¶ … Medicare payments to physicians have come under some serious controversial debate lately due to erroneous calculations by CMS. This issue is raised in a recent article published in Ophthalmology Times where author, Neal Freeman, explains the variables used to calculate sustainable growth rate in Medicare payments systems which directly affects physicians' payout. The author first focuses on the estimates used to calculate sustainable growth rate in Medicare. These factors include "estimates in changes in physicians' fees, changes in the average number of Medicare beneficiaries, changes in expenditures due to regulatory changes, and growth in per capita gross domestic product." Once this has been determined, the government establishes an index of target and actual expenditure. A fee schedule for physicians is then determined with resource-based relative value system. There is a general resentment against this method for calculate of physicians' payments under Medicare. It is believed that this method of sustainable growth rate determination is erroneous and leads to errors in establishing and updating fee schedule. " ....the system is based on estimates, which often prove erroneous. The fee schedule is thus sensitive to estimation error, and physicians have suffered as a result of such errors." Freeman further focuses on another complaint that physicians have with Medicare reimbursement method. If a patient receives outpatient drug administration from doctor's clinic, it is seen as physician expenditure. This means the doctors are not separately reimbursed for these drugs causing reduction in actual physician payouts. "It is argued that drugs are a product rather than a medical service and that doctors are not reimbursed through the procedural fee schedule for the drugs." The author argues against such problematic fee schedule determination and the errors that occur in fee calculations. The doctors stand to lose from this system and resentment grows.
Reference
1. Freeman, L. Neal, Physician payments hinge on sustainable growth rate factor: system can be confusing, but does bear a crucial role in physician compensation.(Medicare reimbursement) Ophthalmology Times; 10/15/2004
