Help stop the Medicare cuts

This column was originally published in AMA eVoice on Nov. 1, 2007 . Dr. Davis is president of the American Medical Association.

Time is getting short. Without congressional action, Medicare physician payments will be slashed 10 percent on Jan. 1. Worse, this year's Medicare Trustees report predicts that cuts will total about 40 percent by 2016.

According to an AMA Member Connect^® Survey, almost one-third of physicians said they will reduce the number of new Medicare patients they accept if the 10 percent cut goes through in January. And almost 30 percent will stop accepting new Medicare patients altogether. Even more disturbing, if this cut takes effect, almost one-third of physicians said they will reduce the number of established Medicare patients they see. And another 8 percent will stop seeing any Medicare patients.

That's why it's critical that legislators act immediately to replace the cuts with positive updates based on practice cost increases. The Medicare Payment Advisory Committee (MedPAC) has recommended that Congress increase payment rates by 1.7 percent in 2008, which would be in line with the estimated practice cost increase. Congress needs to listen to MedPAC and tie physician payment to the Medicare Economic Index (MEI), the government's own index for the costs of running a physician practice.

This summer, the U.S. House of Representatives passed legislation that includes two years of positive updates as part of a bill to reauthorize the State Children's Health Insurance Program (SCHIP). Unfortunately, the Medicare language was not included in SCHIP legislation passed by the Senate, or in subsequent compromise SCHIP bills.

The AMA continues to work closely with county, state, and national specialty medical societies, as well as other stakeholders, such as AARP, in strongly pushing Congress, specifically the Senate, to take immediate action to avert the cuts by adopting two years of positive updates and to establish a pathway for passage of a long-term solution in 2009.

AMA advocacy on this issue includes an aggressive lobbying and advertising effort highlighted by e-mails, letters, phone calls, direct mail brochures, and TV, print and Internet ads. Among the ads is this TV spot, which the AMA developed with AARP, that recently aired in select parts of the country.

It's important that legislators dedicate new funding to these updates so the overall cost of replacing the current Medicare physician payment formula doesn't get more expensive. A few years ago, the Congressional Budget Office (CBO) estimated that permanently replacing the current Medicare physician payment formula would cost $90 billion. Now the CBO says the price tag to replace the current Medicare physician payment formula with the MEI is $262 billion. As Congress continues to kick the can down the road, effective remedies are becoming more and more costly.

Under current law, however, new spending increases must be offset by corresponding spending decreases or increases in revenue, and members of the Senate Finance Committee have yet to agree upon offsets. One option, which the AMA is advocating, is reducing overpayments to private Medicare Advantage plans. By eliminating $54 billion in excess payments to insurance companies, Congress can preserve seniors' access to health care by funding payment increases for physicians and limiting patient premium increases.

Now is the time to contact your members of Congress, particularly your senators, and urge them to stop the Medicare physician payment cuts. Please ask them to adopt two years of positive updates and to establish a pathway for passage of a long-term solution in 2009.

If you've already contacted your senators, please do so again. Although Congress will recess tomorrow for Thanksgiving, any calls or e-mails can make a difference for when legislators return to Capitol Hill. Also, sign up for the AMA Physician Grassroots Network to receive updates on the Medicare physician payment issue as we move forward.