of the AWP. The new payment plan also reduces the prices the CMS will pay on some drugs to 80% of AWP. Studies by the General Accounting Office and HHS' inspector general's office contended that the CMS was overpaying for these drugs. The final rule takes effect Jan. 1 and will be published in the Jan. 6 Federal Register. The deadline for physicians to decide whether to participate in Medicare in 2004 has been extended to Feb. 17. -- by Tony Fong
Medicare rule boosts physician payments
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