WASHINGTON, DC – President Obama signed Rep. Sam Farr’s, D-Carmel, bill to permanently fix the underpayment by Medicare to California doctors who practice in certain counties that included Monterey, San Benito and Santa Cruz Counties. The problem has led to a shortage of doctors in affected counties, with even fewer of those doctors able to treat seniors.
Farr’s Geographic Practice Cost Index (GPCI) Fix solves a four-decade-old problem that mislabeled 14 California counties as “rural,” causing doctors to be under compensated for Medicare procedures.
“Perseverance has paid off! For nearly 15 years, we have been diligently working to fix this problem,” said Farr. “Now doctors all over California will be fully reimbursed for seeing Medicare patients.”
In 1966, when the formula was initiated, counties were designated as either “rural” or “urban,” with the expectation that those designations would be updated every few years. That never happened, and as a result, doctors in counties that have seen economic growth are being compensated at levels significantly lower than those in nearby counties. For instance, counties such as San Diego and Sacramento are improperly designated as “rural’ despite large populations. Doctors in the 14 California counties (San Benito, Santa Cruz, Marin, Santa Barbara, San Diego, Monterey, Sonoma, Placer, El Dorado, Yolo, Sacramento, San Luis Obispo, Riverside and San Bernardino) are underpaid by as much as 10% each year, which is $54 million in unrealized Medicare reimbursements.
Farr’s GPCI Fix requires the reimbursement formula to be calculated based on Metropolitan Statistical Areas (MSAs). The higher payments would be phased in over a six-year period starting in 2017.
“Seniors now have the assurance that more doctors will treat them,” said Farr, “And doctors know they will be properly reimbursed for providing that care, allowing them to practice in all counties. This is a huge win for California!”
The GPCI Fix was included as part of H.R. 4302, a bill to extended Medicare payments through the end of the 2014. The House of Representatives passed the legislation by voice vote on March 27, 2014 and the Senate voted 64-35 for the bill on March 31