Medicare Fees: While Generalists Smile, Specialists Go to Court

Medical Economics, January 11, 1999 | Go to article overview

Medicare Fees: While Generalists Smile, Specialists Go to Court


In 1999, you'll earn somewhere between 5 percent more and 4 percent less than last year for the privilege of treating Medicare patients. That's the deal from the Health Care Financing Administration, one that has made a lot of doctors unhappy.

Compared with 1998, the average change for physician fees is an upward 2.3 percent. But who's average? More likely, you'll experience a shift that's above or below the 2.3 mark-the direction and spread depending on your type of practice.

Recall that HCFA has been struggling over the past few years to base the practice-expense component of physician fees on the value of resources expended rather than on historic charges. (The practice expense component has accounted for slightly more than 42 percent of a Medicare fee.) HCFA's objective has been controversial, and at times it has set generalists against specialists. Now the fight is over-almost.

As it stands, resource-based practice expenses (RBPEs) caused fees for evaluation and management services in general to go up for 1999: Reimbursements for office visits by established patients (codes 99211 to 99215) increased between 12 and 55 percent, and fees for visits by new patients (codes 99202 to 99205) climbed as much as 34 percent.

At the same time, RBPEs caused fees for procedural services to drop: Reimbursement for a colonoscopy for lesion removal (45385) decreased by 12 percent, for instance. It sank by 18 percent for the treatment of a retinal lesion (67210).

No wonder primary-care physicians are grinning and specialists are grimacing. By HCFAs estimation, family physicians will take in 2 percent more Medicare money this year, while several surgical specialties-cardiac, neuro-, thoracic, and vascularwill realize 3 percent less. Fees for general internists will be a wash. Dermatologists are the big winners at plus-5 percent, and gastroenterologists are the big losers at minus-4 percent.

But this year is just the beginning. Only one-fourth of the practice-expense component is based on resources; the remainder is still based on historic charges. Each year, the resourcebased share is to jump by a 25 percent increment, until it reaches 100 percent of the component in 2002.

Naturally, the cumulative impact is more dramatic than 1999's alone. Dermatologists gain 20 percent between now and 2002; gastroenterologists lose 15 percent. Rheumatologists gain 16; cardiac and thoracic surgeons lose 12. Family physicians gain 7; neuro- and vascular surgeons lose 11. General internists gain 2 percent.

What do the changes mean in dollars and cents? First, take a look at family physicians. Their median annual income is about $124,000, according to Kent Moore, manager of reimbursement issues at the American Academy of Family Physicians, and about 22 percent of that is derived from Medicare. Roughly, then, the average FP stands to make $545 more from Medicare in 1999, says Moore. …

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