CMA Physicians Mount Grassroots Effort to Halt 26% Medicare Cut

[CAL/AAEM News Service]

CMA Physicians Mount Grassroots Effort to Halt 26% Medicare Cut 

Source: CMA Alert (http://www.calphys.org/html/alert081805.asp?anchorID#1) 
Date: August, 18, 2005


Medicare rate cuts scheduled to begin in 2006 will make it more difficult for seniors to
find a physician and further jeopardize access to care for older Californians, according
to CMA’s recent Medicare survey. CMA physicians throughout the state have been carrying
that message to their federal lawmakers as they meet with U.S. Senators and
Representatives in their home districts during Congress’s summer recess.

If Congress doesn’t act now to fix the Medicare payment formula, payment rates to
physicians will begin to nosedive 4 to 5 percent a year in January, plummeting 26 to 30
percent in real dollars by 2012. Physician practice costs are expected during that same
time period to rise 15 percent, according to MedPAC, the independent commission
established by Congress to advise on Medicare payment issues.

The physician payment cuts are an unintended consequence of a Medicare formula created by
Congress that was supposed to establish a “sustainable growth rate” (SGR) for spending on
physician services. The formula allows Medicare spending on physician services to grow at
the rate of the gross domestic product (GDP), but it actually penalizes physicians
because the cost of physician services rises more rapidly than the GDP.

CMA in May surveyed California physicians and found that 60 percent of physicians will no
longer accept new Medicare patients, and 40 percent would be forced to stop treating
Medicare patients completely, if Congress fails to replace the Medicare SGR formula.
Though the question was not asked in the survey, 10 percent of the 490 physicians
responding to the survey wrote in that they would quit practicing medicine altogether,
citing rising costs and decreasing Medicare reimbursements. Another third said they would
be forced to reduce the time spent with Medicare patients.

“The Medicare program is in crisis,” said CMA President Michael Sexton, M.D. “Medicare
payments to physicians aren’t keeping pace with the cost of providing care, and
physicians who want to continue to treat Medicare patients cannot afford these cuts.” 

The House and Senate are considering separate bills—both called the Preserving Patient
Access to Physicians Act of 2005—that would provide a physician payment increase for 2006
of at least 2.7 percent, as recommended by MedPAC. The Senate bill (S 1081) would also
provide an estimated 2.6 percent increase in 2007. 

The House bill (HR 2356) would provide a permanent fix to the Medicare payment formula,
calculating physician rates in 2007 and beyond with a new formula based on the Medicare
Economic Index (which measures physician practice cost inflation).

CMA urges physicians to join with CMA and medical societies across the nation in pushing
for federal legislation that would stop the cuts and replace the current payment formula
with calculations based on the true costs of providing medical care, as is already done
for hospitals, nursing homes, and home care services.

Go to http://www.calphys.org/html/bb959.asp for more information, including talking
points and a “Save Medicare” poster to display in your office or hospital.

Contact: CMA Government Relations, 916/444-5532 or leginfo at cmanet.org.



Cyrus Shahpar & Brian Potts 
Managing Editors, CAL/AAEM News Service
University of California, Irvine

The CAL/AAEM Archives are available at: http://maillists.uci.edu/mailman/public/calaaem/


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