Senate Rescues Physicians’ Pay

Med Headlines - Doctors across the country faced a nasty 10.1% cut in pay beginning January 1 for treating patients under the Medicare Part B program. Instead, they will receive a slight raise, of 0.5%, thanks to a last-minute rescue from the US Senate. This pay rate will last only for the next six months without further intervention from Congress.

Citing a system that is broken beyond repair, Edward Langston, MD, recently expressed disappointment for the short-term fix and urged Congress to break the tradition of short-term interventions and replace it with something more stable for the sake of Medicare patients and physicians alike. Langston is board chairman for the American Medical Association (AMA).

The current formula used to determine Medicare physicians’ pay is based on the growth rate for health spending. This growth rate is, in turn, formulated using the number of Medicare patients, gross domestic product, and the cost to operate a medical practice.

When spending tops a targeted cap rate, the rate of pay to physicians is reduced. Under the current system, AMA predictions point to a pay cut for physicians of about 40% by 2016.

Surveying almost 9,000 doctors, the AMA discovered 77% of them would be forced to limit the number of new Medicare patients they can treat if the pay cuts continue as projected. Sixty-eight percent said they anticipate limiting the number of established Medicare patients, too.

These anticipated cuts in Medicare patient services could seriously jeopardize medical treatment to the nation’s senior citizens, many of whom rely on the Medicare program for medical needs.

Medicare payments to physicians have remained at the same level since 2001 while the average cost to practice medicine has grown by about 18% during that same period.

Physicians have until December 31 to decide whether or not they will participate in the Medicare program for 2008.

The Senate vote in favor of physicians is expected to pass in the House of Representatives as well as win the approval of President Bush. Bush recently vetoed for a second time a bill that would expand the State Children’s Health Insurance Program (SCHIP). The Senate voted to extend funding for this program through March 2009 as a part of the bill to raise Medicare physicians pay for the next six months.

Filed under: Medicare