Medicare 2008 premium hike low, but doctor pay remains unresolved

Physician organizations are crying foul that private health plans are expected to get a payment increase while doctors get a reduction.

By David Glendinning, AMNews staff. Oct. 22/29, 2007.

Washington -- Medicare premiums for outpatient services next year will rise just 3.1% -- the smallest percentage increase in seven years -- due partly to the fact that physician rates are set to be cut by nearly 10% in January.

The standard Medicare Part B monthly premium will be $96.40 next year, an increase of $2.90 from the current level. Beneficiaries with higher incomes will be required to pay more based on a sliding scale.

The largest chunk of the premium increase is caused by a projected jump in spending on Medicare private health plans. The juxtaposition of physician payment cuts with Medicare Advantage pay increases has physician organizations bristling. They argue that the insurers already are overpaid.

"It is outrageous that all Medicare patients are helping subsidize overpayments to private insurance companies while only one in five Medicare patients participates in a private Medicare plan," said American Medical Association Board of Trustees Chair Edward L. Langston, MD. "Medicare patients' premiums are rising, yet the government is cutting payments to the doctors who care for them, which will make it harder for seniors to see the doctor."

Physician associations, which are pushing hard to have Congress vote to prevent the payment cuts, have recent history on their side.

"Current law requires reductions in physician fees of approximately 10% in 2008 and another 5% per year for approximately 10 more years," the Centers for Medicare & Medicaid Services stated in a fact sheet.