Medicare Changes Favor Family Doctors

The Bush Administration announced Friday a new Medicare fee scale that will increase payments to family and general practice physicians while limiting increases for surgeons and other specialists.

The fee schedule, to go into effect Jan. 1, is the biggest revision in the way Medicare pays physicians since the program began nearly 26 years ago.

It is intended to make the payment system more rewarding for primary-care physicians, which federal health officials hope will encourage more doctors to practice in this area of medicine rather than opt for the specialties.

“The fee schedule creates a fairer and more rational physician payment system,” said Gail Wilensky, head of the Health Care Financing Administration, which handles Medicare. The payment system will be “oriented toward primary care and most rural areas and away from specialized procedures and urban areas.”

The fee schedule, which will be updated annually, is based on the relative values of doctors’ work, overhead and malpractice expenses. It sets payment levels for about 7,000 medical services.

Medicare now pays physicians based on prevailing and reasonable charges.

The system will affect nearly 500,000 physicians and 250,000 other medical professionals such as optometrists and podiatrists.

An earlier fee scheduled proposed by the Health Care Financing Administration ran into strong opposition in the medical community and in Congress, mainly because it would have saved $7 billion in Medicare payments to physicians over a five-year transition period. The financing administration maintained that this saving was an unintended result of the legislation that created the new system.

In the revision to be published in the Federal Register Nov. 25, Wilensky’s team eliminated the savings so that “nothing in the regulation will cause total Medicare spending for physician services to fall below the amount that would be spent if the current system were to continue,” she said.

Dr. James Todd, president of the American Medical Assn., said the new version of the fee schedule had “significant improvements” over the earlier version that “will go a long way toward assuring patient access to care.” But he said some problems remain, although AMA officers said they did not want to outline them before they have completed their review of the 1,500-page document the Administration released.

Over the five-year transition period, Medicare spending on physicians’ services is projected to increase 74%, from $27.3 billion this year to $47.5 billion in 1996. That amounts to an annualized average of 12%.

The largest increases will go to family practice physicians, whose fees will rise 18% a year over the transition period. General practice fees will go up 17% annually, internal medicine and psychiatry, 13%.

The specialists who will get less than the average annualized increase over the five years include anesthesiologists and thoracic surgeons, whose fees will rise 8%; radiologists, ophthalmologists and pathologists, 9%, and cardiologists, general surgeons and orthopedic surgeons, 10%.

Health Care Financing Administration officials announced also that the Medicare inpatient hospital deductible for 1992 will be $652. That is 3.8% higher than this year.

A Medicare beneficiary must pay this deductible as part of his or her share of expenses for the first 60 days of inpatient hospital care.