Insight Matters
Fall, 2001

APA Issues Medicare Update

On November 1, the Centers for Medicare and Medicaid Services (CMS) formally released the calendar year 2002 Medicare payment update for physicians' services. Because of complex structural flaws in the way in which payment updates are calculated, the announced update was close to a negative (minus) 5 percent. This is a real reduction in the amounts Medicare will pay physicians and other health care professionals for their services. The Medicare Payment Advisory Commission (MedPAC) has called for the elimination of the current update formula and warned that the cuts under the flawed formula raise serious concerns about access to care.

APA is deeply concerned about the impact of the negative update on our members and their ability to deliver high quality psychiatric services to Medicare patients. A negative update, coupled with Medicare's underlying discriminatory 50 percent copayment requirement for outpatient psychiatric services, only exacerbates access to medically necessary psychiatric treatment for elderly and disabled Medicare beneficiaries.

APA has joined AMA, other physician specialty organizations, and numerous non-physician health professionals -- representing more than one million health care professionals in all -- to urge President Bush, CMS Administrator Tom Scully, and the leaders of the key health committees in the House and Senate to act promptly this year to address the flaws in the payment formula to address the negative update. We will do our utmost to persuade all parties to act before the end of the year, and will keep you posted on developments as they occur.

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