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SUMMARY OF MEDICARE REIMBURSEMENT CHANGES
(PREPARED BY THE ASSOCIATION OF AMERICAN MEDICAL COLLEGES)
PAYMENT FOR PHYSICIAN SERVICES FURNISHED IN INSTITUTIONAL PROVIDERS OF SERVICES
l. Proposed Rule
2. Effective Date: not specified
3. Comment Date: through November 1, 1982
Federal Register of October 1; 1982, pp. 43578-43608
These proposed regulations revise and modify Eiedicare rules for physicians' services provided in hospitals. Initially the regulations separate physicians' services into (1) services provided ded to individual patients and (2) services provided to the hospital, such as supervision and quality control. Physician services will be considered services for individual patients if they:
must be personally furnished for an individual patient by a physician;
require performance by a physician,and are not frequently and consistently furnished by nonphysicians; and --
contribute to the diagnosis and treatment of an individual patient.
Physician services meeting those criteria will be paid (1) on t he basis of usual and customary charges subject to Medicares prevailing fee limit s if (2) the physician charges all patients for these services and if (3) the physician retains the fees. Where the physician does not retain all fees but assigns them to an entity which pays the physician a salary, salary, rather than billed charges Medicare will use the physician's to determine the physician's fee. In the regulatory preamble HCFA indicates some physicians' type of exception will be permitted for an exception services provided in teaching hospitals. is not specified in these regulations. The form and extent of such
While the proposed regulations apply to all specialties, special payment conditions are proposed for anesthesiology, pathology, radiology, and leased departments.
- Anesthesiology: If a physician personally performs a single anesthesia procedure, he/she would be paid a full fee. If a physician personally directs no more than two concurrent anesthesia procedures, he/she would be paid on a reasonable charge basis with a ful fee allowed for each procedure if the physician employs the anesthetist. If a physician
supervises more than two concurrent anesthesia procedures, the physician's services would be defined as hospital services payable only on a reasonable cost basis through the hospital.
- Pathology: In general, clinical pathology services would be paid only on a reasonable cost basis through the hospital because these services are frequently and consistently performed by nonphysicians. An exception, allowing fee for service. payment, would be made (I) for formal, written consultation on patients with abnormaltest results and (2) for certain clinical laboratory services a physician personally performs for an individual patient.
- Radiology: Services for both inpatients and outpatients would be, divided into those generally available in physicians' offices and those generally provided only in hospitals. Reasonable charges for services performed in a hospiral, but generally available in physicians'offices, would be allowed if they did not exceed-40% of the prevailing fee for office-based services. Reasonable charges for services generaliy performed only in hospitals would be determined using the present prevailing fee limits.
- For services furnished in leased departments, Medicare would have the authority to"look through" the lease and separate the leased department into (I) physicians' services furnished to individual patients and payable on a reasonable charge basis and (2) all other activities payable only on a reasonable cost basis through the hospital.
When a physician service does not meet all three criteria used to identify services to individual patients,Medicare would allow the physician to be compensated only through the hospital's cost report. While the form of the hospital-physician compensation arrangements is not prescribed by the regulation,' Medicare would limit the hospital's allowable costs for physicians' services to the lesser of actual costs incurred or a compensation ceiling set by specialty and 'location and published on page 33587.
Lastly, the regulations propose elimlnation of the combined charge form (HCFA 1554) presently used oy some hospitals. When this form is used, separate charges for each , physician service are not identified.
AAMC Initial Concerns
This proposed rule is very complicated and may have far reaching impacts on relationships between physicians and hospital;. HCFA has allowed only a 30 day comment period. AAMC members are urged to immediately write Secretary Richard S. Schweiker requesting extensionof the comment period to 90 days.
While this proposed rule raises many issues that must be-considered to assess its local impact,the following five seem to be of most general concern.
1. If a physician bills all patients and individual patients, the proposed regulations determine the physician's usual and customary assigns his fees to an entity and that entity retains all income from services to would use billed charges to fees. If, however, the physician compensates the physician for his
services to individual patients,the physician's usual and-customary fees would be determined using the compensation received by the physician from the entity. While the proposed regulations indicate that some type of undefined exception will be proposed for physicians practicing in teaching hospitals, the AAMC has repeatedly taken the position that the way in which a properly earned fee is used should not alter the amount of the fee allowed. HCFA should be strongly urged to revise the regulations to permit all physicians in all hospitals to be paid on the basis of billed charges for services to individual patients unless the physician elects to have his fees determined using his compensation.
2. The proposed regulations do not clearly ensure that'the appropriate portion of a physician's total compensation will be matched with the corresponding portion of his/her time allocation in applying the reasonable compensation equivalent or computing fees based on compensation. HCFA should be encouraged to revise the regulation to ensure (1) that compensation for services provided to the hospitals is compared only with the time actually spent performing those services and (2) that where compensation-based fees for individual patient services are elected, only the time spent and compensation received for individual patient, services should be used to determine fees.
3.. The proposed regulation generally eliminates Medicare payment on a fee-for-service basis for clinical, pathology. The Association believes it is unnecessary to preclude all fee-for-service arrangements in order to address the government's concerns: In 1979, a report from the Senate Finance Cotnnittee, Senate Report 96-471, would have permitted compensation for pathology services based on an approved relative value scale . ..which takes into consideration such physician's time and effort consistent with the inherent complexity of procedures and services." The AAMC continues to support a relative value scale approach as one compensation approach for pathology services.
4. In commenting upon the allowed compensation limits, AAMC members should recognize that the limits published on page 43587 are based upon a work year of 2080 hours (52 weeks of 40 hours per week). A salaried physician who works 60 hours per week would be permitted 1 l/2 times the published ceiling. This HCFA approach necessitates that hospitals use time, rather than effort, data to compute full-time equivalents and the resulting limitation.
5. Physician billings which are not permitted under the regulations would be treated as violations of the hospital's Medicare provider agreement. While the AAMC could support holding the hospital responsible for physician billings made by the hospital, the Association cannot support holding the hospital responsible for the billing violations of each member of its medical staff, even if the responsibility extends only to services provided in the hospital. Therefore, the AAMC believes HCFA should revise the regulations to hold physicians and their billing agents solely responsible for billings for physicians' services made in violations of any final regulations.
LIMITATION OF REASONABLE CHARGES FOR SERVICES IN HOSPITAL OUTPATIENT SETTINGS
1. Final Rule with Comment Period
2. Effective Date,: October 1, 1982
3. Comment Date: Accept comments mailedbyNovember30,1982
Federal Register of October 1, 1982, pp. 43610-43616
In general, Medicare allowable fees for services provided in physician offices, where the physician incurs overhead and practice expenses, have been the same as allowable Medicare fees for physician services provided in hospital outpatient settings, where the hospital can submit a claim for the overhead costs of clinics. Under this regulation, Medicare fees for physicians' services provided in a hospital outpatient setting where the hospital recovers outpatient overhead costs from the Medicare program , will be reduced to 60% of the fee allowed for similar services provided in a physician's private office. Services excluded from the reduction to 60% of the prevailing fee are rural health clinic services, ambulatory surgical services , emergency room services provided to prevent death or serious health impairment, services paid on the basis of compensation-related fees, anesthesia services, and radiology services. Local Medicare carriers will determine the services covered by the fee reduction and apply the reduction to emergency, outpatient, and clinic settings.
AAMC Initial Concerns
1. If ,a hospital follows Medicare accounting requirements, outpatient clinic and emergency service overhead will be greater than the overhead of an office practice. To provide equity between hospital and office services, HCFA should revise the regulations to pay 100% of prevailing fees when physicians in hospital outpatient settings make overhead payments comparable to those incurred in private offices.
2. Office-based physicians seldom incur costs for residency training, but Medicare cost principles require hospitals to include residency costs in the overhead of outpatient clinics and emergency services. HCFA should revise the regulations to permit physicians in hospital settings to be paid 100% of prevailing fees even if a hospital claims overhead costs for educational programs.
3. No regulatory standard is provided f o r defining services "routinely provided" in office settings. Different carriers may establish substantially different criteria for defining "routinely provided."
4. In determining Medicare payments,the regulation proposes using 60% of the nonspecialist prevailing charge. Outpatient and emergency services in teaching hospitals are provided primarily by specialists, and HCFA should revise the regulations to use the specialist prevailing charge when a specialist provides the patient service.
5. The regulation invites public comment on the appropriateness of allowing full fee payment in emergency services only for services necessary to prevent death or serious health impairment. It is important that comments and suggestions on the reasonableness of this approach be made.
ASSISTANTS AT SURGERY.
1. Interim Final Rule with Comments
2. Effective Date: October 1, 1982
3. Comment Date: Accept comments mailed by November1, 1982
Federal Register of October 1, 1982, pp. 43650-43654
For the services of assistants at surgery, Medicare payment in all hospitals is limited to no more than 20% of the area prevailing fee for the surgical procedure. In addition, in teaching hospitals, Medicare will not pay for an assistant at surgery in a specialty having a training program except'for exceptional medical services,complex procedures requiring a team of physicians, or patients requiring the services of a physician of another specialty. If the teaching hospital documents that no resident was available to assist in a' particular case, an assistant at surgery fee may be allowed.
AAMC Initial Concerns
1. The regulation presumes that a resident is always available if the hospital has a training program related to the required surgical procedure. No consideration is given to affiliated hospitals with small training programs or those in which all surgeons do not involve residents 'in the care of their patients. HCFA should revise the regulation to permit payment for an assistant at surgery where the surgeon does not involve a resident in the care of his patient.
2. The regulation states"failure to adequately schedule a resident's time does not constitute unavailability"to serve as a surgical assistant. The statement implies no recognition for the non-O.R. components of surgical training and appears to require that a surgical resident be available for operating room time irrespective of other necessary educational responsibilities. AAMC members should communicate the importance of non-O.R. activities for surgeons in training.
3. Use by HCFA of a trauma case to exemplify exceptional medical service
involving primary and assisting surgeons may more accurately illustrate
a circumstance in which a team of physicians should each be entitled to
a primary surgeon's fee. Clarification of this point should be requested.
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