Medicare premiums for Part B, which cover physician visits and outpatient services, are expected to soar to $89.20 per month in 2006an $11 jump from this year's premium. Medicare will lower the payment for each physician service by 4.3% in 2006 unless Congress steps in. Any attempts to stop those cuts would further increase spending and premiums, according to federal officials.
A preliminary assessment of Medicare attributed the rise in premiums to higher spending on physician office visits, greater use of services including physical therapy, higher costs for administration of chemotherapy drugs and other medications given in physician offices, and more frequent use of laboratory tests and imaging procedures.
In a letter to a federal advisory panel regarding the data, Mark McClellan, MD, PhD, administrator of the Centers for Medicare and Medicaid Services, expressed concern about the rapid rise in Medicare spending. Dr. McClellan said that his agency would evaluate whether increased use of Part B is necessary and helpful in improving patient care. He said that he favors connecting Medicare reimbursement to quality and efficiency, and he is working with physicians to create a system to accomplish that goal.