Looking beyond the Medicare pay patch

A reprieve provides a small window to stave off an enormous Medicare pay cut for doctors.

Editorial. Jan. 21, 2008.

Amid all the other evidence that Medicare's physician payment formula is fundamentally flawed is that it requires an annual, cliff-hanger adjustment in Congress to stave off a crisis.

The last-minute pay patch approved late last month is notable in that it doesn't cover even a full year. Physicians will see a half-percent pay increase for six months. But if there is no agreement by June 30 -- and one proved elusive through 2007, save for this stopgap -- even that small raise disappears. At that point, the 10.1% cut that was slated to greet the start of 2008 would go into effect.

If this drastic cut goes through -- actually just the first big jolt of a projected 40% in cumulative reductions in coming years -- there is little doubt that it would hurt seniors' access to care.

In previous years, threatened cuts were smaller (though still outrageous), and pay was raised a bit more than this time -- or not at all. Overall, when balanced against even the government's medical inflation figure, doctors have fallen behind -- and will lose ground drastically if anticipated cuts are made.

Yet physicians soldiered on. This go-round, though, it's likely that a number of doctors gave serious thought, perhaps for the first time, to canceling the otherwise automatic renewal of their Medicare participation agreements. (The payment patch gives doctors a second chance -- the deadline for changing participation status has been extended to Feb. 15.)