Democrats awaiting MedPAC report to begin discussing Medicare physician payment reform

Members of the Medicare Payment Advisory Commission on Thursday will testify before House and Senate committees with jurisdiction over Medicare about their annual report, which likely will include recommendations on revisions to the Medicare physician reimbursement formula, the Palm Beach Post reports.

According to the Post, some lawmakers seek to revise the formula this year to avoid the "bleak choice" between reduced Medicare physician reimbursements, which could limit access to care for beneficiaries, and increased Part B premiums and copayments for beneficiaries. Under the current formula, Medicare physician reimbursements decrease when prior year payments exceed a target level based on the growth of the economy. Medicare physician reimbursements decreased by 5.4% in 2002, but Congress prevented scheduled reductions in each subsequent year because of concerns that physicians would end their participation in the program. According to the Post, Medicare physician reimbursements would decrease by 10% next year and by 40% during the next eight years without congressional action. Physicians have said that since 2001, the difference between their costs and their Medicare reimbursements has increased to about 19%. Cecil Wilson, board chair of the American Medical Association and an internist, said the current system is "not sustainable," adding, "It is based on how the economy is doing. It has nothing to do with the providing of medical care."

Potential Congressional Action
Congressional Democratic leaders have promised to address the issue of Medicare physician reimbursements this year, but they "have given little hint how that will be accomplished," according to the Post. Congress could prevent scheduled reductions in Medicare physician reimbursements and not include the cost in the formula used to determine Part B premiums for beneficiaries. According to the Congressional Budget Office, the proposal would cost the federal government an additional $12 billion to $107 billion, based on whether Congress prevented scheduled reductions in Medicare physician reimbursements, increased payments by 1% to 1.5% or increased payments at the same rate as the growth in their costs. Congress also could revise the Medicare physician reimbursement formula to determine payments regionally, rather than nationally, or might consider determining payments in part based on quality of care (Lipman, Palm Beach Post, 2/27).