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How Medicare Will Change in 2004
Exam fees rise, minor surgical fees fall

The Medicare Prescription Drug, Improvement and Modernization Act of 2003, signed into law by President Bush in November, stops the originally scheduled 4.5% cut in the physician fee schedule update for 2004. The act also authorizes increases in the conversion factor of 1.5% in 2004 and 2005 � as of Jan. 1, it's $37.3374. Here are other provisions of particular interest to optometrists:

• The deadline to change participation status has been extended from December 31, 2003 to February 17, 2004. �Participating� doctors agree to always accept Medicare assignment, while �non-participating� doctors choose whether to accept assignment on a case-by-case basis. (See the Coding Q & A columns on Assignment and Participation in OM's April and May 2002 issues.) 
• The existing Medicare+Choice program that pays for Medicare HMOs is being replaced by the new Medicare Advantage. It will still encompass Medicare HMOs, and at press time, Suzanne Corcoran, vice president of Corcoran Consulting Group, says that "It is anybody�s guess how the new rules will be formulated"
• A study will be undertaken, probably by the OIG, regarding services provided by vision rehabilitation professionals 
• Rural health expansion will reduce geographic disparities
• Health Savings Accounts will provide tax-free savings to cover health costs
• Prescription drug coverage for seniors begins in 2006
• Means testing for seniors with income greater than $80,000.

As for fee schedule changes, on average, exams increased while tests and minor surgical procedures decreased. Following are some pertinent codes. These are national numbers; local wage indices will affect actual fees.

Local wage indices were set at not less than 1.000, so many rural areas increased significantly. For example:

Volume of services performed by O.D.s increased from 2001 to 2002, according to Corcoran. This will have the effect of raising Medicare revenues for O.D.s, even for procedures with lower MPFS values. The following numbers come from the Centers for Medicare and Medicaid Services' published BESS data for 2002, the most current year for which data is available.