Congress moves closer to Medicare pay increase

But final agreement hinges on a Medicare reform bill breakthrough.

By Markian Hawryluk, AMNews staff. Nov. 24, 2003.

Washington -- Physicians would be in line for updates of at least 1.5% in 2004 and 2005 if Congress can agree on a Medicare prescription drug benefit and reform bill.

Lawmakers working to reconcile House and Senate versions of the Medicare reform legislation have reached tentative agreement on all but a handful of thorny issues that could still derail the bill.

Final details will also be subject to a budgetary analysis to ensure the compromise measure falls within the $400 billion Congress has set aside over the next 10 years. If spending predictions exceed the budgeted amount, negotiators would have to revisit previous agreements to find savings.

The deal would replace the 4.5% cut in Medicare physician fees scheduled for Jan. 1 with a 1.5% increase, and it would provide for a 2005 update of at least 1.5%.

Legislators also agreed that the work expense portion of Medicare fees can go no lower than the national average for all physicians for the next few years. Currently, all three components of Medicare rates -- work, practice expense, and liability premiums -- are adjusted by region. Practice expense and liability premium adjustments would not be altered. The negotiators also have agreed to include bonus payments for physicians practicing in underserved areas.