AAFP Urges Congress to Reevaluate Medicare Payment Rates

The American Academy of Family Physicians (AAFP) is continuing to take a lead role in a broad coalition seeking a remedy to the 5.4 percent cut in Medicare conversion factor (a multiplier used to convert relative values to payments for services rates) that took effect January 1, 2002. Despite overwhelming support in Congress (287 co-sponsors in the House and 65 co-sponsors in the Senate) for legislation that would limit the decrease to only 0.9 percent, Congress failed to vote on the measure. The AAFP's efforts include urging Congress to move quickly to correct this problem; meeting with senior citizen consumer groups and other organizations to enlist support in the battle to obtain a solution; and participating in a coalition working group to develop revisions to the formula used to annually update the payment rates and providing input to the Medicare Payment Advisory Commission (MedPAC) as it develops recommendations for revising the update formula. MedPAC recently adopted three recommendations that, if accepted by Congress, would eliminate the current formula used to update the conversion factor. These recommendations were as follows: (1) Congress should repeal the sustainable growth rate (SGR) system and instead require the Secretary of the Department of Health and Human Services (HHS) to update payments for physician services based on the estimated change in input prices for the coming year, less an adjustment for growth in multifactor productivity; (2) the HHS Secretary should revise the productivity adjustment for physician services and make it a multifactor adjustment; and (3) Congress should update payments for physician services by 2.5 percent for 2003. These recommendations would eliminate the cost containment provisions inherent to the process which include the SGR and the physician labor productivity adjustment. The new formula would be used to set the payment rate for Medicare reimbursement beginning in 2003. The AAFP will be working with other physician organizations to urge congressional enactment of legislation to address the payment concerns.

HRSA Names 500th Critical Access Hospital

The Health Resources and Services Administration (HRSA) announced in February that Audobon County Memorial Hospital in Audobon, Iowa, is the 500th facility to be named a critical care access hospital under the Critical Access Hospital (CAH) program that provides grants to states to help stabilize America's smallest and most vulnerable rural hospitals and help strengthen the rural health care system. The CAH program fosters the development of rural health networks, strengthens providers of rural emergency medical services, and helps improve the quality of care for rural residents. Through this program, Medicare reimburses hospitals with CAH certification all costs for inpatient and outpatient services. “This program helps bring the world's best medical care to small hospitals in rural communities,” HHS Secretary Tommy G. Thompson said. “It is one piece of our broader strategy for strengthening the quality of care in rural America.” Since the creation of the program, 47 states have implemented programs that make it possible for small rural hospitals to become critical access hospitals.

Survey Shows Improved Health Insurance Coverage for American Children

The number of children under 18 years of age in the United States who lacked health insurance dropped in the first half of 2001 to 11.2 percent from 13.9 percent in 1997, according to the latest survey of insurance coverage from the Centers for Disease Control and Prevention. Data for the survey were collected from January to June 2001. The survey also found that the percent of children with public coverage rose from 20 percent in 1998 to 23.1 percent in 2001. Overall, 14.1 percent (38.9 million) of Americans of all ages were without health insurance coverage during this period, down from 15.4 percent in 1997. In August 2001, HHS Secretary Thompson launched an initiative to encourage states to expand access to health care coverage for low-income individuals through the Medicaid program and the State Children's Health Insurance Program (SCHIP), which are administered by HHS Centers for Medicare and Medicaid Services. The percentage of adults who have a usual source of medical care remained relatively constant at 85 percent from 1997 to 2001. A slight increase to 4.8 percent of the population in 2001 was seen in persons unable to obtain necessary medical care because of financial barriers. Other findings from the study included an increase in the prevalence of obesity based on self-reported weight and height among American adults from 19.4 percent in 1997 to 22.5 percent in 2001; a continued decline in smoking, with only 22.3 percent of adults being current smokers; and one in 10 American adults reported consuming alcohol excessively.

AAFP Responds to State of the Union, Addresses Key Health Care Issues

In a response to the State of the Union address, AAFP President Warren Jones, M.D., Ridgeland, Miss., said “We commend President Bush for placing high priority on a patients' bill of rights, the plight of the uninsured, and providing a prescription-drug benefit for seniors.” Jones stressed that a strong health care system and a strong public are essential to a secure country, as the recent threat of bioterrorism proved. “This is a new era for America, when security and economic concerns are paramount and the health of the citizens underpins our country's security and economy,” Jones said. “We must act to ensure that every American has access to appropriate medical care as determined by their physician, not by their managed care provider,” he added. Jones also called for a national discussion of, and solution to, the problem of uninsured and underinsured Americans, especially given the potential for those numbers to rise dramatically during the current economic downturn.