Medical groups do not support Medicare fix

June 1, 2010

As yet another deadline challenges Congress to avert a 21.3% pay cut to physicians who treat Medicare and Medicaid patients, groups representing the nation's physicians say they do not support a proposal that fails to change the formula behind the cut.

Washington, DC-As yet another deadline challenges Congress to avert a 21.3% pay cut to physicians who treat Medicare and Medicaid patients, groups representing the nation's physicians say they do not support a proposal that fails to change the formula behind the cut.

Physicians are slated to receive the massive pay cut beginning June 1 after it was postponed three times since December. In late May, however, leaders in the House and Senate were working to prevent the cut with a plan that would give physicians increases of 1.3% for the remainder of 2010 and 1% in 2011, followed by a 3-year funding formula that puts primary-care visits in one "bucket" with its own spending allocation and everything else in a second.

Each bucket carries its own expenditure target, with primary-care and preventive-services physicians, who would receive an additional raise equal to the gross domestic product (GDP) plus 2% in one bucket, and all other physicians in the other bucket, receiving a raise of GDP plus 1%.

Although the proposal seemed to have merit initially, most medical organizations-including the American Society of Cataract and Refractive Surgery (ASCRS), the American Academy of Ophthalmology (AAO), and the American Medical Association (AMA)-say they cannot support it.

Their primary objection is that it fails to eliminate the sustainable growth rate (SGR) formula that dictated the cut to Medicare and Medicaid providers in the first place and would install a 37% cut in 2015, at the end of this proposal.

"We're opposed to it because it is not fixing the problem," said Brock K. Bakewell, MD, chairman, government relations committee for ASCRS. "You need to fix the SGR. The SGR is just a flawed [formula] that does not work. You need to attach the real costs of practicing medicine to Medicare reimbursement."

Although some evaluation and management codes used by ophthalmologists might be in the preferred primary-care "bucket," surgical and other codes would be in the other, he said.

"The whole problem with this is we're looking at a 37% cut in 2015, and that is totally untenable," Dr. Bakewell said.

He said his Tucson, AZ, practice's fees for cataract services have dropped more than 80% over the past 20 years after accounting for inflation, due to cuts in Medicare payments.

To some, the proposal seemed initially tolerable because it offered a pay raise instead of a cut and a 5-year solution to bide time while Congress searched for a longer-term answer to the dilemma. However, primary-care physicians-who would benefit the most-are the only segment of organized medicine that supports this proposal, Dr. Bakewell said.

The AAO's Cathy G. Cohen, vice president of governmental affairs, said the SGR wreaks havoc on practices' ability to function effectively.

"While the academy continues the push for a permanent repeal of the SGR, we also understand the political realities ophthalmologists face and their need for positive, stable updates to operate their practices in the short term," she said. "Positive updates are critical to continued patient access to physicians. The instability of the recurring 30-day cycle, where Congress steps in later and later to halt the 21.3% SGR cut, must end now."

AMA President J. James Rohack, MD, said he is "deeply disappointed" by Congress's failure to provide a permanent correction to the payment issue. Had Congress permanently solved the problem 5 years ago, it would have cost $49 billion, not the $275 billion the Congressional Budget Office estimates it would cost today. The cost jumps to $513 billion in 5 years.

"The pending Medicare proposal treats the symptoms-it's not a cure for the disease," he said in a May 20 statement. Dr. Bakewell said Congress has taken advantage of physicians' good will by threatening pay cuts and allowing this turbulence to continue year after year.

"The only reason the whole health system has not imploded is because of the sheer altruism of the doctors," Dr. Bakewell said. "But we've reached the bottom line. We can't keep giving our services away."