Congress must act now to avert crisis and keep Medicare program strong

Apr 5 2005

A survey of physicians released by the American Medical Association (AMA) indicates that steep Medicare payment cuts to physicians, nurses and other health professionals will hurt access to care for America's seniors and disabled.

"Physicians want to serve America's seniors, but they simply cannot afford to accept an unlimited number of new Medicare patients into their practices if Medicare payments do not keep up with the cost of providing care." said J. Edward Hill, MD, AMA president-elect. "According to the 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."

The new 2005 Medicare Trustees Report, released last month, projected sharp Medicare physician payment cuts of 26 percent over six years beginning in 2006. That same Medicare Trustees Report indicates the cost of running a practice and caring for patients will increase 15 percent during that time.

"Medicare payments to physicians already seriously lag behind the increasing cost of providing medical care," Dr. Hill said. "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."

Other survey results show additional practice changes physicians will be forced to make as a result of the cuts. For example, if Medicare payments are cut by about 5 percent in 2006, 61 percent of physicians plan to defer purchase of new medical equipment and 54 percent plan to defer purchase of information technology. "This is bad news because new medical equipment and information technology are critical for the kind of continued quality improvement that the AMA, the federal government, and America's patients hope for in years to come," Dr. Hill said.

The impending Medicare cuts are the result of the government's flawed physician payment formula that defies logic and ignores economic reality. "The AMA is sensitive to the fiscal challenges facing policymakers, but it is shortsighted and dangerous to allow an illogical and flawed formula to play Russian roulette with something as important as health care for America's seniors," Dr. Hill said. "Congress and the Administration must act now to stop the impending cuts and replace the flawed physician payment formula, as MedPAC has recommended. America's seniors deserve no less."

http://www.ama-assn.org/