Practice Management Is There A Doctor In The House (Or Senate)?

Several pieces of legislation currently winding their way through Congress — on subjects ranging from medical liability reform to Medicare payments — could have a large impact on physicians and how they conduct business.
Here is a quick overview of what’s happening in Washington, and why these pieces of legislation warrant the attention of physicians and, when possible, their support.
Medicare Conversion Factor Increased

The Bush Administration’s current budget and legislative initiatives include provisions to address the serious Medicare-payment issues facing physicians.
These include recommendations supported by the Medical Group Manage-ment Association (MGMA). Physicians were hit with a 5.4{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} across-the-board reduction in fees in 2002. They were scheduled to receive an additional 4.4{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} cut on March 1, 2003. The scheduled decreases were attributed to a statutory payment formula that based Medicare fees on incorrect estimates of gross domestic product and omission of medical care for about 1 million elderly and disabled Medicare beneficiaries.

The 4.4{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} cut was averted, and the Centers for Medicare and Medicaid Services (CMS) announced the new general conversion factor of $36.79 and the new anesthesia conversion factor of $17.05, to take effect March 1, 2003. This increases physician fees by an average of 1.62{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} over the 2002 rates. The impact of this increase by specialty is available on the MGMA website.

The pesident’s 2004 budget proposes to adjust the statutory formula to use actual data instead of estimates in current and previous updates, which could result in higher updates for the next several years. MGMA estimates that this change could add as much as $40 billion to physician reimbursements. However, legislation will be required to stem a possible 4.2{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} reduction in 2004, as calculated under the old statutory payment formula, which has not yet been repealed.

MGMA has a grassroots campaign to reform the payment formula. It also has a sample letter on its Web site, addressed to congressmen, which it recommends doctors mail in to voice their concerns (www.MGMA.com/members/advocacy).

CMS Reversal of Automatic Repayment Policy

Other good news for physicians and practice administrators is the CMS announcement that Medicare carriers will not proceed with automatic mass repayment collections scheduled to begin in July. When the new conversion factors were published, effective March 1, 2003, CMS announced that physicians may be overpaid at the new rates for services rendered prior to March 1 but submitted thereafter. Accordingly, CMS planned to recover overpayments automatically, beginning in July. In a recent memo, CMS stated:

“If an overpayment exists, you will not be receiving any demand ‘demand’ letters related to an incorrect payment based on the delay of the 2003 fee schedule. This also means that Medicare beneficiaries will not be receiving copies of those ‘demand’ letters that would have potentially caused unnecessary confusion to them.

“You should be aware, however, that if you bring to the attention of the Medicare carrier that an incorrect payment for January or February 2003 was received, the carrier will still process such an adjustment.”

Medical Liability Reform Legislation

The most significant, unpredictable, and uncontrollable cost facing doctors today is medical liability insurance. It has driven doctors to seriously curtail or discontinue services and has had a dramatic negative impact on patient access to quality care.
The U.S. Senate has begun consideration of medical liability legislation. MGMA supports S.11, the “Patients First Act of 2003.” The measure would:

• limit non-economic damages to $250,000 (however, no limit would be placed on economic damages);
• limit punitive damages;
• allow for periodic payment of future damages;
• maximize patient recovery by setting a sliding scale for attorneys’ contingency fees;
• offer proportionate liability among all parties; and
• provide states the flexibility to establish their own limits on damages.

MGMA encourages doctors to write their senators now and urge them to vote for S.11. A sample letter for use in contacting senators is available on its Web site.
This may be a limited window of opportunity for doctors to band together in one voice to a seemingly receptive and supportive majority in Washington.

James B. Calnan, CPA, is partner-in-charge of the Health Care Services Division of Meyers Brothers, P.C., Longmeadow, Certified Public Account-ants and Business Consultants; (413) 567-6101.