Medicare to Increase Hospital Outpatient Payments in 2003

Medicare will increase its 2003 budget for outpatient care by 5.6% but will decrease or hold flat its reimbursements for some drugs and medical devices, Bloomberg/Detroit News reports. The budget for hospital outpatient procedure reimbursements will increase to $18.7 billion in 2003, up from $17.7 billion this year (Hallam, Bloomberg/Detroit News, 11/1). Payments for each hospital outpatient procedure will increase 3.7% on average, according to financial statements released Oct. 31 by CMS. Rural hospitals will get slightly higher rate increases, AP/Long Island Newsday reports. The increase is part of a change in payment system authorized by Congress in 1999 as part of an attempt to lower the out-of-pocket costs for beneficiaries. The new system pays hospitals "specific, predetermined rates" for such care. Under the old system, beneficiaries' copayments increased as hospital charges increased (Carter, AP/Long Island Newsday, 10/31). Meanwhile, Medicare reimbursements for pacemaker insertion will decrease from $7,655 to $5,870 in 2003, and reimbursement for defibrillator insertion will decline from $19,428 to $17,013. Reimbursement for a dose of Johnson & Johnson's Procrit, a treatment that stimulates blood cell production, will remain stable at $9. The federal government examined 45 million Medicare claims from hospitals to establish the final reimbursement rate for outpatient services. To determine reimbursement for prescription drugs and medical device services, the government compared its costs with prices paid by private purchasing groups. The final reimbursement rule will be published Nov. 2 in the Federal Register, and the payment changes will take effect Jan. 1 (Bloomberg/Detroit News, 11/1).

Physician Reimbursements
Meanwhile, federal officials did not release data on Medicare reimbursements to physicians, citing analyses of payments to anesthesiologists for the delay. Medicare reimbursement to physicians was cut 5.4% in January, and doctors face an additional 12% cut, totaling $11 billion, in Medicare payments over the next three years, according to the American Medical Association. Physicians have been lobbying Congress to address what they say are inadequate Medicare reimbursement levels (AP/Long Island Newsday, 10/31). In June, the House passed a $30 billion Medicare package that includes provider giveback provisions. The Senate has failed several times to pass similar legislation (Kaiser Daily Health Policy Report, 10/24). Lawmakers say they plan to address the issue during the lame-duck session after the elections, AP/Newsday reports (AP/Long Island Newsday, 10/31).