Medicare panel recommends 2.8% payment hike for 2007

MedPAC also says an independent panel should be created to review the proposals of the AMA committee that advises Medicare on prices.

By David Glendinning, AMNews staff. Jan. 30, 2006.

Washington -- Physicians and their allies in Congress now have something to shoot for when it comes to Medicare reimbursements in 2007.

The Medicare Payment Advisory Commission voted at its January meeting to recommend a 2.8% increase in doctors' payments next year in place of the reduction that they are facing under current law. Congress will officially receive the advice when MedPAC releases its annual payment report in March.

If lawmakers decide to listen to the commission, Medicare would pay physicians an estimated $1.5 billion more next year and as much as an additional $10 billion over the next decade, according to analysts.

The American Medical Association said this funding, which would represent next year's projected increase in practice costs minus a small percentage for expected physician productivity gains, is vital to keeping doors open to senior patients.

"The AMA and MedPAC agree. Medicare reimbursements to physicians must reflect the cost of providing care," said AMA President J. Edward Hill, MD. "We encourage Congress to accept MedPAC's recommendation to update physician payments 2.8% in 2007 to help preserve seniors' access to care."

Although lawmakers are not obligated to take the commission's advice on any of the payment recommendations in its March report, they often use MedPAC's figures as the starting point for budget negotiations that can sometimes last the entire legislative year. Often the annual recommendation also becomes the rallying point for physician lobbyists pushing for rate updates.