Pre-election push on to fix Medicare payment

Doctors' efforts to get a bill passed by October are complicated by the news that Medicare premiums will rise more than 10% next year.

By David Glendinning, AMNews staff. Aug. 7, 2006.

Washington -- The American Medical Association is urging lawmakers on Capitol Hill to reverse next year's Medicare physician pay cut before Congress adjourns for the mid-term elections. This effort is occurring against a backdrop of rising federal spending and beneficiary premiums.

The AMA has called on lawmakers to turn next year's projected 4.7% reimbursement reduction into an increase before they leave town in October. Eighty senators signed onto a July 17 bipartisan letter to Senate leadership backing this call to action.

"Physicians are the foundation of the American health care system," the lawmakers wrote. "A stable payment structure for physician services is critical."

A mid-year budget review released by the White House just days before the letter came out, however, concludes that Medicare is spending more on physician services as time goes on even without taking reimbursement rates into account. The Bush administration's projection of what Medicare will spend on doctor care in the next five years now stands at just over $1 trillion, an increase of $30 billion over its estimate from February. The change is largely due to an unexpected jump in the number and complexity of services that doctors are delivering.

"This rapid growth in services administered in physicians' offices is driven by more use of more intensive physicians' services, including imaging, physician-administered drugs, minor procedures, physical therapy, dermatology, lab tests, and evaluation and management services," CMS said in a fact sheet accompanying the budget review. "Use of many of these services varies substantially across practices and geographic areas, with no clear impact on patient health."