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Congress delays 10.1% cut to Medicare physician payments
Physicians to receive 0.5% increase until June 30, 2008.
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Congress recently approved the Medicare, Medicaid and SCHIP Extension Act of 2007 that granted a 0.5% increase in Medicare physician payments, suspending for six months an anticipated 10.1% negative update.
“It is extremely disappointing that after all the hard work in the House earlier this year to replace two years of Medicare physician payment cuts with increases that would help physicians keep up with medical practice costs, the final action passed by the House and Senate stops the cut for just six months, which creates uncertainty for both Medicare patients and physicians,” said Edward Langston, MD, American Medical Association board chair.
“We strongly urge Congress to break the tradition of short-term interventions that are not funded and fail to chart a course for replacing a flawed payment formula that is a barrier to improving quality and access to care for seniors,” Langston said in a released statement.
No long-term solution
The bill extends expiring rural physician payment provisions and the Medicare physician quality reporting initiative, Ronald M. Davis, MD, president of the AMA, said in a public statement. The State Children’s Health Insurance Program was also extended until March 31, 2009. The AMA had led a $3 million grassroots campaign to prevent the pay cut.
“The failure to achieve a long-term solution to the problem is not because of a lack of effort by the AMA and its colleagues in state, county and national medical specialty societies,” Davis said. “All of us in organized medicine are disappointed and frustrated that Congress has yet to develop a sustained solution to this debacle, one the AMA has spent substantial resources to bring to the forefront.
“We need a solution that fully funds Medicare payments in a way that covers practice costs and ensures access to care for the nation’s seniors,” Davis said.
“What is needed is relentless advocacy by grassroots physicians and our patients, strong support from organizations that represent seniors and absolute unity among physician organizations in petitioning Congress for a fair and enduring solution to this problem,” Davis said. – by Christen Haigh
For additional information regarding this issue, visit the American Medical Association website at www.ama-assn.org.
When is an increase actually a decrease? The answer is when the government gives it, as in the latest increase in Medicare reimbursement. The government’s response to this critical issue of physician reimbursement strikes me as very Orwellian: It is “government speak” at its best. I say this because the 0.5% increase is actually a decrease in reimbursement. Medical inflation has been running at an average of 2% to 2.5% per year. Dollars this year will buy that much less than dollars last year. Therefore, physicians will experience a decrease of 1.5% to 2.0% in true reimbursement with this legislation.
And that still leaves us with the huge uncertainty of what will happen July 1st. Will larger cuts come? How are doctors to plan for the future of their practices given such uncertainty? Will a practice be able to bring on a new doctor? Can it afford to expand its office? Will it even be able to maintain its current office and staff structure or will it have to downsize? Because these reimbursement decisions are being made via the political process rather than the market process, attempting to plan for the future has become nearly impossible for physicians.
It also needs to be remembered that the impact of reimbursement is disproportionate to profit. A loss of 1.5% to 2.0% in revenue could translate into a much larger loss in profit depending on the percent of Medicare patients in the practice and how the overhead is structured.
Why did Congress limit it to six months? Is this the Hotel California? You can check in but not check out? Once you agree to take Medicare this year, you take it for the whole year. Thus, if the 10% cut is enacted July 1, you are stuck with it. Is this an example of bait and switch?
It has now been six and a half years that Medicare payments have not covered physician practice costs, according to Dr. Davis. I am very concerned that this trend will continue. It reminds me of the adage, “When you pay peanuts, you get monkeys!”
– Richard Dolinar, MD
Senior Fellow in Healthcare Policy, Heartland Institute, Chicago