U.S. moving to control doctors' fees Changes coming for Medicare

December 27, 1990|By Knight-Ridder

WASHINGTON -- The federal government is imposing price controls on doctors treating Medicare patients beginning Jan. 1, a policy intended to drive down the health care costs for older Americans that may ultimately reduce the number of doctors willing to take Medicare patients.

At the same time, the nation's Medicare beneficiaries can expect to spend about $75 more on premiums and deductibles in 1991 to help pay for the nation's largest medical plan.

For doctors, the new rules mean patients may not be billed more than 125 percent of Medicare's maximum fee for a procedure. The rate drops to 120 percent in 1992 and 115 percent in 1993.

The only exception is for general practitioners and internists, who may charge patients up to 140 percent of the Medicare fee in 1991.

Doctors who overcharge could be fined $2,000 per incident and excluded from the Medicare program.

Some say they may leave the program. "I bill for my legitimate office work and, as a result, for the past year I have stopped taking new Medicare patients. If . . . reimbursement schedules get worse, I intend to drop my Medicare practice altogether," said Dr. Alan Drake, a family practitioner in Sparta, Tenn.

The price controls are one of the most far-reaching attempts to put the brakes on medical care costs, which rose 11.1 percent to $604 billion nationally in 1989.

The nation's 600,000 physicians had an average income of $155,800 in 1989, according to the American Medical Association.

Here's how the cost increases break down for the average Medicare beneficiary:

The premium for Medicare Part B supplementary medical insurance, which pays for doctor visits and outpatient care, inches up $1.30 a month to $29.90. Nearly 30 million Americans age 65 and over elect to buy the coverage.

The annual deductible that Medicare beneficiaries must pay increases from $75 to $100 on New Year's Day. And the first-day deductible for a hospital stay goes up $36, from $592 to $628 in 1991.

A Medicare beneficiary would spend a minimum of $1,088 out of pocket in a year that included a one-day hospital stay. But Medicare will pay more than $2,500 in medical bills for the average recipient, according to the Health Care Financing Administration.

"The Medicare program looks so good when you contrast it to what [health insurance] many people under 65 have," said Gail Shearer, a public health finance expert with Consumers Union, publisher of Consumer Reports magazine.

And it's getting better. Congress heeded seniors' requests for more benefits and wider access to medical care, adding a mammography benefit expected to cost $1.25 billion over five years. Beginning in 1991, Medicare will pay for a mammogram every other year for Medicare beneficiaries who are 65 and older, and yearly for disabled women, aged 50 to 64.

Also, starting Jan. 1, the 3.5 million older Americans living in poverty will be eligible to have Medicaid pay for their Medicare premiums, co-payments and deductibles.

Medicaid is a jointly funded state-federal program that provides medical care to the poor.

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