Time running out to fix Medicare pay

Without legislative action, physician Medicare reimbursement would be cut 5.1% next year and about 40% over the next nine years.

Posted Sept. 11, 2006.

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If ever time was of the essence to fix the broken Medicare physician payment formula, it is now -- before lawmakers go back to their states and districts in October to campaign for re-election.

The latest news is grim. Physician reimbursement would fall on average 5.1% next year unless lawmakers act. And that's just the beginning. Without congressional intervention, doctors' Medicare pay will be slashed about 40% over the next nine years, while practice costs increase about 20%.

The problem is, and has been for years, the hopelessly flawed Medicare physician payment formula. The calculation punishes physicians with lower payments when increases in spending for their services exceeds growth in the gross domestic product. But growth in medical care is influenced by factors other than GDP -- growing patient health needs, new technology to more accurately diagnose patient illness, and expanded Medicare coverage that encourages patients to seek more care.

That's why the American Medical Association is calling for an overhaul of the formula. The Association's proposal is nothing more than common sense: Keep physician payment increases in line with growth in the cost of caring for Medicare beneficiaries.

Physicians aren't the only ones calling for change. The Medicare Payment Advisory Commission, which advises Congress on physician reimbursement, has said the payment system should be scrapped. The panel recommends that instead of using a formula, the government should base yearly physician payment updates on an analysis of payment adequacy.

As it stands now, the payment reductions would be compounded by four other major policy changes that would hurt many doctors' reimbursement rates. These include AMA-opposed Medicare imaging pay cuts slated to begin next year.

If Congress fails to reform payment, doctor access for seniors and people with disabilities will suffer.

Forty-five percent of physicians tell the AMA that cuts would force them either to decrease or to stop taking new Medicare patients. This is a financial decision no doctor wants to be forced to make. But as AMA Board of Trustees Chair Cecil B. Wilson, MD, said, "To keep providing high-quality care to patients, Medicare must provide appropriate payments to the doctors who provide that care."

Physicians are fighting to prevent the cuts from happening. This week, physicians from across the country, representing many medical specialties, will hit Capitol Hill, with help from the AMA, pressing for payment reform. This is one more feature of the Association's effort, which has included about a half million grassroots contacts to Congress, participation in several congressional hearings, outreach through the various forms of media and "House Call" visits to key congressional districts.

The AMA is urging doctors and patients to contact their representatives and senators to ask them to prevent the cuts and tie payment to the cost of practicing medicine. Physicians may call the AMA Grassroots Action Center's hotline at 800-833-6354, and patients may call the Patients' Action Network at 888-434-6200.

The string of reimbursement reductions couldn't come at a worse time. The first wave of baby boomers will begin to enter Medicare in five years, in the midst of the payment cuts. At one of the most crucial times in the program's history, the government will be letting beneficiaries down.

These patients and the physicians who care for them are the constituents that lawmakers will face next month during the campaigns for the November elections. Congress must not disappoint them.

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External links

AMA on Medicare physician payment reform (link)

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