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Conversion factor reduction results in cataract cuts
While Congress remains diverted by economic and national security issues, ASCRS, AAO and AMA work to reverse Medicare reimbursement reductions.
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Medicare reimbursement for cataract surgery and IOL implantation in 2002 will be $669.32, down from $742.59 in 2001. The payment rate is based on the Medicare Physician Fee Schedule conversion factor of $36.19, which represents a 5.4% reduction in Medicare payment rates to all physicians since 2001.
“This reduction in the conversion factor is the result of a –4.8% update to the physician fee schedule, together with additional reductions based on increases in work relative value units (RVUs) and projected volume increases due to practice expense changes,” according to the American Society of Cataract and Refractive Surgery (ASCRS).
If this cut goes into effect, it will be the fourth cut in physician payments in 10 years. The Medicare Payment Advisory Commission (MedPAC) is on the record warning that significant cuts next year “could raise concerns about the adequacy of payments and beneficiary access to care.” MedPAC has advised Congress to replace the current Medicare payment formula with one that more fully accounts for physicians’ costs.
At press time, ASCRS, the American Academy of Ophthalmology (AAO), the American Medical Association (AMA) and numerous other physician groups were lobbying Congress and the Centers for Medicare and Medicaid Services (CMS), formerly the Health Care Financing Administration, to “adopt various administrative solutions to prevent this negative update,” according to ASCRS.
Congressional focus
Since the September 11 attacks, Congress is highly focused on terrorism and the sagging economy, the Academy pointed out in a recent press release.
“Despite this…, several members of Congress have pledged their help in trying to correct the update formula,” the AAO statement said.
“Without congressional action now, the Medicare program will suffer a 5.4% cut, endangering access to quality patient care for our seniors. Congress must act now to keep Medicare beneficiaries from suffering the same access problems that challenge Medicaid beneficiaries,” said AMA Chairman Timothy T. Flaherty, MD. “Physicians have not abandoned their Medicare patients, but decreasing Medicare reimbursement and increasing Medicare regulation may make it difficult for new Medicare patients to find a physician. Press reports in many areas of the country report that Medicare patients are finding it more difficult to find a physician. Nearly 30% of family physicians are not accepting new Medicare patients.”
“Applying the actual numbers for 1998 and 1999 rather than the inaccurate CMS estimates would avert an across-the-board cut. Congress never intended for our nation’s seniors to be penalized by the use of flawed estimates,” he added.
Flawed formula
This conversion factor is a result of the current flawed formula used to update physician payments, according to ASCRS.
“Last March, Congress was warned by the Medicare Payment Advisory Commission that the current system’s use of the sustainable growth rate to update physician payments fails to account for all relevant factors that affect the cost of providing physician services,” an ASCRS press release stated.
“Under the current system, the utilization of services per beneficiary is allowed to increase only by as much as the gross domestic product (GDP) increases. When GDP growth is strong, payment updates are more likely to keep pace with inflation in practice costs, but declining GDP growth will generally lead to physician payment cuts. Even though the GDP has no impact on health care needs, an economic downturn can lead to steep reductions in Medicare payments to physicians.
“In addition, payment cuts could have been avoided for 2002 if significant errors had not been made in calculating previous expenditure targets. These errors, in addition to the downturn in the GDP, made this year’s target billions of dollars lower than it should have been.”
The Medicare physician fee schedule final rule also includes several changes to the calculation of practice expense RVUs. According to ASCRS, a decision to recalculate the practice expense-per-hour data based on updated data from the AMA’s Socio-economic Monitoring System (SMS) survey resulted in a 1% reduction in payments for procedures performed by ophthalmologists. CMS proceeded with this proposal despite concern voiced by ASCRS and other medical societies that the quality of the 1999 SMS data did not merit inclusion in CMS’ calculations.
For Your Information:
- A complete copy of the 2002 Medicare Physician Fee Schedule can be found in the November 1 issue of the Federal Register. A complete fee schedule for all ophthalmic services can be found on the AAO Web site at www.aao.org.