Oppose Resolution 06-5 And Preserve Medicare Reimbursement

Dear Friends and Colleagues:



At the upcoming FMA Board of Governors & Council Days Joint meeting(October 19-22,2006) in Miami Resolution 06-5 (Medicare Reimbursement) will be discussed. This resolution calls upon the FMA to ask the Center for Medicare & Medicaid Services to make Florida a single geographic locality for physician reimbursement.

The supporters of the resolution claim that the resolution has three intentions:

1. UNITY:

“when people have the same interest they work together for the common good.Currently our (FMA) members have been divided by CMS into three camps. We want to become one camp…to assure that our FMA represents the interests of all physicians of Florida, not just a minority. Only then can we be assured that our congressional delegation has the same interest to fight for Medicare patients.”

2. ACCESS:

“ we have to make sure that Medicare patients have access to doctors all over the state. There are areas in the state where Medicare patients cannot find doctors.”

3. PARITY:

“ all physicians in Florida should be paid the same for the same work and the same standard of care. It is increasingly more expensive to live and work all over the state , not just in some small areas. Parity is the reason so many states long ago changes to one locality.”



Attached you find a recent letter from the CMS Presidents of Dade,Broward and Palm Beach addressed to the Florida Board of Governors and the Council on Medical Economics OPPOSING the proposed resolution.



The South Florida Caucus including the Dade, Broward, and Palm Beach Medical Society stand opposed to Resolution 06-5.

We agree that the current reimbursement formula does not fairly or accurately address the costs of operating a medical practice.

We agree with and support current FMA and AMA policy and efforts to FUNDAMENTALLY reform the formula on which physicians’ reimbursement is based by either abandoning, replacing or reforming the flawed Sustainable Growth Rate (SGR).

We believe strongly, however, that the Medicare physician reimbursement formula must take into account geographic disparities in reimbursement and expenses (i.e. housing, practice lease, salaries, and insurance).

These disparities are real. Professional liability rates are not only significantly higher in South Florida, but notoriously among the HIGHEST in the nation. Other professional practice expenses such as salaries, leases and rents, non – PLI insurance (Property, Windstorm etc.), as well as general living expenses are SUBSTANTIALLY higher for physicians and their staffs in South Florida than in other areas of Florida.

Ignoring these realities and suggesting non-differential reimbursement is neither fair nor reasonable and it is thus unacceptable.

Other large and small businesses have differential financial structures based on location as evident with professional liability insurers. No doubt, South Florida physicians would embrace the lower PLI rates available in other parts of Florida and the nation, but that is not reality.

To raise North Florida Medicare rates, as presumably aspired to by this resolution, CMS would have to lower South Florida rates to maintain budget neutrality.

If this were to pass, South Florida physicians would not accept such a rate reduction on top of the accepted Medicare physicians’ reimbursement cuts and lobby openly against it to CMS.

Clearly, this would become a highly divisive issue for physicians and for the FMA and could impact its political credibility, agenda and membership.

Asking CMS to make Florida a single geographic locality for physician reimbursement does NOT guarantee as hoped for, an increase for North Florida physicians. Asking CMS to pay Florida doctors at one rate regardless of geographic and economic disparities,would likely result in CMS choosing the LOWEST current rate for EVERYONE. In fact, we would be sending the message to payers that physicians again would be willing to accept a lower fee schedule at a time when rates are already subject to annual REDUCTIONS.

Any lowering of Medicare rates would have a ripple effect on managed care rates and cause them to drop as they reimburse at a percentage of Medicare. This would impact ALL Florida physicians even the ones NOT caring for Medicare patients, such as pediatricians.

Further any lowering of Medicare rates in South Florida would create an economic incentive to leave South Florida and relocate to other parts of Florida or the US where cost of living expenses are less.

In the unlikely scenario that CMS would increase North Florida rates without lowering those in South Florida, it would invite the unintended and undesirable consequences of increasing managed care penetration in North Florida as HMO income also is tied to Medicare rates.

Again, with regard to fairness, if Medicare were to pay all physicians at the same rate, then the same should apply for managed care which, again is not consistent with reality. Similarly, professional liability rates should be the same all across the state, which they are not.

Finally, any decreases in Medicare rates equals reduced access to care for patients, because physicians in South Florida will reach an economic tipping point and have to drop or limit Medicare patient services

Thus, instead among ourselves over the geographic factor, which, at least, is based on economic disparities across the state, we must continue UNITED and TOGETHER in our annual struggle to correct the terminally FLAWED SGR formula and increase reimbursement fairly FOR ALL physicians.

We hope and respectfully request that the Council on Medical Economics and the FMA Board of Governors will vote down Resolution 06-5 to preserve access, parity and unity.