Oklahoma health policy experts polled by The Journal
Record took issue with a proposed federal fee schedule forphysician
services to Medicare patients, claiming fee schedules set by people
working outside the health industry would be ineffective and
Others, however, claim such a schedule could return the laws of
supply and demand to physicians' fees, thereby bringing greater
efficiency and ultimately better health care.
The Department of Health and Human Services is drafting a report
to Congress that recommends a fee schedule which would set standard
payments for 6,000 procedures performed by doctors, the New YorkTimes
News Service has reported.
The fee schedule would be based either on historical data showing
how much doctors have charged for the services, or how much Medicare
has paid. It would replace a freeze set in June which limits fees
for physicians services to all Medicare beneficiaries.
Officials at the Federal Health Care Financing Administration,
which operates the Medicare program, said they would like to see the
fee schedule take effect in October 1986. However, they said thatthe
report was still being revised and that the recommendations were
subject to approval by Margaret M. Heckler, the secretary of health
and human services, and by the Domestic Policy Council, whichconsists
of eight Cabinet officers.
If a fee schedule is made mandatory, one based on how much doctors
have charged for their services, rather than what Medicare pays,
would be more acceptable to physicians and less harmful to patients,
according to Dr. William Coleman, secretary/treasurer of the Oklahoma
County Medical Society.
Under the current freeze, Medicare intially sets a fee it deems
acceptable - usually about 60 percent to 65 percent of the customary
charge - based on fees submitted in 1982, said Coleman. Medicarethen
pays 80 percent of that fee.
If the physician charges $800 for a particular surgical procedure,
therefore, the acceptable fee may be set at $500 and Medicare would
pay 80 percent of the $500.
Dr. Warren Felton, president of the Oklahoma County Medical
Society said a fee schedule could be an appropriate method of
payment, depending on "the rate of fees established and who would be
involved in determining the fee schedule.
"If it were made by people who don't practice medicine, it would
not be practical," he said.
The Department of Health and Human Services report also suggests
research to test two other ways of paying doctors.
- One, known as capitation, involves a single yearly payment to
a group of doctors who agree to provide all necessary services to a
- Under the other system, the government would pay a flat sum,
set in advance, depending on the diagnosis of the patient's ailment.
Each patient would be classified in one of 468 ""diagnosis-related
groups,'' and Medicare would pay doctors the same amount for each
patient in each group.
Felton said capitation and the fixed sum proposal "would be very
difficult to accomplish in a satisfactory way."
Medicare payments to hospitals are currently set up on a fixed
sum, or diagnosis related group (DRG) payments. The proposed changes
would involve "reorganizing the entire pattern of medical
Don Alexander, partner in the Oklahoma City office of the
accounting firm of Ernst & Whinney, said a fixed price for physicians
would not be dissimilar to what has already occurred in hospitals.
It's effect, he said, would be revolutionary.
The DRG payment system, he said, introduces risk for price at
hospitals where they get paid a fixed amount for each patient
regardless of costs, as contrasted to reimbursement for care.
The new payment system has resulted in mergers, formation of minor
emergency centers and other facilities where service can be provided
less expensively on an outpatient basis. …