Physicians Mount Grassroots Effort to Halt 26% Medicare Cut
[Posted 08/18/05]

Medicare rate cuts scheduled to begin in 2006 will make it more difficult for seniors to find a physician and further jeopardize access to care for older Californians, according to CMA’s recent Medicare survey. CMA physicians throughout the state have been carrying that message to their federal lawmakers as they meet with U.S. Senators and Representatives in their home districts during Congress’s summer recess.

If Congress doesn’t act now to fix the Medicare payment formula, payment rates to physicians will begin to nosedive 4 to 5 percent a year in January, plummeting 26 to 30 percent in real dollars by 2012. Physician practice costs are expected during that same time period to rise 15 percent, according to MedPAC, the independent commission established by Congress to advise on Medicare payment issues.

The physician payment cuts are an unintended consequence of a Medicare formula created by Congress that was supposed to establish a “sustainable growth rate” (SGR) for spending on physician services. 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.

For More Information Click here for talking points. CMA's Medicare Report: "Will Your Doctor Be There?" Click here to download CMA's "Save Medicare" poster. For more information, see AMA's Medicare Physician Payment Action Kit. Find your lawmakers’ contact information:    [SENATE] [HOUSE OF REPRESENATIVES] Read the full text of these bills: [S. 1081] [H.R. 2356] Bill Summaries: [S. 1081] [H.R. 2356] Act Now to Stop Medicare Cuts: Physicians Urged to Contact Lawmakers in District Offices During Congress’s Summer Recess [Posted 07/28/05] CMA Develops P4P Guidelines for Medicare and Others [Posted 07/21/05] AMA Survey Forecasts Medicare Access-to-Care Crisis if Physician Rates are Cut [Posted 04/07/05]

CMA in May surveyed California physicians and found that 60 percent of physicians will no longer accept new Medicare patients, and 40 percent would be forced to stop treating Medicare patients completely, if Congress fails to replace the Medicare SGR formula. Though the question was not asked in the survey, 10 percent of the 490 physicians responding to the survey wrote in that they would quit practicing medicine altogether, citing rising costs and decreasing Medicare reimbursements. Another third said they would be forced to reduce the time spent with Medicare patients.

“The Medicare program is in crisis,” said CMA President Michael Sexton, M.D. “Medicare payments to physicians aren’t keeping pace with the cost of providing care, and physicians who want to continue to treat Medicare patients cannot afford these cuts.”

The House and Senate are considering separate bills—both called the Preserving Patient Access to Physicians Act of 2005—that would provide a physician payment increase for 2006 of at least 2.7 percent, as recommended by MedPAC. The Senate bill (S 1081) would also provide an estimated 2.6 percent increase in 2007.

The House bill (HR 2356) would provide a permanent fix to the Medicare payment formula, calculating physician rates in 2007 and beyond with a new formula based on the Medicare Economic Index (which measures physician practice cost inflation).

CMA urges physicians to join with CMA and medical societies across the nation in pushing for federal legislation that would stop the cuts and replace the current payment formula with calculations based on the true costs of providing medical care, as is already done for hospitals, nursing homes, and home care services.

Contact: CMA Government Relations, 916/444-5532 or leginfo@cmanet.org.