Medicare Compliance & Reimbursement

Organization says if Congress cuts payout, docs will cut Medicare patient loads.

Senior citizens will begin losing access to their physicians if Congress does not reverse looming cuts in Medicare physician compensation.

That's the case American Medical Association president Edward Hill, MD, made in an April 5 briefing. Based on an AMA survey of its member physicians, Hill said 38 percent of physicians will decrease the number of new Medicare patients they accept, and 18 percent will decrease the number of established Medicare patients they treat, if the 5 percent cut called for under current law goes into effect as scheduled on Jan. 1, 2006.

As Hill acknowledged, the access argument is one that his organization has made frequently in pushing causes from increases in Medicare physician payments to caps on noneconomic damages in medical malpractice cases. And it hasn't always been borne out: "If you look at history, it will tell you that doctors will complain, but then take what they get and keep seeing Medicare patients," said Hill.

"But we're concerned that we're reaching the point now where you can't operate a business with that philosophy any longer," continued the family physician from Tupelo, MS. Hill readily admitted that physicians are among the most highly paid members of society, saying that he would "never try to defend the personal income of physicians."

But he noted that the costs of running a medical practice, which went up by 41 percent from 1991-2005, are expected to increase another 15 percent in the six years beginning in 2006. In contrast, Medicare physician payments went up only 18 percent from 1991-2005, and would decrease by 26 percent under current law from 2006 through 2011.

The AMA wants Congress to scrap the "sustainable growth rate" formula which links physician pay to the gross domestic product and replace it with a system akin to those Medicare uses to compensate other types of providers. The Medicare Payment Advisory Committee has recommended replacing the SGR with "the same approach that is used for hospitals and nursing homes under Medicare - a system where payment updates would reflect practice cost inflation. We could not agree more," Hill said.

According to the Congressional Budget Office, though, that switch would cost the federal government upwards of $45 billion over 5 years, and such a large price tag probably makes this option a nonstarter in today's extremely tight budget climate. Most observers expect Congress to enact a temporary fix instead, giving physicians a one- or two-year bump, perhaps conditioned on the reporting of quality information to pave the way for pay-for-performance system in the coming years.

One caveat: The cost of a permanent physician payment fix could fall if the AMA succeeds in convincing the Centers for [...]