CMS predicts Medicare physician payment rates will drop in 2004 - Policy Watch - Medicare payment rates to physicians will decline by an estimated 4.2% in 2004 - Brief Article

Healthcare Financial Management, May, 2003

Medicare payment rates to physicians will decline by an estimated 4.2 percent in 2004 CMS predicted in a March 20, 2003, letter to MedPAC. According to CMS, from 2004 to 2007, physician fee schedule rates will decrease as the current payment formula compensates going forward for increased spending in 2002 for physician services and lower gross domestic product per capita for both 2002 and 2003.

The Consolidated Appropriations Resolution (CAR) of 2003 allowed CMS to revise the FY98 and FY99 sustainable growth rates, which resulted in a 1.6 percent update to the physician fee schedule rates starting March 1, 2003. According to OMS, the revision will also result in higher updates for years beginning 2004 than would have occurred had the CAR not been enacted. CMS did caution, however, that the estimates are preliminary and will likely change by November 2003, when the update for 2004, is issued.

For more information on the physician payment formula and the change estimates go to www.cms.hhs.gov/physicians/mpfsapp/stepO.asp.