Monday, December 11, 2006

Medicare Physicians' Fee Cuts Forestalled

The Bloomberg news service reported on December 9, 2006, in an article entitled "Congress Approves Tax, Trade Benefit, Blocks Fee Cut", about compromise federal legislation adopted around 2:00 am on Saturday morning that, among other matters, forestalls the 5% cut in physician fees scheduled to take effect for the Medicare program on January 1, 2007:
[L]egislation passed in the waning hours of the Republican-controlled Congress, will prevent a cut in Medicare fees paid to doctors. It was one of the last measures, aside from a resolution to continue funding the federal government at current levels until next year, to be enacted by Republicans in their 12 years of controlling the legislative branch.
Previously, on November 1, 2006, the Centers for Medicare & Medicaid Services (CMS) had issued a Press Release, entitled "Medicare Announces Final Rule Setting Physician Payment Rates and Policies for 2007: New Payment Rates Will Encourage Increased Physician/Patient Communication". In an extremely detailed & lengthy advisory about its "final" rulemaking provisions, CMS first announced:
Starting next year, the Medicare program will pay physicians more for the time they spend talking with Medicare beneficiaries about their health care and will pay for a broader range of preventive services. The changes, which will become effective January 1, 2007, are included in the Medicare Physician Fee Schedule (MPFS) final rule released today by the Centers for Medicare & Medicaid Services (CMS).
U.S. Newswire posted a release, dated December 9, 2006, supplied to it by the American Medical Association captioned "AMA: Last-Minute Congressional Action Stops Medicare Physician Payment Cut That Would Have Threatened Seniors Access to Care". The release noted that "nearly one million patients and physicians contacted Congress urging action". In the release, Cecil Wilson, M.D., AMA Board Chair, commented on the last-minute congressional action to stop Medicare physician payment cuts, and outlined the remaining issues according to the AMA.

His comments echo the presentation of such issues on a special Medicare web page of the AMA, entitled "
Medicare physician payment reform and regulatory relief". On another web page, entitled "National legislative activities -- Medicare", updated October 12, 2006, the AMA urged its members to lobby Congress on the highlighted issues:
If Congress fails to act, Medicare will cut physician payments by about 5 percent on Jan. 1, 2007, with cuts totaling nearly 40 percent through 2015. And while physician payments plummet, practice costs during the same period are expected to increase over 20 percent.

Clearly, the Medicare physician payment update system needs to be reformed. If it is not, Medicare payment rates in 2007 will have fallen 20 percent below increases in physicians’ costs since 2001. These cuts make no sense as millions of Baby Boomers begin to retire.

Physician payment updates are driven by a flawed formula called the Sustainable Growth Rate, or SGR. Instead of the SGR, payment updates should be based on annual increases in practice costs, as recommended by the Medicare Payment Advisory Commission.

Other Medicare providers are not subject to the SGR. In fact, hospital payments are slated to continue to rise by more than 3 percent a year under current law and payments to Medicare Advantage plans are estimated to increase by 7.1 percent in 2007.

For examples of some primary-care physicians' candid reactions to the current Medicare fee situation, see various comments posted by doctors on a Medical Weblog "Kevin, M.D.", found here.

When it comes to the wee-hours' action just taken by Congress, and the larger, looming U.S. Medicare & Medicaid reform issues, I recall three sayings -- among the many "Yogiisms" attributed to Yogi Berra -- that ring true:

UPDATE ON 12/15/06:

In its "Daily Health Policy Report" on December 14, 2006,
The Henry J. Kaiser Family Foundation posted a brief update about the federal legislation, entitled "Many Physician Groups Have Not Endorsed Recently Approved Legislation That Would Delay Cuts to Medicare Doctor Fees, Establish Pay-for-Performance System". The posting begins:
Congress late last week approved a large tax, trade and health care bill (HR 6111) that would maintain the current level of Medicare physician reimbursements for 2007 and provide a 1.5% increase in reimbursements to physicians who agree to report data on certain quality-of-care measures "with scant last-minute help from the physicians' lobby," which offered only "tepid support" for the legislation, The Hill reports.
The article referenced by the Kaiser posting, entitled "Physician groups content, but not ecstatic on payment fix", b, dated December 13, 2006, is found here.

Clearly, "
it ain't over".