Medicare advisory panel backs doctor pay hike in 2008

A separate MedPAC report will present Congress with the options of expanding the physician pay formula to all of Medicare or repealing it.

By David Glendinning, AMNews staff. Feb. 5, 2007.

Washington -- The commission that advises lawmakers on Medicare rates once again will urge them to replace next year's physician payment cut with a rate increase that better reflects the costs of providing care.

The Medicare Payment Advisory Commission, in a report due to Congress on March 1, will recommend that doctors receive an update equal to next year's estimated increase in costs minus a small percentage to account for an expected increase in physician productivity.

Under current projections, that would give doctors a 1.7% boost in 2008 if lawmakers decided to take the advice. That estimate could change during the year as projections are adjusted.

If the recommendation to revise the 2008 rates is not heeded, doctors could see their Medicare pay slashed by about 10% next year. MedPAC estimated that it would cost the federal government more than $10 billion over five years to make the change that it is suggesting.

The commission's decision to recommend an increase in its annual payment report drew applause from the American Medical Association.

"The AMA concurs with MedPAC's recommendation that Congress stop the 2008 Medicare physician payment cut and update payments in line with medical practice cost increases, and thanks the commission for its thoughtful review," said AMA Board of Trustees Chair Cecil B. Wilson, MD. "Current payments are essentially the same as they were in 2001, and over the next eight years Medicare physician payments are slated to be cut about 40% while practice costs increase nearly 20%."