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Medicare fee fix ‘fatally flawed’

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WASHINGTON — Physicians’ Medicare reimbursement rates are likely to fall next year, despite Congressional action taken last month to offset the decline in payments, experts predict.

In a letter to the Medicare Payment Advisory Council, Tom Grissom, director of the Center for Medicare Management, said while the group had previously predicted positive increases in payment rates for 2004 and later, “we now estimate (physician payment inflation changes) will be negative for 2004-2007,” according to Reuters.

Although average physician payments declined in 2002, physician expenditures increased about 7%. That, coupled with Medicare’s reimbursement rates being tied to the U.S. economy, means a lower reimbursement rates in years to come, Reuters reported.

The American Medical Association president told Reuters his group also believed the problem had been fixed, but that the new estimates showed the formula to be “fatally flawed,” Yank Coble, Jr., MD, said.