American Medical News
Dec. 22/29, 2003
Medicare law starts clock on fixing payment formula
By Markian Hawryluk
With a stroke of his pen on Dec. 8, President Bush signed away two years of future cuts in Medicare payments to doctors. But amid the glee over the averted crisis, physician groups realized they have just those two years in which to avoid a disastrous situation.
The Medicare bill signed into law would set updates at a minimum of1.5% in 2004 and 2005. But because the payment update formula was left primarily intact, the extra spending over the next two years will have to be recouped in 2006 and beyond. Unless the pay formula is revised or eliminated by that time, physicians can expect a sharp reduction, or cliff, in payment.
“As the cliff physicians face in 2006 illustrates, a Band-Aid can only stop the hemorrhaging for so long,” said Carl Pepine, MD, president of the American College of cardiology. “The sustainable growth rate formula for making annual updates to Medicare fees is still inherently flawed and does not accurately reflect the cost of physician services…”
http://www.ama-assn.org/amednews/2003/12/22/gvl11222.htm
Comment: For an advance loan for the next two years which will have to be paid back through a reduction in future fees, the AMA agreed to support legislation that is designed to reduce federal funding of the entire Medicare program. Not only will they have to pay off this advance in fees, but they will have a relatively smaller pool of funds from which to draw future reimbursements. How is the AMA going to negotiate a better payment formula when the politicians will protest that we can’t afford to pay for both prescription drugs and physician fee increases?
Physicians who are more than two years away from retirement will find it in their interest to start supporting a universal program of social insurance that will recover $280 billion in administrative waste and spend that on patient care instead. More money for patient care means more money for physicians.
75% of physicians aren’t even AMA members. They should think about joining an organization that has a mission to dramatically improve the way we fund health care: Physicians for a National Health Program. By supporting reform that places the patient first, physicians will fare very well.
PNHP website, including membership information: