New Era of Medicare Payment to be Accompanied by MVPS It's official. In two years, Medicare ment cyrfos. will begin to dismantle its current charge-based physician system and In addition, the replace it with a revolutionary new reforms - which fee schedule that is expected to would base pay­ slice payments for surgery while ment on time, skill, and the other resour­ boosting fees for medical evaluation ces needed to and management. deliver a service - After years of preparing for the will place new limits change and months of haggling, on MDs' charges to lawmakers, as one of the last acts of their patients and in­ this session, adopted a proposal troduce the concept that would begin a five-year phase- of volume controls in of the new fee schedule on into Medicare forth© it falls short of the controversial ex­ January 1, 1992. Part of a three- first time. Called a Medicare penditure targets preferred by the part MD payment reform, the fee Volume Performance Standard Bush Administration and the Ways schedule is tied to a congressional (MVPS), the volume mechanism is and Means Committee. budget package that includes more stringent than one adopted by more than $1 billion in MD pay­ the Senate Finance Committee. But (Continued on page 2) INSIDE PCMS Notes from the President NEWSLETTER I look forward to serving you as physician” in the community invol­ 1990 Committee Chairs ..11 your president in 1990 and I look for­ ves many aspects - including ac­ ward to working with as many of cess to care, the involvement of the 1990 Legislators 12 ......... you as I can during the next year to physician in the community, the 1990 Officers.... ............10 meet the goals of the Pierce County visibility of physicians in educating Applicants......... .............. 5 Medical Society. the public in medical-related topics, and contributing our time, talent, Auxiliary News... ............ 14 The recent survey that you and treasure to non-medical com­ answered revealed that the “image Classified.......... .............15 munity projects. I believe that you of the physician” should be the top C.O.M.E............ ............... 4 will find the major theme of my priority for the Pierce County Medi­ presidency related to these impor­ Election Results ............... 9 cal Society. This was also on the tant areas. Newsbriefs....... ............6 top of my list and it is for that New Members.. ............5 reason that I am going to em­ phasize it as my first priority during (Continued on back) my presidency. The “image of the MVPS argued that the current charge- The remaining services would get (Continued) based system favors technical pro­ there in steps, with payments each cedures and urban areas over rural year based partly on the RBRVS The AMA had backed the new fee communities and primary care. The and partly on the prior year’s schedule while pushing hard lor the new fees are expected to address blended payment (updated for infla­ tion). In 1993, the blend will be 25% defeat of the expenditure target these complaints. plan. AMA Executive Vice President RBRVS and 75% prior year’s pay­ For example, in looking at an earlier ment. In 1994,33% of the payment James H. Sammons, MD, hailed the and slightly different version of the enactment of the new payment sys­ will be based on the RBRVS. In fee schedule, PPRC estimated that 1995, the split will be 50-50; and in tem as “ a very positive move." “We family physicians would see a 38% 1996, fees will be based completely are pleased that the expenditure tar­ hike in Medicare income, while on the RBRVS. get proposal has been soundly surgeons’ income could fall by 11 % rejected,” he added. on average and by up to 20% for Proponents of payment change thoracic surgeons. Part of a three-part MD payment reform, the fee pointed to tremendous regional Similarly, the fee schedule, which variation in Medicare payments and calls for a 10% bonus payment in schedule is tied to a con­ rural and urban areas with a gressional budget pack­ shortage of MDs, is expected to im­ age that includes more PCMS Officers: prove payments in some rural than $1 billion in MD Gordon & Klatt President areas. However, a report from the ■William G. Marsh President-elect payment curbs. John B. Coombs Vice President Health Care Financing Administra­ Joseph H. Weam Secretary-Treasurei tion indicated that some rural states William T. Ritchie Past President These sweeping new payment could see little or no overall in­ modifications also will affect crease in Medicare payments as a Medicare patient’s co-payments Stuart D. Freed result of the changes. K . D avid M cC ow en and couid lead to changes in the A . R obert T hiessen David E. Law Most of the regional variations in number of MDs who bill patients for Anthony S. Lazar the balance between the Medicare William F. Roes fees would level out. But some pay­ Alice Wilhyde ment differences would remain, fee and their normal charge. Con­ since the fee schedule is to be ad­ gress thus has included several PCMS Newsletter is published eight justed to take account of provisions aimed at protecting limit­ tim es a year by PC M S M em bership Benefits, Inc., for members of the Pierce geographic discrepancies in prac­ ing patients who could face addi­ County Medical Society. The Pierce tice expenses. tional out-of-pocket expense. County Medical Society is a physician member organization dedicated to the art, science and delivery of medicine and In addition, at the insistence of the One would require MDs, as of April the betterment of the health and medical Energy and Commerce 1, 1990, to accept assignment of welfare of the community. Committee’s health subcommittee the Medicare allowance and forgo A dvertising and new sletter copy m ust ar­ balance billing for elderly citizens rive in the Society office by the 15th day chairman, California Democrat o f th e m onth preced in g th e publication Henry Waxman, one-fourth of the whose Medicare premiums and co­ date. Advertisements in this newsletter payments are paid by state are paid and not necessarily endorse­ regional variation in professional ments of services or products. Wc wel­ earnings will be taken into account Medicaid programs. Another would come and invite your letters, comments, require physicians to file all claims ideas and suggestions. in setting the fees. This provision runs counter to the advice of PPRC, (whether payment was assigned or the AMA, and most medical groups, not) within a year and prohibit char­ Editor: which had argued against an adjust­ ges for this service. The third sets David S. Hopkins ment for regional earning differen­ new limits on balance billing. ces. It also is expected to prove Managing Editor: The new limits extend the current D ou glas Jackm an slightly more favorable to urban maximum allowable actual charge Editorial Committee: areas and slightly less so to rural (MAAC) limits into 1991 and ’92. In David S. Hopkins (Chairman), communities than if only practice Stanley Tuefl, addition, they impose a new cap of W. Ben Blackett, costs had been considered. Richard Hawkins 125% of the Medicare payment in Publications Coordinator: To spread out payment shifts and 1991 and 120% in 1992. Payment Monique Johnson give MDs and their patients time to in both years is to be the MAAC or Advertising: adjust, the proposal calls for a five the cap, whichever is lowest. In Kim R eed year phase-in. In 1992, the histori­ 1993 and thereafter, no charge can MBI, Pierce County Medical Society, 572- 3709 cal charge would be raised or exceed 115% of the Medicare fee. lowered by up to 15% to bring the Pierce County Medical Society By far the most controversial 705 South 9th St., Suite 203 Tacoma, WA price for services closer to, or in line 98405 provision in the measure, however (206) 572-3667 with, the RBRVS fee. Services with payments that are due to shift by is its proposed Medicare Volume © PCMS 1989 less than 15% thus would move im­ (Continued on page 3) mediately to the RBRVS. Page 2 • Janauary 1990 • Vol. 5, #7 Performance Standard. Intended to in determining future fee updates. bring down the rate of growth in Medicare’s spending for physician The Finance plan was seen as a pos­ Procedures sible compromise all parties could services, the notion of attaching a Targeted By volume curb to fee schedules grew live with. But participants say out of a PPRC recommendation that heated negotiations, which PPRC For Cuts called for Medicare expenditure tar­ deteriorated into name-calling at one point, got hung up over Stark’s gets. insistence that the reform plan in­ Congress cut Medicare spending by trimming MD fees on these pro­ Under the PPRC plan, Congress cludes a volume curb that would cedures: and the administration would have automatically recoup any spending set an annual target for Medicare in excess of the goal set by govern­ ‘ Breast surgery *Hip procedures spending on physician services. ment. ♦Bunion correction Then, if actual spending exceeded ‘ Knee arthroscopic procedures the target, fees were to be adjusted Under the compromise, the MVPS ‘ Sinus procedures in subsequent years to automat­ in 1990 is to be set by a compli­ '‘Larynx surgery ically recoup the spending in excess cated formula that essentially would *Lung surgery permit physician expenditures to ‘ Pacemaker procedures of the target. Dubbed ETs, the ‘ Replacement of aortic valve proposal was seized on by Rep. grow by 0.5% less than if there had ■“Coronary artery bypass Fortney “Pete” Stark (D, Calif.), who been no volume standards.