Medicare payments to doctors will rise 1.5% across the board in fiscal 2005 under regulations proposed by the CMS and mandated by the Medicare modernization act. The increase replaces a 3.7% payment cut that had been projected under previous law. A 5% increase will be given to doctors practicing in areas with low doctor-to-beneficiary ratios. The CMS proposal also addresses new Medicare benefits, including an initial physical exam and screenings for breast cancer, diabetes and heart disease, and outlines a new way for the CMS to pay for physician-office drugs, expected to significantly reduce payments for cancer drugs. The agency released preliminary data on average prices for 32 widely used drugs among Medicare beneficiaries. It is seeking comments on the data and will release final drug payment rates later. The doctor-payment regulations will be published in the Aug. 5 Federal Register, comments will be accepted through Sept. 24, and the CMS will publish final regulations by Nov.1. The CMS projected that its proposals would save Medicare $530 million and beneficiaries $270 million in fiscal 2005.
Also, the CMS on Monday announced proposed regulations to establish a Medicare drug benefit as required by the Medicare modernization act. As under the law, beneficiaries would pay a $250 deductible for prescription medications, after which the government would pay 75% of costs up to $2,250. When the beneficiary has spent $3,600 out-of-pocket, the government would pick up 95% of all subsequent costs. For the purpose of an asset test for additional low-income assistance, the CMS said only liquid assets and real estate holdings would be counted, excluding a beneficiary's home or residential farm. The proposed regulations will be published in the Aug. 3 Federal Register, comments will be accepted through Oct. 4, and final regulations are expected in early 2005. The prescription drug benefit takes effect Jan. 1, 2006. -- by Tony Fong