AMA meeting: AMA to renew fight for Medicare balance billing

Honolulu -- Frustrated by Medicare pay cuts, representatives to the AMA House of Delegates directed the American Medical Association to call for national legislation to allow physicians to bill patients for costs Medicare doesn't cover.

At its Interim Meeting last month, the house adopted policy directing the AMA to devote its political and financial resources to initiate a measure at the appropriate time that would allow Medicare balance billing. The policy calls for introducing legislation that would end budget-neutral restrictions inherent in a Medicare physician payment structure that interferes with patient access.

In addition, delegates want the proposal to preempt state laws prohibiting balance billing and forbid inappropriate inclusion of bans on such billing in private physician-insurer contracts. The AMA would develop model language for doctors to use in insurance contracts that try to restrict balance billing of any insured patient.

With no permanent fix for Medicare cuts in sight, doctors said it makes sense to pursue a law that lets them bill Medicare patients the difference between reimbursement rates and what it costs to treat patients.

"What you see is a symptom of how difficult it is to maintain practices. It's physicians frustrated with reduced income," said AMA Trustee Rebecca J. Patchin, MD.

The action comes as doctors continue to fight an average 10.1% Medicare physician payment cut set to take effect Jan. 1, 2008. Doctors vowed to keep pressing for a solution to the Medicare pay formula, but they said balance billing is needed to offset pay cuts.

"It allows physicians to provide a fix to the Medicare crisis. Balance billing allows physicians to salvage the system," said alternate delegate Aaron Spitz, MD, a urologist from Laguna Hills, Calif.

In recent years, AMA policy has supported balance billing where allowed by law or contract. And the House of Delegates has asked for legislation to permit physicians to balance-bill regardless of the payer.

Dr. Patchin said the new move for balance billing would not divert the AMA from seeking a fix for the Medicare formula.

"It has reached a critical time. We need Congress to act on the [sustainable growth rate]," she said. "If Congress sets aside resources for adequate payment, there would not be a need for balance billing."

Some question changing the system

Medicare and most private insurers forbid or limit participating physicians from balance billing. Doctors who accept all Medicare patients cannot charge extra over Medicare's defined fee for covered services. Nonparticipating doctors who take Medicare case by case may balance-bill patients, but the extra charge is limited to a set percentage of the initial payment.

But some delegates at the Interim Meeting said the new policy may draw critics who say physicians are too concerned about money. They said a major push for balance billing would alienate seniors and distract Congress from working on the sustainable growth rate.

Others say elderly patients would suffer.

"A large number of them won't be able to pay. Please be careful what you wish for," said delegate Melissa J. Garretson, MD, a pediatrician from Stephenville, Texas.

Seniors group AARP opposes the practice and has fought against bills brought before Congress.

"AARP strongly opposes lifting or extending the current Medicare balance-billing limits. Prior to enactment of the 1989 Medicare physician payment reform, Medicare beneficiaries were spending billions of dollars out of pocket on excess physician charges. The balance-billing limits were put into place to protect beneficiaries from extraordinary costs," Kirsten Sloan, AARP's national coordinator of health and long-term-care issues, said in a statement.

"Lifting the limits is nothing more than a cost shift to patients. And it would only exacerbate out-of-control health care spending," she said.

But delegates said patients understand that physicians are struggling with low reimbursements and they believe seniors would be willing to pay more to keep their doctors. Some physicians have said they would be compelled to stop taking new Medicare patients if the reimbursement rate cut takes effect in January. An AMA survey this year found that 60% of doctors said they will limit the number of new Medicare patients if the cuts go through.

Responding to pleas from physicians, three delegations -- California, Florida and the District of Columbia -- introduced balance-billing resolutions to the AMA House of Delegates. When it was time to vote, delegates overwhelmingly supported a plan for national legislation.

"We're happy with the result. It's a solution in some ways," said delegate James T. Hay, MD, a family physician in Del Mar, Calif. "This has to be a long-range strategy for the AMA."

Dr. Patchin said the next step is to work with state and specialty societies to find a congressional sponsor for a bill. The policy the house adopted calls for the Board of Trustees to report progress by March 15, 2008, and at each semi-annual house meeting.

Rep. Michael Burgess, MD (R, Texas), said he is willing to author the legislation. Balance billing was part of a Medicare physician payment reform bill he proposed last year that failed to become law.

"It's something I believe in very strongly," Dr. Burgess said. "If the House of Delegates is interested, I'm interested, too."

With Medicare pay cuts less than a month away, balance-billing legislation is a must, doctors said.

"If not now, when is the appropriate time?" asked alternate delegate Corey L. Howard, MD, an internist in Naples, Fla.