AMA concurs with MedPAC recommendation to update 2008 Medicare physician payment

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Statement of Cecil Wilson, MD, AMA Board Chair:

“The American Medical Association concurs with MedPAC’s recommendation that Congress stop the 2008 Medicare physician payment cut and update payments in line with medical practice cost increases, and thanks the commission for its thoughtful review. Current payments are essentially the same as they were in 2001, and over the next eight years Medicare physician payments are slated to be cut about 40 percent, while practice costs increase nearly 20 percent. The AMA is concerned that without congressional action, seniors will pay the price of this flawed payment policy with reduced access to physician care.

“Physicians are dedicated to their senior patients, and the last thing doctors want to do is stop caring for this vulnerable population, but the repeated specter of steep payment cuts forces doctors to make difficult decisions. A MedPAC survey of patient access in 2006 found that about 25 percent of Medicare patients seeking a new primary care physician continue to have problems finding one, and for the first time the number of Medicare patients having problems finding a new specialist was higher than the rate of privately insured patients. Also of concern, the share of Medicare patients reporting ‘big problems’ finding a specialist ‘significantly increased’ between 2004 and 2006. Steep Medicare cuts will surely make problems worse for seniors who rely on Medicare for health care.

“Stopping the payment cut at hand, while critical to preserving access, would only provide a temporary reprieve. What is needed is a new Medicare physician payment formula that reflects practice cost increases, so seniors’ access to care is not placed at risk on a yearly basis. The current flawed payment formula is tied to the ups and downs of the economy, not the health care needs of seniors.

“MedPAC has long called for replacing this broken payment formula with one based on practice costs. In a forthcoming report mandated by Congress, the Commission has also laid out an alternative that would expand the Medicare spending limit currently applied only to physician services to hospitals and other Medicare providers. No amount of tinkering can fix what is broken beyond repair. Instead of expanding the broken physician payment formula to other providers, physician payment updates should be determined using the same approach used for other providers — based on the cost of providing care.”
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