Medicare gave you a raise. Have you noticed?

Short Take Medicare gave you a raise. Have you noticed? A little more money, a little more confusion, and several new codes are coming from HCFA. By Michael Pretzer Washington Editor Eventually, it had to happen. The Health Care Financing Administration increased Medicare fees for most doctorsthough hardly by an exorbitant amount. "Medicare payment rates to physicians will increase by 4.5 percent overall," says the federal agency. The Medicare conversion factor, used annually to adjust physician fees, rose to $38.2581, from last year's $36.6137. It was the second consecutive hike for doctors. Not all physicians will get the same raise, however. HCFA is still phasing in the resource-basing of practice expenses, a complicated process that is to occur over a four-year period. (We're now in year 3.) As a rule, the practice-expense change is boosting generalists' fees and holding down those of specialists. When all thingsincluding practice expenseare considered, family physicians are likely to see a 6 percent raise this year, internists a 5 percent increase (see chart below). On the other hand, cardiologists, cardiac surgeons, and neurosurgeons are likely to receive only a 1 percent raise. Gastroenterologists get an even worse deal: no increase at all. But nobody faces a pay cut in 2001. From the beginning, the resource-basing of practice expenses has been controversial. Specialistsunderstandablyhave been the most critical. They say that among other things, the data used to calculate expenses comes from surveys that are too small to be useful. Last year, some 30 medical specialty societies formed a coalition to lobby legislators. The coalition wants Congress to freeze the resource-basing of practice expenses. To date, the effort has been unsuccessful. But HCFA isn't ignoring the protests. In the official announcement of the 2001 Medicare physician fee schedule, the agency responded to its critics at great length. "Ideally, we would like to calculate practice-expense values with precision; however, we recognize that we must maintain a balance," explained HCFA. "Conducting surveys is expensive, and there is a tension between achieving large sample sizes, which increase precision, and smaller ones, which conserve costs." HCFA promises that one of its "major priorities" is to fine-tune the way practice expenses are resource-based. To that end, the agency says it welcomes new, accurate data from specialty societies and others. Submissions, so long as they satisfy the criteria HCFA published along with the 2001 fee schedule, will be accepted until August. In addition to adjusting physician fees, HCFA created new codes relating to home health care. Some of the codes have drawn praise from physicians; some have not. HCFA established G0181 for physician supervision of services delivered by a home health agency, and G0182 for supervision of services from a hospice. The action hasn't been well received for a couple of reasons. First, doctors are displeased that HCFA developed the codes without involving the CPT Editorial Panel. But they're even more upset because the new codes will let HCFA circumvent the new, more expansive CPT health care oversight codes. The old CPT oversight codes, whose definitions HCFA has adapted for G0181 and G0182, limit a physician's discussions of patient care to conversations with other health care professionals. The new codes, which HCFA won't be using, include discussions with family members. "The American College of Physicians-American Society of Internal Medicine strongly opposes the new G codes for care plan oversight and urges the agency to adopt the revised codes in CPT 2001," says Brett Baker, a senior associate at ACP-ASIM. "Recognizing family discussions is cost-effective. It's likely to encourage closer physician-family interaction that can improve patient care." HCFA also established G0180 for the initial certification of home health services, and G0179 for the recertification of the services. "This change was made to emphasize the importance of physician involvement in home health services under the new prospective payment system for home health services," explains HCFA. For this action, physicians are applauding. Never before have they been compensated for the certification and recertification of home health care. The only objection to G0180 and G0179 seems to be that they are G codesdeveloped independently by HCFA. "Although we support the certification and recertification G codes for the 2001 Medicare fee schedule, we recommend that HCFA submit a proposal to the American Medical Association's CPT Editorial Panel to establish CPT codes for these services," says Baker. HCFA also tried to rectify some of the problems associated with observation and inpatient hospital care services, including patient admissions and discharges. Medicare's old reimbursement policy was a little quirky. Last year, as HCFA explains it, a physician who admitted a patient for observation or for inpatient care at 8 am and then discharged him at 8 pm the same day was paid only for the admission service. On the other hand, a physician who admitted a patient to observation or to inpatient care at 8 pm and then discharged him at 8 the next morning was allowed payment for both the admission and discharge. Here's HCFA's directive to physicians regarding its new hospital and observation care policy: For observation care of less than eight hours on the same calendar date, use CPT codes 99218, 99219, and 99220; do not bill for discharge. For an inpatient admission and discharge less than eight hours later on the same calendar date, use CPT codes 99221, 99222, and 99223 for the admission; do not bill for discharge. For inpatient or observation care of at least eight hours on the same calendar date, use admission and discharge CPT codes 99234, 99235, and 99236. For observation care where admission and discharge are on different calendar dates, use CPT codes 99218, 99219, and 99220, and observation discharge code 99217. For inpatient hospital care of 24 hours or more, use CPT codes 99221, 99222, and 99223, and hospital discharge code 99238 or 99239. HCFA's new policy, well-intentioned no doubt, has failed to satisfy physicians. It's more confusing than ever, and it's no fairer than before the change, argues ACP-ASIM. The policy "will create as many inequities as it purports to resolve," says the association. And it's "likely to compromise administrative simplicity." In total, reimbursements for physician services are expected to reach $40 billion in 2001, an increase of about 8 percent from 2000. And while doctors are making a little more, their Medicare patients will be paying more. This year the monthly premium for Medicare Part B rose to $50, an increase from last year of about 10 percent. How big is your Medicare fee increase this year? Michael Pretzer. Medicare gave you a raise. Have you noticed?. Medical Economics 2001;3:26.