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1994.12.08 :  Oversight Services Payment

Contact:  Anne Verano    (202) 690-6145
December 8, 1994

              DOCTORS TO BE PAID FOR OVERSIGHT SERVICES

     The Medicare program, for the first time, will make separate
payments to physicians for supervising the care of patients
receiving Medicare-covered home health and hospice services, HHS
Secretary Donna E. Shalala announced today.

     Payment for this oversight is currently considered to be
bundled into Medicare payments for physicians' visits and other
services.

     A regulation published in today's Federal Register provides
that beginning Jan. 1, a physician can be paid for supervising
the home health or hospice care of a Medicare patient when the
oversight requires more than 30 minutes a month.

     "Doctors must be fairly compensated for supervising the care
of patients whose medical condition requires continuing oversight
and revisions of plans for their care," said Secretary Shalala.

     Nearly 5.3 million claims, averaging about $60 each and
amounting to an estimated $310 million, are expected to be
submitted by physicians in 1995 for the supervisory services.

     The costs will not increase the Medicare budget, but will be
paid for with offsetting across-the-board adjustments throughout
the Medicare physician fee schedule. 

      Approximately 3.5 million Medicare beneficiaries
will receive home health care services in 1995, while about 
200,000 will be hospice patients.

     The regulation also revises data that are used to adjust
Medicare physician payments for differences in practice costs
prevailing in 210 geographic areas.

     It is the first revision of the geographic practice cost 
indices (GPCIs) since the beginning of the Medicare physician fee
schedule in 1992.

     Bruce C. Vladeck, administrator of the Health Care Financing
Administration, explained that the revised GPCIs "are based on
more recent and comprehensive data and better reflect area cost
differences."  The changes are effective Jan. 1.

     In 75 percent of the areas, the revisions will change GPCIs
less than 3 percent.  The maximum change in any area is 8
percent.

Changes will be phased in over two years.

     The fee schedule establishes relative values for thousands
of medical services.  Relative value units for each service
represent the work, practice expenses and malpractice insurance
costs associated with delivering the service.  The values are
adjusted by the GPCI in the process used for determining the
payment rate for each physician service.

     The regulation also announces a process for a comprehensive
review of all relative values for the work performed by
physicians in providing each service.

     Proposed revisions of work relative values will be developed
by 1996, when they will be published for public comment.  The new
values will be effective in 1997.

     As part of the process, HCFA is asking for comments on the
current relative values for work.  Medical associations are
expected to submit comments.
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