AMA Survey Forecasts Medicare Access-to-Care Crisis if Physician Rates are Cut
[Posted 04/07/05]

The looming Medicare physician payment cuts will hurt access to care for America’s seniors and disabled, according to an AMA survey released this week. If Congress fails to fix the flawed sustainable growth rate (SGR) formula, physicians will face reimbursement cuts totaling 26 percent over six years beginning in 2006. The 2005 Medicare Trustees report indicates that practice costs will go up 15 percent during that same time period.

The projected cuts are an unintended consequence of an unsound SGR formula. The formula allows Medicare spending on physician services to grow at the rate of the gross domestic product (GDP), but it actually penalizes physicians because the cost of physician services rises more rapidly than the GDP.

Unfortunately, CMS must as a matter of law apply the SGR formula when calculating Medicare fees. CMA believes that SGR should not be used to update physician fees because it is based on GDP, not medical inflation.

“Physicians are sensitive to the budgetary challenges facing Congress, but if something isn’t done to fix the broken SGR formula physicians will not be able to afford to treat Medicare patients,” says CMA CEO Jack Lewin, M.D. “Our House of Delegates said that fixing the SGR must be CMA’s top federal legislative priority. We will continue to work hard to make this happen before the cuts take effect next year.”

Congressional intervention in 2003 and 2004 staved off two previous rounds of cuts, turning projected cuts into small increases. AMA and CMA continue to advocate for a long-term legislative solution.

“Medicare payments to physicians already seriously lag behind the increasing cost of providing medical care. If Congress and the Administration fail to act soon, physician payment cuts of 26 percent over six years will be devastating to the foundation of Medicare,” says AMA President-Elect J. Edward Hill, M.D. “According to AMA’s survey, 38 percent of physicians will decrease the number of new Medicare patients they accept due to the first Medicare payment cut scheduled to take place in 2006. And that is just the tip of the iceberg, as the vast majority of cuts are scheduled to come after 2006.”

Sixty-one percent of physicians who responded to the survey said that they will defer purchase of new medical equipment if Medicare reimbursement is cut as scheduled in 2006. Fifty-seven percent will reduce time spent with Medicare patients, 54 percent will defer purchase of information technology, 52 percent will begin referring complex cases, and 49 percent will stop providing certain services. And if the cuts continue through 2013 as scheduled, 71 percent of physicians surveyed say they will reduce time spent with patients or stop providing certain services and 47 percent said they will retire.

Contact: Elizabeth McNeil, 415/882-3376 or emcneil@cmanet.org.