CMS to increase 2003 physician payment rates

May 1, 2003

Pharmaceutical Representative

The Centers for Medicare & Medicaid Services has issued a regulation that will boost Medicare payment rates to physicians.

The Centers for Medicare & Medicaid Services has issued a regulation that will boost Medicare payment rates to physicians. Under the rule, payments for physician services will increase an average of 1.6%.

"The corrections we have made to the formula will have a positive impact not only in 2003, but for future updates," said CMS Administrator Tom Scully. "More importantly, this rule restores the confidence of physicians, and patients, that the federal government will be a fair partner in the Medicare program."

Physicians are paid for their services according to a fee schedule that is updated annually according to a formula set out in Medicare law. In 2002, the statutory formula required Medicare to reduce rates paid to physicians. The law would have required Medicare to reduce rates again in 2003 (see Pharmaceutical Representative, March 2003). The recently enacted spending bill for fiscal year 2003 allowed CMS to revise figures used in the statutory formula and increase the update for 2003 from a negative 4.4% to a positive 1.6%.

'Good news for Medicare patients'

The Chicago-based American Medical Association praised the new payment rule and said the rule had averted a "meltdown" in the Medicare system for 2003.

"The Medicare physician payment provision in the budget bill helps shore up Medicare's foundation," said Yank D. Coble Jr., president of the AMA. "America's seniors should not pay for the government's mistakes, and we are pleased that both Congress and President Bush recognized that and will stop the Medicare cuts for 2003 and fix past mistakes."

"This is good news for Medicare patients and the physicians who care for them," Coble added. "We must continue to work on longer-term solutions to keep the Medicare program strong for America's seniors." PR

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