AMA Wire

Wednesday, March 6, 2013

This Week's News

Sequester to cut Medicare physician payment, other health care spending

Sequester to cut Medicare physician payment, other health care spending

Physicians will see a 2 percent reduction in Medicare payments beginning April 1, thanks to the federal budget sequester that took effect Friday.

"Our lawmakers have failed to act, and Medicare patients and physicians will now feel real pain in the form of new cuts that come at an already difficult time for the nation's economy," AMA President Jeremy A. Lazarus, MD, said in a statement issued Friday.

The Medicare program has been on shaky ground for many years as Medicare's sustainable growth rate formula has meant that physician payments increased by just 4 percent since 2001, while the cost of caring for patients has grown by more than 20 percent.

The AMA continues to urge Congress to reform the Medicare program by eliminating the failed formula and implementing new models of care delivery and payment—a system outlined in the AMA's principles for a high-performing Medicare program.

Dr. Lazarus said the sequester cut is a step in the wrong direction.

"[P]hysicians need to make investments in their practices to help design, lead and adopt new models of care delivery that can increase quality and reduce costs now and in the future," he said. "Further cuts are counterproductive and stifle important progress while placing an unsustainable burden on physician practices."

In addition to Medicare physician payments, Medicare funding for graduate medical education will be reduced by 2 percent. Other federal health care spending will undergo cuts of about 5 percent. Among the areas hit are research and public health programs of the National Institutes of Health, the Centers for Disease Control and Prevention, and the Substance Abuse and Mental Health Services Administration.