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Physician Fee Cuts Also a Possibility

Physician Fee Cuts Also a Possibility

As if the prospective Medicare cuts in payments for outpatient chemotherapy drugs were not troubling enough, there is another dark Medicare cloud. The American Medical Association (AMA) is predicting that Medicare may also cut physician fees across the board in 2002. A decision on that will not be made until November, when the CMS presents final numbers for the Medicare Economic Index (MEI), an inflation adjustment, and the Sustainable Growth Rate (SGR), which describes how much under or over a preset target physicians’ bills to Medicare were in a given year. 

If physicians keep their billing below the increase in the gross domestic product, then the MEI is increased, leading to a higher fee "update." In the opposite scenario, the MEI is decreased. Based on preliminary forecasts, the AMA believes that physician fees could be cut 2% to 3% in 2002. (That would be after increases of 5.4% and 4.5% in 2000 and 2001.) The AMA is trying to get the CMS to make some administrative changes in the way the MEI and SGR are calculated—changes that perhaps would result in a zero change in 2002. But in a letter to medical specialty societies, Robert Gilmore, MD, an AMA official, said, "I cannot overemphasize how difficult this battle could be."

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