Lawmakers ask CMS help in raising Medicare doctor pay

Changes in the way Medicare calculates annual updates could alleviate a payment crunch.

By Markian Hawryluk, AMNews staff. May 3, 2004.

Washington -- Doctors and lawmakers concerned about projected Medicare cuts are hoping the program's new administrator will be a little more open to change than his predecessor.

In his first month as administrator of the Centers for Medicare & Medicaid Services, Mark McClellan, MD, PhD, already has received a written request from House lawmakers to make changes to Medicare's physician payment formula. Similar requests were rebuffed by the previous CMS administrator, Tom Scully, who maintained that the agency did not have the legal authority to make the changes.

Although Congress passed a temporary reprieve from pay cuts for 2004 and 2005, new CMS estimates suggest that physicians could face seven consecutive years of 5% cuts in payment. Without changes in the formula, physicians in 2014 would be paid at rates about 40% lower than in 2005.

"This is simply unacceptable," House Ways and Means Committee Chair Bill Thomas (R, Calif.) and Health subcommittee Chair Nancy Johnson (R, Conn.) wrote.

The AMA applauded the lawmakers for championing pay reform and called for cooperation to avoid cuts. "The administration can take some immediate steps to ease the burden on physicians," said AMA President Donald J. Palmisano, MD. "But until the Medicare physician payment formula is truly reformed, Medicare patients' access to care will be subject to the vagaries of a formula that does not account for their health care needs."

Thomas and Johnson asked CMS to remove the impact of prescription drug spending growth from the formula, to review its assumptions about physician responses to payment cuts and to better account for the costs of new benefits and other factors affecting physician income. At press time, CMS had not responded to the request.