AMA lobbies Congress to block planned Medicare physician payment cut before recess

Most U.S. residents are not aware of a Bush administration proposal to cut Medicare reimbursements for physician services by 5.1% for 2007, but when informed, a majority say they are concerned that the cuts could restrict access, according to a survey released on Thursday by the American Medical Association, the Raleigh News & Observer reports (Goldsmith, Raleigh News & Observer, 9/8).

Congress in 1997 limited annual increases in Medicare reimbursements for physician services, but Congress has waived the cuts in most of the years that reductions would have been applied (Alonso-Zaldivar, Los Angeles Times, 9/8). Physician rates currently are set by a sustainable growth-rate formula. Congress in January halted a 4.4% cut that was scheduled for 2006. Medicare reimbursements for physician services are slated for nine years of cuts beginning in 2007 if Congress does not enact changes (Barrett, CQ HealthBeat, 9/7). CMS Administrator Mark McClellan in August said it would cost the federal government $13 billion over five years if Congress acts to block the 2007 cut (Kaiser Daily Health Policy Report, 8/9). The AMA survey, which questioned more than 1,000 adults by telephone in July, finds that 70% of adults are not aware that the cut was scheduled to occur. Once informed about the cut, 86% of respondents said they were worried that it might impede seniors' access to health care. A separate AMA survey conducted in March finds that 45% of physicians say they would scale back services to Medicare beneficiaries or stop treating them altogether if the cuts are implemented. The most recent survey prompted AMA to call on lawmakers to block the cuts, CQ HealthBeat reports (CQ HealthBeat, 9/7). AMA has "launched a nationwide blitz, ... insisting that lawmakers act before they adjourn in October to campaign for re-election," the Times reports.

Administration Stresses Quality-Based System

The Bush administration "is showing no sign that it wants to hold off the cuts," and aides to congressional leaders have indicated that no action is likely to take place, according to the Times. Herb Kuhn, director of the CMS Center for Medicare Management, said, "To throw more money into this old system is not the right answer. We need to work together to find a better and more appropriate way to pay." Kuhn said physician reimbursements should be based on the quality of care provided rather than on the number of office visits held (Los Angeles Times, 9/8). Medicare spokesperson Peter Ashkenaz said, "We believe that the system itself is broken and that we shouldn't be sending money into a bad system; we should fix it" (Raleigh News & Observer, 9/8). Senate Finance Committee Chair Chuck Grassley (R-Iowa) has said payment increases should be linked to reforms that reward quality care. AMA is working with Medicare to design measurements of quality.

AMA Reaction

AMA board member William Hazel said, "It is probably fantasy to think that we are going to be able to create a quality program in the next 30 days that is going to solve Medicare's problem. Absent that, we need to get the payment problem resolved." Hazel added, "The predicate for having a quality system is to have enough funding in the system for physicians to be able to afford to practice. We can't take the hit now and be expected to offer better services" (Los Angeles Times, 9/8). In addition, Hazel said that because the 2006 cut was cancelled after the start of the year, doctors received reimbursements at the reduced rate "for a month or so." Hazel said the 2007 cut should be cancelled before the start of 2007. "It is hard to predict what plans [doctors] can and cannot participate in by the end of the year if you don't know what the rules are going to be," Hazel said (CQ HealthBeat, 9/7).