American College of Physicians: Internal Medicine — Doctors for Adults ®

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ACP raises concerns about private contracting in Senate testimony

From the April 1998 ACP Observer, copyright 1998 by the American College of Physicians.

At a Feb. 26 hearing of the Senate Finance Committee in Washington, D.C., ACP presented alternatives to proposed legislation that would allow physicians to "privately contract" and bill Medicare beneficiaries.

The College supports increased choice for Medicare beneficiaries and fairer compensation for physicians but argued that legislation proposed by Sen. Jon L. Kyl (R-Ariz.) could decrease access to care for seniors, increase the administrative burden for physicians and the potential for billing error, and produce conflict in the doctor-patient relationship. Under Sen. Kyl's bill, physicians could privately contract with selected patients for specific covered services.

In testimony before the committee, William A. Reynolds, FACP, then ACP President, argued that Medicare beneficiaries already have more choice than most other patients, and that the 1997 Balanced Budget Act provides other methods to meet the goals of private contracting. He testified that options include medical savings accounts and private fee-for-service plans that permit premiums and reimbursement rates higher than those allowed under Medicare. ( Dr. Reynolds' testimony is available online.)

In his testimony, Dr. Reynolds noted that beneficiaries who do not want to participate in Medicare can opt out of Part B and re-enroll annually, with a premium surcharge. He also stated that in light of the legislation's potential effects on the Medicare program, the issue of private contracting needs to be further studied.

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