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What is the key issue concerning Medicare physician reimbursement?
- Under Medicare's contentious Sustainable Growth Rate (SGR) formula, Medicare payment rates for physicians are scheduled to drop 10.6% on July 1, 2008. The SGR mandates cuts in physician payment rates when growth in outlays for physicians' services exceeds growth in Gross Domestic Product.
- In December, President Bush signed into law a Medicare bill that, among other things, delayed a pending 10.1% physician fee cut that would have taken effect January 1 - setting the stage for the larger 10.6% cut scheduled to take effect July 1.
- The SGR is projected to mandate Medicare payments cuts totaling roughly 40% over the next nine years - during which practice costs are expected to increase 20%.
- In previous years, Congress has blocked the SGR-mandated cuts -- in the wake of concerted advocacy efforts by the American Geriatrics Society, its members and other advocates of quality healthcare for older Americans.
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What is the status of plans and proposals regarding Medicare physician reimbursement?
- Congressional aides are optimistic that they can draft a Medicare reform package that will delay a pending 10.6% Medicare physician fee cut -- slated to take effect July 1 -- for 18 months.
- The 18-month delay would give legislators time to work on broader healthcare reform and is likely to be the "centerpiece" of a Medicare package that could cost $12 to $15 billion over five years, according to a Congressional aide. Lawmakers are concerned that, should Congress fail to block the 10.6% fee cut, doctors may stop seeing Medicare patients.
- Although the Bush Administration appears to support a long-term fix, Republicans and the White House would still likely oppose cutting payments to private Medicare Advantage plans as a way to offset the costs of the 18-month delay.
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Why is this issue important?
- A Medical Group Management Association (MGMA) survey released in March 2008 found that nearly half of the more than 1,000 practices responding reported that a 10.6% cut in Medicare physician payments scheduled to take effect July 1 has lead them to stop accepting or limit the number of beneficiaries they accept. Half of the practices said they were considering reducing administrative and clinical staff and more than two-thirds indicated they would forgo or postpone investments in health information technology.
- The payment cuts would likely have both immediate and long-term effects on access to appropriate elder healthcare. Below-market reimbursement is a leading disincentive to entering or remaining in the field of geriatric medicine. Further cuts in payments are likely to discourage promising candidates from pursuing careers in geriatrics and may also exacerbate the loss of practicing geriatricians. They could also encourage academic geriatricians from remaining in the field, further threatening the future supply of geriatrics health professionals.
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What is the Society's position on physician reimbursement?
The AGS strongly endorses efforts to ensure fair Medicare reimbursement for physicians. We are concerned that the pending 10.6% cut, coupled with continued increases in physicians' practice expenses, could force a growing number of doctors to see fewer Medicare beneficiaries or stop seeing Medicare beneficiaries altogether. Clearly, the SGR formula has proven to be neither sustainable for physicians nor beneficial for older Americans. Physician payment updates should be based on annual increases in practice costs. AGS strongly supports reforms in the physician fee schedule system that will ensure elderly patients access to quality health care.
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