This is an archive page. The links are no longer being updated.

Date: Friday, December 8, 1995   
FOR IMMEDIATE RELEASE
Contact: HCFA Press Office (202) 690-6145

Medicare Physician Fees Set for 1996

Under regulations published today in the Federal Register, the fees Medicare pays to physicians are to be increased in 1996 by 3.8 percent for surgical services and 0.4 percent for other services, the Department of Health and Human Services announced today. At the same time, the fees paid for primary care services are to be decreased by 2.3 percent.

Publication of the new fee schedule is required by law, but the new rates remain subject to possible change. Because 1996 updates were not enacted into law this year, HHS is mandated to establish the rates according to a default formula. However, if new Medicare legislation is enacted, the physician fee schedule for 1996 could be changed.

The annual updates of the Medicare physician fee schedule become effective Jan. 1.

Overall, the changes announced by HHS will result in a weighted average update of 0.8 percent for all physician services.

Although the inflation rate for the costs of medical practice is projected at 2 percent in 1996, the Medicare fees are being adjusted at different rates because of the statutory formula. The formula adjusts payments because Medicare spending for physician services in fiscal year 1994 increased at rates different than goals established for that year in the Medicare volume performance standards.

Medicare spending on physician services is projected to rise to $35.5 billion in FY 1996 from $32.2 billion in FY 1995.

The Federal Register notice also sets forth volume performance standards. These establish goals for the rate of growth in expenditures for physician services in FY 1996 which will affect the 1998 fee updates. The FY 1996 standards allow a 9.3 percent growth rate of Medicare spending for primary care services and 0.6 percent for nonsurgical services, and a decrease of 0.5 percent for surgical services.

###