Budget Issues Relating to Medicare Hearings Before the Subcommittee On Health

United States Congress House Committee On Ways

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Anderson. Right.
Chairman Stark. Is it a fair assessment to say that we are pret- ty much reimbursing on a cost basis or a historic basis?
Mr. GiNSBURG. I would say that we are paying on a historical charge basis.
Chairman STARK. OK And how do we adjust that currently, just according to inflation or Mr. Gensburg. Yes. As we update the conversion factor.
Chairman Stark. If we go up 4 percent, overhead goes up 4 per- cent?
Mr. GiNSBURG. That is right.
Chairman Stark. And that was depending on the... specialty, around half. Is that a fair assessment?
Mr. GiNSBURG. Yes.
Chairman Stark. Now what you are recommending is that be- cause there is a major difference in the overhead component as a percentage of the total fee, depending on what kind of a practice it is, we ought to scale those reimbursements for overhead on some relationship to the type of practice or its relationship to the overall fee. Is that what you are recommending?
Mr. Anderson. That is the administration proposal, and we are supporting that for 1994.

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