It's official: Unless Congress acts, Medicare physician pay will be cut 4.4%

Physician groups urge lawmakers to fix the Medicare payment problem when they return this month.

By Markian Hawryluk, AMNews staff. Jan. 13, 2003.

Washington -- The Centers for Medicare & Medicaid Services confirmed in late December the bad news physicians have expected for some time: Medicare payment rates will be cut by 4.4% this year. CMS provided at least some good news by delaying the effective date of the cuts until March 1.

The cut was made official with the release of the 2003 fee schedule rule, which quantified the update for this year and set the clock in motion for a last-ditch effort to avert reductions.

"CMS recognizes that this will be the second year in a row in which physician fees will be affected by a negative update," CMS Administrator Tom Scully said. "Nothing would make us happier than to not be issuing this rule today."

Scully said the administration had no choice under the law but to issue the negative update, even though the agency believed a 1.6% increase in rates was appropriate.

"The reduction in physician fee schedule rates results from a formula specified in the Medicare law, and we believe that the formula is flawed and must be fixed," Scully said. "The administration has been, and continues to be, anxious to work with Congress to fix flaws in the formula as soon as possible. We want doctors and patients to see Medicare as a trustworthy partner in providing quality services."

The American Medical Association is urging lawmakers to put an update correction at the top of the new Congress' agenda in January.

"Last Congress, the House of Representatives passed two bills to help avert the cuts, but the Senate left Washington without fixing the Medicare payment mistake that is threatening access to care for America's seniors," said AMA President Yank D. Coble Jr., MD. "Now the next round of cuts is imminent on March 1, leaving just a tiny window of opportunity for Congress to stop the crisis when lawmakers return in January."