AGS MD Fee Cut

The Honorable Thomas Daschle
United States Senate
S-220 Capitol Building
Washington, DC 20510

Dear Senator Daschle:

Unless Congress acts before this session ends, all Medicare payments to all physicians and other health care practitioners will fall by 5.4% on January 1, 2002. This significant across-the-board cut could exacerbate existing access problems for Medicare beneficiaries, particularly in rural communities.

Consequently, the American Geriatrics Society (AGS), an organization of over 6,000 geriatricians and other health care professionals who are specially trained in the management of care for frail, chronically ill older patients urges you to cosponsor The Medicare Physician Payment Fairness Act of 2001, which would trim the reduction in Medicare's 2002 physician conversion factor to 0.9% instead of 5.4%.

The 5.4% conversion factor cut recently announced by the Centers for Medicare and Medicaid Services (CMS) stems from a fatally-flawed formula that penalizes physicians for economic downturns and from CMS data errors that have short-changed physicians by $15 billion since 1998 and 1999. This would be the fourth broad-scale reduction in physicians' and other practitioners' fees since 1992 and would bring the average increase in Medicare fees between 1991 and 2002 down to just 1.1% a year-or 13% less than the government's own estimate of practice cost inflation.

The Medicare Physician Payment Fairness Act of 2001 (S.1707) sponsored by Sens. Jim Jeffords, John Breaux and Jon Kyl, would reduce the size of the penalty in 2002 and create an opportunity for Congress to make systemic changes in the physician payment update system next year. Specifically, it would reduce the current $38.26 conversion factor by 0.9% in 2002. In addition, it would direct the Medicare Payment Advisory Commission (MedPAC) to make further refinements in the Commission's earlier proposal to eliminate the expenditure target or Sustainable Growth Rate (SGR), which now helps determine annual updates in the conversion factor.

Geriatricians are uniquely impacted by reductions in Medicare fees. With a patient base of frail, elderly persons, geriatricians rely on Medicare payments more than other physicians. Furthermore, the Medicare program under-reimburses geriatricians for the time intensive care provided to their patients, and, in some instances, provides no coverage for key geriatrics services provided to beneficiaries, such as geriatric assessment. We are concerned that the proposed fee decrease could further exacerbate the situation and result in a decrease in beneficiary access to geriatric care. For this reason, we request your support for the Medicare Physician Payment Fairness Act to ensure that our elderly and disabled patients can continue to receive the care they deserve and depend on.

Sincerely,

Kenneth Brummel-Smith, MD
AGS President