Managed Care


Medicare holds down physician pay

MANAGED CARE September 2002. © MediMedia USA
Compensation Monitor

Medicare holds down physician pay

MANAGED CARE September 2002. ©MediMedia USA

Compensation increased at a comparatively small rate from 2000 to 2001 for both primary care physicians and specialists, according to the Medical Group Management Association. The rate of increase for all primary care was only 1.2 percent — about half the previous year's change, and one third of the 3.4 percent increase in 1998–99. The main culprit is falling reimbursement rates for Medicare, according to William Jessee, MD, the MGMA's chief executive officer, who warns that compensation gains may disappear altogether this year due to a 5.4 percent Medicare reimbursement cut. He notes that while the Centers for Medicare and Medicaid Services plans to implement "MGMA-supported administrative adjustments" in 2003 to improve the measurement of physician productivity under Medicare, the agency needs to take additional administrative steps to address the additional 4.4 percent Medicare fee reduction projected next year.

"Physician group practices continue to serve a growing population of older Americans, despite the fact that annual Medicare reimbursement increases have lagged behind actual practice costs by an average of 2.7 percent each year for the last decade," Jessee says. "In the long run, this situation is financially unsustainable." MGMA proposals include the removal of Medicare-covered drugs from the definition of "physician services" and having CMS correct Medicare enrollment projection errors that have compounded the current payment shortfall.



Private Health Insurance Exchanges Conference Washington, D.C. October 7–8, 2014
National Healthcare Facility Management Summit Palm Beach, FL October 16–17, 2014
National Healthcare CFO Summit Las Vegas, NV October 19–21, 2014
National Healthcare CXO Summit Las Vegas, NV October 19–21, 2014
Innovative Member Engagement Operations For Health Plans Las Vegas, NV October 20–21, 2014
4th Partnering With ACOs Summit Los Angeles, CA October 27–28, 2014
2014 Annual HEDIS® and Star Ratings Symposium Nashville, TN November 3–4, 2014
PCMH & Shared Savings ACO Leadership Summit Nashville, TN November 3–4, 2014
World Orphan Drug Congress Europe 2014 Brussels, Belgium November 12–14, 2014
Medicare Risk Adjustment, Revenue Management, & Star Ratings Fort Lauderdale, FL November 12–14, 2014
Healthcare Chief Medical Officer Forum Alexandria, VA November 13–14, 2014
Home Care Leadership Summit Atlanta, GA November 17–18, 2014