The Carter administration is considering a proposal that would take away from physicians much of the power they have to set the fees they are paid under Medicare.
The proposal, contained in a memorandum sent by the administrator of Medicare and Medicaid to Health, Education and Welfare Secretary Joseph A. Califano Jr., is part of the first attempt at a major overhaul of the dederal government's program of medical aid to the poor (Medicaid) and to the elderly (Medicare) since the programs were enacted in 1965.
The memo from Health Care Financing Administrator Robert Derson suggests that a uniform fixed fee schedule designed to eliminate inequities and disparities between the two programs be substituted for the present complicated and confusing system of paying physicians.
Under the present system of Medicare reimbursement, a complicated formula is used that allows physicians - within limits - to increase the fee paid them by Medicare by charging their patients more. A fixed fee schedule, negotiated in every state or in localities between HEW and physicians, would virtually eliminate the ability of physicians to raise fee levels by charging more.
Such a fee schedule would also work to eliminate many of the disparities that exist in what physicians receive from region to region. Under the present system, for example, the maximum paid ophthalmologist for cataract surgery in Santa Monica, Calif., is $1,100, but in Campbellsville, Ky., the maximum is $375. Physicians within the same area are also often paid widely different amounts for the same work.
Physicians and patients complain that they are uncertain as to how much Medicare will pay for a service. As a result, the number of physicians willing to accept payment in full from Medicare for their services to elderly patients has been declining steadily since the program's inception. Elderly patients have been forced to pay an increasing amount of physician fees out of their own pockets.
In addition, Medicaid - jointly funded by state and federal governments - often pays substantially less for work than Medicare does, creating a two-class system and making it more difficult for poor persons to obtain care.
According to the memo, which makes proposals for fiscal year 1980, Medicare payments would be set at fixed fees for each procedure and Medicare payments would gradually be raised to those levels.The memo estimates that the fee schedule plan would cost $250 million to $300 million more than present expenditures, but does not make clear who would pay the cost.
Derzon said yesterday that details of the proposal still remain to be worked out and that, in any case, it has been neither accepted nor rejected by HEW or Califano. Besides the fee schedule, the proposal suggests changes are needed to encourage physicians to participate directly with Medicare, rather than bill patients who later are reimbursed by the government.
The memo also recommends:
Establishing uniform eligibility standards for all states and minimum standards for each state Medicaid benefit program to ensure that qualifying persons get adequate treatment.
Making prescription drug items, now available under Medicaid in every state but Wyoming and Alaska, also availabe to to Medicare beneficiaries. The estimated annual cost of this provision would be between $2 billion and $4 billion, according to the memo.
Expanding Medicaid coverage to a variety of low-income persons now ineligible for Medicaid but financially unable to obtain adequate medical care. The total cost of these changes would be around $1.5 billion, the memo said.