As you ponder your future, imagine what it would be like if the federal government cut away even larger chunks of your potential revenue from the Medicare fee schedule than it has already sliced away. Picture it getting so bad – with managed care mirroring these cuts – that you have to carry a union card to secure a decent income.

These are just two of many scenarios that are possible, depending on what happens in our nation’s capital as we enter the new Millennium.

During the past 30 years, legislators and regulators have been an engine for change in American medicine – an engine that shows no signs of slowing down. Here, I’ll review good and bad regulatory developments that you’ll need to consider as you plan your career.

Rep. Tom Campbell (R-Calif.) recently introduced legislation – H.R. 1304 – that would allow health care professionals to be treated as bargaining units under the National Labor Relations Act. The bill would let physicians in separate practices establish fees collectively to negotiate with managed care organizations in their area – an activity that previously would have been seen as price-fixing. Under the bill, physicians would be considered employees of managed care organizations and thus entitled to collective bargaining.

Realistically, neither the Campbell bill nor anything like it may make it through the legislative process this year. But next year or the year after, who knows? The important thing is that organized medicine appears better able than ever to make itself heard on this issue in Congress.

Both Medicare and Social Security were on the top of the congressional agenda this year, and both are now dead issues. A strong economy and the year 2000 election campaign drained away whatever political resolve existed to reshape these institutions. But next year, the Democrats undoubtedly will trot out the Medicare "crisis," as they did in 1995 and 1996, in a time-tested campaign ploy to scare elderly voters.

As in the past, the inability of Congress to move on Medicare may work to the advantage of physicians, who seem only to be hurt by reform efforts. In the years ahead, though, additional physician fee cuts surely will be considered, along with changes that would subject Medicare to competition among public and private health plans. Raising the eligibility age for Medicare is also a possibility.

A fierce battle has raged between the Health Care Financing Administration (HCFA) and the physician community – and between specialists and primary care physicians – over resource-based practice expense relative value units (PERVUs).

In 1994, Congress enacted legislation requiring HCFA to develop and implement resource-based PERVUs for each physician service covered by the Medicare Physician Fee Schedule. In 1997, HCFA revealed preliminary results of the project and – no surprise – proposed to cut practice expenses for many high-volume surgical procedures, including many ophthalmic procedures, by as much as 30% or more.

In an unprecedented show of solidarity, several dozen medical specialty societies, including all of the major ophthalmology organizations, banded together in the Practice Expense Coalition to prevent HCFA from implementing the changes. After a protracted and expensive lobbying campaign, Congress required HCFA to moderate many of the proposed Draconian cuts.

But the legislation also targeted 1998 PERVUs that exceeded corresponding work RVUs by 110% or more. These PERVUs were reduced to 110%. Resultant savings were used to increase PERVUs for office visit procedure codes.

Essentially, the provision represented a "downpayment" by surgeons and other specialists to primary care physicians in exchange for delaying implementation of the rebased rates by 1 year. Ophthalmology alone absorbed about 40% of the cuts.

To compound the damage, HCFA adjusted the PERVUs directly on the fee schedule. This has let HCFA carry over the downwardly adjusted PERVUs into the phase-in period, which began Jan. 1. In other words, the procedure codes that have been implicated by the "downpayment" adjustment in 1998 will be downwardly adjusted for 4 more years.

More than a dozen specialty societies, including the major ophthalmic groups, have joined together in a lawsuit, contending that HCFA abused its rulemaking discretion in applying the downwardly adjusted rates throughout the transition period.

The groups also seek to stop the agency from implementing a regulation and fee schedule based on this interpretation. We’re hopeful that the federal court will ameliorate this HCFA decision, which could cost ophthalmology, orthopedics and gastroenterology more than $825 million during the next 4 years.

Hospitals continue to suffer reimbursement reductions. Of greatest concern to ophthalmic surgeons is the development of a fully prospective payment system, like diagnostic related groups (DRGs), for hospital outpatient department (HOPD) services.

The hospital industry charges that the government’s latest proposed payments prevent hospitals from continuing to provide quality outpatient surgical services. Some hospitals have threatened to refuse to accept admissions for complex and resource-intensive procedures, like cataract surgery.

What is clear is that the entire hospital environment will have less to spend and have less ability to accommodate surgeons’ desires for specialized equipment, supplies and personnel.

Last spring, HCFA issued its proposal to rebase the payment rates for ambulatory surgical centers (ASCs). The agency proposed reducing the facility fee for cataract surgery from $928 to $863 and to cut post-cataract laser surgery payment from $422 to $274.

At this point, with respect to both the HOPD and ASC rulemakings, HCFA has agreed to forestall promulgation of a final rule until sometime after Jan. 1, 2000.

I’m bullish on the prospects for ASCs for several reasons:

• Through aggressive lobbying efforts, I feel we can all be guardedly optimistic that cuts in ophthalmic facility fees, if they occur at all, will be modest.
• The ASC procedures list – procedures for which facility reimbursement is provided – now includes virtually all ophthalmic procedures.
• Regulatory barriers to the establishment of ASCs, like certificate-of-need and licensure, are going by the wayside in many states.
• Managed care organizations are more frequently contracting with ASCs in negotiating "global" professional and facility payments with ASCs and their medical staffs.
• It’s now clear that the federal anti-kickback and physician self-referral laws don’t prohibit an ophthalmologist from owning and referring Medicare patients to an ASC.
• You can increase revenues by using the ASC for refractive surgery.
• Where will the progressive ophthalmologist perform cataract surgery? Today, it’s important for you to feel empowered: You do indeed control the flow of revenues to a facility, be it the ASC or the hospital.
• Options abound: building one’s own ophthalmic ASC; joint venturing a facility with other physicians; co-owning the ASC with a local hospital or corporate ASC chain; becoming a minority investor in a multispecialty facility; or simply deciding to join the medical staff of an ASC.

Patients’ rights bills generally include provisions that would:

• guarantee a person’s right to see a specialist

• permit patients to keep a doctor of choice throughout a course of treatment

• ensure that medical decisions are made by physicians (not insurance companies)

• keep patient medical records private

• dictate minimum hospital stays for certain procedures

• permit managed care enrollees to sue health plans under state laws if plans deny or delay coverage.

The survival of ophthalmologists and other specialists in a managed care world may well depend upon passage of so-called "patient rights" legislation, which died in the last Congress.

Passage of managed care reform legislation was on the campaign platform of virtually all Democrats and Republicans during last November’s elections. Many are hopeful that some type of legislation will pass by year’s end. However, finding that delicate compromise – balancing the interests of patients, you and the managed care industry – will be a challenge.