Senate panel passes 1% Medicare doctor pay boost

The physician community gets its foot in the door on Medicare payments. But the Senate proposal also has a pay-for-performance provision.

By David Glendinning, AMNews staff. Nov. 7, 2005.

Washington -- The Senate Finance Committee made the first concrete move toward staving off a fast-approaching Medicare physician payment reduction by approving a 1% reimbursement increase, which would go into effect Jan. 1.

Without congressional intervention, physicians would see their rates decrease by 4.4% next year and by similar percentages in several of the following years. At press time, bill handlers were preparing for full Senate consideration of the package of Medicare and Medicaid provisions containing the one-time boost for doctors.

The initial move met with cautious optimism from the American Medical Association, which has lobbied strenuously this year to hold the line against reductions in Medicare pay. AMA President J. Edward Hill, MD, praised the Finance Committee members who first proposed the temporary cut reversal.

"Ensuring Medicare patients' access to physicians by stopping planned Medicare physician payment cuts is vital to the success of the Medicare program," Dr. Hill said.

But the physician community also has pushed Congress to repeal entirely the payment formula that has paved the way for the upcoming cuts -- a move that the Senate measure would not accomplish. The 1% increase, which would cost the government an estimated $10.8 billion over five years, would lag behind the estimated increase in physicians' costs of providing services next year.

Dr. Hill suggested that lawmakers could strengthen the proposal further down the legislative line. Senate negotiators must merge their final bill with whatever budget package the House approves. "We look forward to working with the House to build upon the Senate's progress on this issue of critical importance to our nation's seniors and the physicians who care for them," he said.