Payment cuts could mean patient access problems

AMA Leader Commentary. By Timothy T. Flaherty, MD March 4, 2002.

AMA LEADER COMMENTARY

A few words about current events in medical practice

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A message to all physicians from Timothy T. Flaherty, MD, chair of the AMA Board of Trustees.

What do you get when you add skyrocketing practice costs to dwindling Medicare payments? Answer: Physicians who can't afford to treat new Medicare patients.

Unfortunately, this isn't a hypothetical question. On Jan. 1, Medicare reimbursements to physicians were slashed by 5.4%. This precipitous drop in physician payment, combined with rapidly rising practice costs, could limit access to care for Medicare patients -- just as it did in 1992. That year, Medicare physician payments were cut by 3% and the percentage of physicians accepting new Medicare patients dropped from 79% to 75%.

This time around, we need to get to the root of the problem: the fatally flawed formula for determining the physician payment update. This formula pegs Medicare physician payment to the gross domestic product, but it doesn't take into account the cost of running a practice. More than two-thirds of Congress agree the problem needs to be fixed, and President Bush has said he will work the Congress to do just that. In testifying on the matter, Health and Human Services Secretary Tommy Thompson said, "We agree that changes should be made."

Unfortunately, legislation that would correct the update formula -- and modify the payment cut -- got sidelined before the holiday recess. We want to see this legislation brought to the floor for a vote -- and quickly. Otherwise, states with high concentrations of Medicare patients will pay the price. [...]