Should Incomes Rise 17%? Stark Asks : Curb on Medicare Fees of Doctors Pondered

Frustrated by rising Medicare costs, Congress may be forced to impose new “strenuous, strict” controls on the fees and Medicare earnings of the nation’s doctors, who are performing many unnecessary procedures, an influential House subcommittee chairman declared Wednesday.

“Should physicians’ (Medicare) incomes increase 17% a year?” asked Rep. Pete Stark (D-Oakland), chairman of the Ways and Means Committee’s health subcommittee, which writes Medicare legislation.

“Physicians aren’t doing much about policing themselves--we’re getting increasingly frustrated,” Stark said.

Stark’s angry statement came at a full Ways and Means Committee hearing called to probe the reasons for the surprisingly large increase in 1988 Medicare premiums announced last month. The monthly fee paid by beneficiaries for doctors’ services and home care will rise to $24.80 in January, a record $6.90 increase.

Unnecessary Tests Cited

Dr. William Roper, the director of Medicare, said unnecessary tests and services charged by doctors are contributing heavily to the escalating costs of Medicare, which helps pay the health costs of 27 million people over 65 and 3 million disabled people.

One study indicated that 30% of coronary bypass operations were questionable and another 14% “clearly inappropriate,” he said.

Roper told the committee that the government is intensifying its review of the Medicare bills submitted by doctors to try to spot abuses but that it is a difficult task.

“The challenge is, how do we identify” the work that shouldn’t be done? Roper said.

Although Stark and other committee members expressed alarm at the big jump in the Medicare monthly premium, they did not suggest that Congress would try to roll it back.

Scaling back the recipients’ premiums would only worsen the federal budget deficit, they noted. If premiums were reduced to cover less than the current 25% share of the expenses for Part B of Medicare--the part that covers physicians’ services--the difference would have to come from general tax revenues. (Medicare’s Part A, which covers hospital bills, is financed by a payroll tax on workers and employers.)

Not ‘Much We Can Do’

“I don’t think there’s much we can do right now,” Stark said.

Noting that Part B Medicare spending rose 20% this fiscal year, Stark warned that premiums could reach $50 a month in four or five years unless the cost spiral is curbed.

He said the medical profession should work with federal administrators to devise effective Medicare fee limits and curbs on excessive services. Currently, the government has limits on doctor fees for specific procedures but there is some flexibility. The limits have been circumvented by doctors who have required more office visits or extra procedures, according to Stark and other critics.

Doctors should be willing to negotiate now or else face dramatic controls later, such as a government surcharge on doctors’ Medicare earnings over a certain level, he said. If medical bills keep rising, he said, “the public will get so furious it will force Congress to do something precipitous.”

The average doctor participating in the Medicare program makes about $40,000 a year from the program. That is a significant part of doctors’ incomes, which average $112,000 a year, according to committee staff members.

Dr. James Todd, deputy executive vice president of the American Medical Assn., told the committee: “We share your concern, we share your frustration. We need to develop a mechanism to determine what is unnecessary service.”

However, he said, medicine is an “imprecise” science involving snap decisions, some in life-and-death situations. Someone reviewing a patient’s file later might say that a certain test was not needed, but the doctor on the scene was using his best judgment, Todd said.

“Physicians have received unjustified adverse publicity,” Todd said. “No other sector of the economy has had so many price controls.” Fees on many procedures have been effectively frozen for four years, he said.

Rep. Sander M. Levin (D-Mich.) snapped: “You come here and essentially say: there’s no abuse.”

Rep. Larry Smith (D-Fla.), whose South Florida district has a large population of retirees, called on the government to escalate efforts to detect “abuse and overuse by both patients and doctors.”

Smith said some of his aged constituents have outlived their spouses and most of their friends and use doctor visits to help pass the time.

“They take a whole day to see the doctor,” he said. “They convince themselves something is wrong. Many will feel absolutely entitled to the Medicare system, regardless of need.”