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MedPAC Recommends Physician Reimbursements be Based on Cost of Providing Care

ACP-ASIM Supports Revision of the Update Formulas

(Washington, DC) The Medicare Payment Advisory Committee's (MedPAC) January 16, 2002 recommendation to revise the formula that calculates annual updates to the Medicare Physician Fee Schedule received support from the American College of Physicians - American Society of Internal Medicine (ACP-ASIM).

"MedPAC's recommendation to base a new update formula on the rising cost of providing health care services represents a more sustainable approach to updating the fee schedule," stated William Hall, MD, FACP, president of the ACP-ASIM. "A cost-based update would ensure that shifts in the economy would not threat Medicare patients access to high quality care."

The current update formula is based in part upon the Sustainable Growth Rate (SGR), which links the annual update to changes in the gross domestic product. ACP-ASIM has called for a revision in the formula since it was first introduced, claiming that it failed to account for changes in the cost of proving health cares services to Medicare beneficiaries.

"Congress and the Centers for Medicare and Medicaid Services (CMS) have acknowledged that this year's 5.4 percent reduction in physician reimbursements was due to a flawed formula, "stated Dr Hall. "We urge the President and Congress to act immediately to restore the reductions, before patient care is affected by the cut in resources."

"In many areas, CMS is making headway in reflecting costs more accurately in the valuation of one service versus another," stated Dr Hall. " We hope to see the same headway in developing a rational methodology to update the overall physician fee schedule."

ACP-ASIM is the nation's largest medical specialty organization and the second largest physician group. Membership encompasses more than 115,000 internal medicine physicians and medical students.

Jennifer Whalen, (202) 261-4575, jennw@acponline.org

Page updated: 11-04-03

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