Medicare physician payment reform

Congress needs to hear from you!

Without congressional action Medicare physician payment rates will be reduced 10.6 percent in July 1, 2008, and an additional 5 percent on January 1, 2009. The 2007 Medicare Trustees report predicts total cuts of about 40 percent by 2016.

It is critical that Congress take action to replace the next 18 months of cuts with positive updates based on practice cost increases. An AMA survey revealed that 60 percent of physicians reported that they would have to limit the number of new Medicare patients they treat if payments are cut 10 percent in 2008. More than half of physicians report that they cannot meet their payroll and will have to reduce their practice staff.

The Medicare physician payment update formula is producing disastrous effects. In addition to generating the pending steep pay cuts, the formula:

• Has kept average 2008 Medicare physician payment rates about the same as they were in 2001
• Prevents physicians from making needed investments in staff and health information technology to support quality measurement
• Punishes physicians for participating in initiatives that encourage greater use of preventive care in order to reduce hospitalizations
• Has led to a severe shortfalls in Medicare’s budget for physician services that have driven Congress to enact short-term interventions with funding methods that have increased the duration of cuts, as well as the cost of a long-term solution
• Hurts access to care for America’s military families, as payment rates in the Department of Defense’s TRICARE program are tied to Medicare rates

LEGISLATIVE UPDATE: S. 2785, The Save Medicare Act of 2008, has been introduced in the Senate. This bill would stop the Medicare physician payment cuts for 18 months, long enough to begin working on a long-term solution to the broken payment system. In addition, the bill will not increase the cost of permanently fixing the fatally flawed Medicare physician payment system. Urge your U.S. Senators to co-sponsor this legislation.

See the AMA Physician Payment Action Kit for more information, and then take your findings and use them as an opportunity to talk to your patients, your colleagues and most importantly, your members of Congress.

Also, sign up for the AMA Physician Grassroots Network to receive updates on the Medicare physician payment rate legislation as we move forward.

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