Reimbursement prospects and strategies for the future.
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This notice describes the methodology we will use to award fiscal year 1989 incentive payments to carriers that successfully increase the number of participating physicians, i.e., physicians who agree to accept Medicare's reasonable charge for all Part B services that they provide to Medicare beneficiaries. It implements provisions of the Omnibus Budget Reconciliation Act of 1986 and the Omnibus Budget Reconciliation Act of 1987 which require us to publish a notice in the Federal Register describing our system for providing payment of a bonus to carriers based on their performance in increasing the number of participating physicians or the proportion of payment for participating physicians' services in their service areas.
HCFA is proposing to add a new routine use to the "Medicare Physician Supplier Master File," HHS/HFCA/BPO, No. 09-70-0516, to permit the release of the Unique Physician Identification Number (UPIN) to entities that bill for services they performed upon order or referral from a physician.
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The Omnibus Budget Reconciliation Act of 1989 (OBRA '89) eliminates Medicare's "reasonable charge" method of reimbursing physicians, replacing it with a fee schedule based on a relative value scale. The new payment system's major goals are to decrease Medicare's long-term spending growth rate for physician services and to divide Medicare physician payments more equitably. The two major components of the fee schedule are a relative value scale and a conversion factor. With adjustments to accommodate geographical variations in practice costs, Medicare will pay the lower of (1) a physician's actual charge for service or (2) the fee schedule amount. The nucleus of the fee schedule will be a resource-based relative value scale (RBRVS), which is intended to reflect the costs efficient physicians are expected to incur when providing a service. OBRA '89 directs the Health and Human Services (HHS) secretary to review the RBRVS at least once every five years. The conversion factor, which the HHS secretary may calculate separately for all physician specialties combined or for groups of specialties, will initially be based on 1991 aggregate Medicare spending. Thereafter a formula will be used to update the fee schedule each year. Another feature of OBRA '89 will be a cap on fees charged by physicians who do not participate in Medicare. Because a number of tasks remain to be completed before RBRVS can be implemented, OBRA '89 provisions may be delayed. There is even a remote possibility that the new payment system may not be implemented.
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In this article, the author summarizes recently enacted legislation that will result in a phaseout of the traditional usual and customary fee reimbursement system for physicians under Medicare, explains how a system of relative value scales will be implemented, and offers some suggestions for physicians concerned about their economic futures.
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This final rule reinstates a modified version of the initial method of payment for physician dialysis services and clarifies and modifies some of the principles of the monthly capitation payment method. Under both the initial method and the monthly capitation payment method, we specify that, to be payable, physician services must meet certain requirements that distinguish services furnished to individual patients from services furnished to facilities that benefit the facilities' patients generally. The reinstatement of a modified version of the initial method is necessitated by a court order.
Earlier attempts by Medicare to freeze physician fees fell short in controlling rising expenditures. Why did this happen? Some point to the forces of the medical care market. Others look at the influence of physicians.
It has been estimated that physician practice patterns influence more than 70 percent of all medical services. However, the growing demand for medical care does not fall solely at the physician's doorstep.
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This notice announces and invites comments on a model fee schedule for physicians' services that is required by section 6102 of the Omnibus Budget Reconciliation Act of 1989. The model fee schedule provides very preliminary estimates for some, but not all, services to illustrate the effects of the Medicare physician payment fee schedule that will begin to take effect in January 1992. In accordance with section 6102(f)(11), we are making the model fee schedule available to the public through publication of this notice. Any comments received from the public will be considered carefully, but not specifically addressed in a subsequent proposed rule.