N.C. Dr. Thorwarth is also chair of the American College of Radiology's commission on economics. Seismic shift Not since the advent in the early 1980s of the inpatient payment system based on diagnosis-related groups of illnesses has Medicare taken such broad steps to assign specific dollar values to individual medical procedures. The Medicare PPS, mandated by Congress in the early 1990s, is expected to affect some 5,000 or more physicians who own outpatient centers. It will alter reimbursements for a range of services from knee arthroscopies and eye surgeries to computed tomography and laser techniques. Medicare officials repeatedly postponed its starting date, even pushing back the most recent launch by a month.
Several groups affected by the new system continue to lobby for a further delay.
Like DRGs, the PPS is a code-based system that categorizes individual procedures into 451 classifications and assigns them to more than 100 payment groups according to each procedure's relative complexity, resource intensity, cost and charge. The regulations leave alone physician fees and affect only the technical component of care, such as equipment, drugs and nursing costs. Hospitals and freestanding centers currently are paid using different, complex methods, which Medicare officials and some providers long have criticized as inconsistent. Providers also have complained that the fee structure has failed to capture actual costs, regardless of service site. Critics claim that the APC system may not be much better.