Extra Services May Mean Costlier Medicare

Medicare (search) officials said Thursday that they would study the necessity of extra tests and services being ordered by doctors, a trend leading to a rapid growth in premiums for patients.

Mark McClellan, the administrator for the Centers for Medicare and Medicaid Services (search), said patients are visiting doctors more often and undergoing more, sometimes-costly tests such as MRIs, which provide detailed pictures of the brain.

It's unclear whether all the extra services are necessary, he said.

"We need to do more to understand which services are contributions to good outcomes," McClellan said.

The extra care is affecting monthly premiums for beneficiaries who participate in Medicare's supplemental insurance program, which covers visits to the doctor's office. McClellan said monthly premiums were likely to go up 14 percent, or $11. That would bring monthly premiums to $89.20 — $1.50 more than the Medicare trustees estimated a week ago.

At the same time, the agency told the Medicare Payment Advisory Commission that physicians could expect a 4.3 percent cut in reimbursements next year. Those reductions had been expected.

Explaining the cuts, McClellan said there was a large increase in billings for laboratory tests, minor procedures such as physical therapy and complex procedures such as echocardiograms and MRIs.

Dr. James Rowhack, chairman of the board for the American Medical Association, and a cardiologist, said the additional services result from improvements in medicine.

"They seem to be saying, 'gee volume has gone up, doctors must be doing something to make more money,'" Rowhack said. "The reality is no, that doctors, based on science, are providing appropriate medical care, plus they're providing those screening tests that Congress has mandated to be covered by Medicare (such as mammographs.)"

Rowhack said doctors would work with McClellan to help determine what services are necessary.

Senate Finance Committee Chairman Charles Grassley, R-Iowa, said Congress should review the extra services being ordered by doctors.

"It'll be important to understand which services contribute to health improvements and which are more questionable," Grassley said. "To that end, physicians and other interested parties should be included in these discussions."