It's official: 10.1% Medicare pay cut for physicians unless Congress acts

Doctors are pressing lawmakers to pass an update that reflects increases in the cost of caring for Medicare patients.

By Doug Trapp, AMNews staff. Nov. 19, 2007.

Washington -- In what is becoming an annual rite, physicians are again fighting to prevent a reduction in Medicare payments. This time, however, the cut is in the double digits and is the largest ever.

The Centers for Medicare & Medicaid Services final 2008 Medicare physician fee schedule rule institutes an average 10.1% pay cut effective Jan. 1, 2008, although the percentage will vary by specialty, practice and geography.

The rule also lists the 74 quality measures to be used in the Physicians Quality Reporting Initiative in 2008. It specifies that a $1.35 billion fund adopted last year will go to the PQRI and not toward easing physician pay cuts. The regulation also delays finalizing most of the latest revised physician self-referral, or "Stark," rules.

Medical organizations called the 10.1% reduction unacceptable.

"Congress must step in to replace the cut with payment increases that keep up with medical practice costs," said American Medical Association Board of Trustees Chair Edward L. Langston, MD. "Next year's 10.1% physician payment cut is bad news for America's seniors as 60% of physicians say the cut will force them to limit the number of new Medicare patients they can treat."

Dr. Langston suggested using $54 billion in what doctors view as excess payments to private Medicare health plans to offset the cut. These Medicare Advantage plans received 112% of the amount that traditional Medicare paid for each senior's care in 2006.