GOVERNMENTAdvisory panel ponders fix for Medicare payment formulaNew formula would not prevent cut in Medicare physician payment next year.By Markian Hawryluk, amednews staff. Dec. 3, 2001. Washington -- The Medicare Payment Advisory Committee is mulling a proposal that would link annual updates of physician Medicare payment to changes in the costs incurred by physicians and an assessment of payment adequacy. At its November meeting, MedPAC, which advises Congress on Medicare payment issues, discussed a two-pronged approach to replacing the current sustainable growth rate -- a major part of the formula used to calculate the payment update. Under the proposal, policymakers first would assess whether current-year payments for physician services were adequate, then determine how physicians' costs would change in the upcoming year. "That would seem to be a way to avoid the problems that the SGR system has," said MedPAC staffer Kevin Hayes, PhD. "It would allow for some discretion in the decision-making process, smooth out some of the volatility, take into account factors that are not accounted for now, and overall make the update mechanism for physician services similar to the update for other types of services." But Hayes cautioned that determining adequacy of payment is not easy because of a lack of accurate measurement tools for the physician market. One measure that could be used by MedPAC to get at adequacy is the number of physicians serving Medicare beneficiaries. But since physicians normally treat both Medicare and non-Medicare patients, that measure would not reflect decisions by physicians to reduce the number of Medicare patients they see. According to MedPAC Chair Glenn Hackbarth, an independent health care consultant from Bend, Ore., exiting the Medicare program is a physician's last resort and a sign that payment already has dropped well below adequate levels.
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Copyright 2001 American Medical Association. All rights reserved.
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