California Medical Assn. Supports Blue Shield's Move to Maintain Reimbursement Rates

Doctors Facing Cuts in Medicare Plan

Dec 12, 2001, 00:00 ET from California Medical Association

    SAN FRANCISCO, Dec. 12 /PRNewswire/ -- The Californian Medical Assn.
 voiced support Wednesday for Blue Shield's decision to maintain current
 reimbursement rates for physicians in the face of Medicare's plan to impose a
 5.4% fee cut for 2002.
     Calling Blue Shield "a good partner," CMA officials said the nonprofit
 health plan had taken an important step by not putting more fiscal pressure on
 physicians who already face rising costs and unrealistic reimbursements.
     "You can't provide health care without physicians, and the economics of
 health care in California is forcing medical groups to close their doors and
 physicians to leave practice," said Dr. Frank E. Staggers, Sr., president of
 the CMA.  "This step is a significant one by a major health plan.  It
 recognizes that physicians are already stretched," said Dr. Staggers, an
 Oakland urologist.
     No health plan other than Blue Shield has announced its rate structure for
 2002.  However, many typically link their rates to the Medicare rate structure
 or use it as a benchmark, and that could cause a ripple effect, said CMA
     At the same time, CMA officials said maintaining reimbursement at current
 levels is not a long-term solution.  Expenses continue to rise for medical
 practices.  The Medical Group Management Assn. reported expenses increased
 6.2% for the average multi-specialty physician group in 2000.
     Dr. Staggers said CMA is carefully watching the for-profit health plans to
 see if these insurance companies cut rates for physicians, and then send the
 money on to their shareholders and executives.
     The Centers for Medicare and Medicaid Services (formerly HCFA) last month
 announced a 5.4% cut in outpatient reimbursements for physicians, which will
 take effect Jan. 1.  Legislation has been introduced to limit the cut to 0.9%.
     The Medicare payment rates are driven by a statutory formula that uses
 non-medical based cost indicators, such as the Gross Domestic Product (GDP),
 to update payment rates.  These indicators are rising more slowly than the
 indices that track the cost of delivering medical care.  In addition, the
 Department of Health and Human Services has made errors in the formula used to
 compute the rates.  Because the formula is cumulative, errors made in the
 first two years that were never corrected are compounded with each year's
     The California Medical Association represents 35,000 physicians in all
 specialties and modes of practice.  It is one of the nation's largest state
 medical associations.
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SOURCE California Medical Association