AMA House of Delegates

AMA reaffirms commitment to fight Medicare pay cuts

Delegates voted to stay the course and continue to press for Medicare reimbursement reform.

By David Glendinning — Posted Dec. 27, 2004

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The American Medical Association's Board of Trustees once again has established the prevention of further Medicare rate cuts and replacement of the current payment formula as its second-highest legislative priority for the coming year. Medical liability reform is ranked first.

Board members were backed in their effort by delegates at the AMA Interim Meeting, who approved a resolution renewing the policy that reimbursement reform is a top priority for the Association.

The moves come at the start of what likely will be a pivotal year for physicians treating elderly and disabled patients. Barring congressional action, doctors are projected to receive the first of several consecutive 5% reductions in Medicare reimbursement starting in 2006.

Testimony from delegates was virtually unanimous in calling for a change to the way Medicare does business with doctors.

"It's ineffective; it's inappropriate," said AMA Trustee Cecil B. Wilson, MD, of the reimbursement system. "It paradoxically says that if you have to provide more care for more patients, we'll pay you less."

AMA members overwhelmingly agree with the delegates. In a survey taken prior to the Interim Meeting, 95% of the respondents said fixing the physician payment formula should be a top priority of the Association.

Some attendees described how the problems came to a head when medical inflation continued to rise but the gross domestic product, on which the formula in part is based, started falling off. The combination of the two events triggered payment cuts for 2004 and 2005 that were narrowly averted by Congress.

"As long as the economy was doing well, this system seemed to work well," said internist William G. Gamel, MD, a delegate from Texas. Once a downturn occurred, however, doctors became painfully aware of the inequities built into the program.

Many paths to the goal

While physicians agree that their Medicare reimbursements should more accurately reflect medical practice costs, they don't always agree on how that should be accomplished. In accepting a general reaffirmation of AMA policy on Medicare payment, delegates rejected three competing resolutions that outlined more specific plans.

One proposal suggested pushing for a reformed payment structure modeled on the hospital system, while another recommended that the rate cuts projected through 2012 should be addressed before the formula is completely revised.

Yet another resolution stated that practice expense variations between physicians in different geographic areas should be first on the list of needed reforms.

The alternatives were portrayed by some delegates as tinkering around the edges that would distract from the overriding need to overhaul the payment formula.

"Don't fix the unfixable, and that's what I think this is," said ophthalmologist Robert A. Scher, MD, a delegate from New York, of the reimbursement formula. "Be a surgeon and cut it out."

Other attendees pointed to the possibility of inadvertently sabotaging a successful lobbying tactic by making too many demands. Including the concern about the geographic disparities, for instance, could sour the deal for some lawmakers, said Harold Miller, MD, an alternate delegate from Iowa.

"If you put the two together, it may not be very well liked by some members of Congress," he said.

In the end, the committee tasked with making a recommendation to the full House of Delegates stressed the necessity of giving AMA lobbyists the flexibility to bring about Medicare revisions using the tactics they see fit. Establishing a general goal of implementing payments that reflect the increasing costs to doctors of doing business will ensure that the Association can seek a shorter-term fix if one proves necessary, the panel members said.

"We asked the house to give us direction, reaffirm what they wanted and ... give us flexibility in looking at the fixes and looking at the permutations of formulas that will make that happen," Dr. Wilson said. "And that's what the house did."

More trouble ahead

Yet another aspect of Medicare reimbursement could soon start to become a headache for doctors, according to a new report from the Government Accountability Office.

The study, released several days after the AMA Interim Meeting, warns that Medicare officials need to come up with a plan for updating physician practice expenses by 2007, as required by law. The Centers for Medicare & Medicaid Services has said it is developing a strategy but has not provided any details.

CMS' track record in this area is spotty enough to give pause to both GAO and organizations representing medical specialists, who rely on reimbursement for this type of expense. The oversight agency reports that federal officials, who estimate practice expenses using AMA physician surveys and data volunteered by specialists, sometimes have relied on questionable information from specialty societies.

In at least one case, CMS utilized data submitted by a medical specialty that the agency knew to be inaccurate, according to GAO. The CMS' lack of a more structured system for picking the best information also enhances the risk that federal officials are accepting figures that are not representative of a specialty's actual practice expenses.

"Certain physician groups told GAO that this had diminished their confidence in the process for updating Medicare's fees, and physicians' confidence in the process is important to ensure their continued participation in Medicare," the report says.

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