Physicians, CMA needs you to turn up the heat on your members of Congress and motivate them to fix the Medicare payment problems before Congress adjourns in September. As you know, CMA has for years been fighting for long-term fix to Medicare’s flawed sustainable growth rate (SGR) formula.

If Congress fails to act before the end of the year, physician rates will be cut 5 percent on January 1 of next year, and rates will be cut by a total of 35 percent during the next six years. The cuts are an unintended consequence of a formula, established under laws passed in 1989 and 1997, that was supposed to establish a “sustainable growth rate” for spending on doctors’ 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.

Reimbursement for all other Medicare providers is calculated using the Medicare Economic Index (MEI), which is a market index of actual medical practice costs. Health plans, hospitals, and nursing homes are all seeing payment increases, while physician payments are being slashed.

The inequities are glaring:

Congressional leaders have hinted that they may only be able to freeze payments at 2005 levels. With practice costs increasing at a rate of 4 to 6 percent a year, a payment freeze would essentially be a pay cut.

Tell your members of Congress that a payment freeze is not acceptable and urge them to dump the flawed SGR physician payment formula and replace it with a new formula based on the MEI, which would increase physician payments by 2.8 percent in 2007. Tell them that failure to reform the Medicare payment formula will make it more difficult for seniors to find a physician and further jeopardize access to care.

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