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Medicare trustees: Gloomy forecast for physician reimbursement rates

Doctor pay relief and other program costs would trigger a premium increase, the panel said.

By David Glendinning, amednews staff. April 11, 2005.

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Washington -- The annual report from Medicare's trustees once again dishes up sobering news for doctors: They can expect six straight years of rate reductions starting in January unless lawmakers act to stop it.

Congressional intervention already has staved off two previous rounds of cuts, and more help will be needed to prevent a cumulative reduction of about 26% over the six-year period. Such projections actually represent an improvement over last year's report, which predicted a roughly 31% cumulative reduction before rates would start to improve.

But the AMA and other groups said that the new estimates provide little solace to a physician community that cannot count on federal dollars to keep up with practice costs.

"The new Medicare trustees report projects cumulative physician payment cuts of approximately 26% beginning in January 2006 and continuing through 2011, while at the same time the costs of running a practice and caring for patients will go up 15%," said AMA President-elect J. Edward Hill, MD. "These cuts present a serious threat to patient access to care."

Meanwhile, the Medicare trustees acknowledged that their projections are unrealistic because Congress will likely act.

"Multiple years of significant reductions ... are very unlikely to occur before legislative changes intervene, but these payment reductions are required under the current law payment system and are reflected in the projections shown in this report," they said.