Medicare fee cut threatened again; AMA to fight for balance billing


In what has become an annual ritual, Medicare announces a cut in physicians’ fees, and physicians threaten that patients will lose access to care. And this time they really mean it.

An average 10.1% fee cut was slated to take effect on Jan 1, 2008. Two-thirds of the doctors in Sarasota County said they would stop accepting new Medicare patients if federal payments don’t improve.

For the first time in either group’s memory, the AMA and the American Association of Retired Persons (AARP) are working together to lobby Congress on this issue.

Legislation crafted by the Senate Finance Committee, which postponed the scheduled cuts by 6 months and extended SCHIP funding until March 2009, was approved on a voice vote. (Kevin Freking, AP 12/18/07)

“They keep kicking the can down the highway without fixing the real problem,” said AMA board chairman Edward Langston, M.D. (David Gulliver, Sarasota Herald Tribune 12/4/07).

As House and Senate considered a measure to delay Medicare cuts until June, Rep. Pete Stark (D-CA) said, “To push the problems ahead six months is insane.” Senator Jon Kyl (R-AZ) “This kicks the can down the road. That’s going to be tougher next year. There’s a geometric progression which makes it worse each year.”

Congress would “pay for” the measure by trimming $1.5 billion from a fund established for certain insurers that entered underserved regions and by freezing payments for inpatient rehabilitation and prescription drugs provided by physicians under Medicare Part B. The AARP was unhappy that Congress did not cut payments to Medicare managed-care plans.

In response to pressure from delegates at the interim meeting of the AMA, the AMA has said it will “renew [the] fight for Medicare balance billing” —an action that AARP does not support.

The policy adopted by the House of Delegates directs the AMA to “devote its political and financial resources to initiate a measure at the appropriate time that would allow Medicare balance billing” ( 12/3/07). The resolution did not pass without dissent. Some delegates say the new policy “may draw critics who say physicians are too concerned about money.” Also, “a major push for balance billing would alienate seniors and distract Congress from working on the sustainable growth rate.”

As usual, a reprieve from a pay cut is expected to come at a price. The Pharmaceutical Care Management Assn. is pushing to include an e-prescribing mandate in legislation postponing the fee cut. PCMA is running ads that say “While you wait, thousands die each year” [from lack of e-prescribing] (David Glendinning, 11/26/07).

It is claimed that electronic health records would help curb rising costs and hence help offset the cost of a physician pay increase. And who would pay for the EHR?

Health and Human Services Secretary Michael Leavitt said, “In my view, any new bill should require physicians to implement health [IT] that meets department standards in order to be eligible for higher payments from Medicare.” For the moment, this proposal was not enacted.

Only 10% of physicians in solo or small group practices use EHR systems, which can cost $20,000 to $40,000 to implement (iHealthBeat 12/4/07).

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  1. This is an annual affront, but an even more devestating but little recognized affront is the increasing number of physicians who are being arbitrarily subjected to Prepayment Review, which can effectively halt nearly all Medicare payments indefinitely, as subcontractors clumsily intervene in the payment process. An eminent “legal eagle” of national renown on the subject of Medicare policy and regulation, Alice Gosfield, notes that physicians have essentially no rights to challenge this process, except to remind the subcontractors that they are not following published guidelines to notify physicians of the reason for the review, and its expected duration. The only viable choice is for the physician to have others assume the care of his Medicare patients, a process of transfer that published studies show drives up the cost of care, and of course interferes with the patient’s right to the provider of their choice.
    This is truly a cause that should galvanize immediate nationwide physician action if national physician representative leaders were aware of the problem and its extent. It is likely that the true details of how these subcontractors are incentivized, and how ineptly these reviews are conducted will spur more national unity of physician response, and give immense “street cred” to the first physician organiztion that champions it.

  2. Jesus, you mean the AMA is actually growing some balls and understands the need for confrontational negotiating….amazing!!! (But will it last?)

  3. In my opinion, the only solution is balanced billing. Medicare patients can choose who they wish to see and make their own decisions. It is a violation of FTC policy to take advantage of the fact that Medicare controls approximately 65% of most of our practices. Private physicians should be able to decide how they charge and medicare should be able to go to the doctor of their choice.