Medicare physician pay cut stalled until June 1

May 15, 2010

The American Academy of Ophthalmology and the American Society of Cataract and Refractive Surgery are among 25 groups urging Congress to solve the Medicare physician payment problem.

Washington, DC-The American Academy of Ophthalmology (AAO) and the American Society of Cataract and Refractive Surgery (ASCRS) are among 25 medical specialty advocacy groups urging the House of Representatives to solve the Medicare physician payment problem.

The groups say they not only want to stop payment cuts that have risen to 23.3% now scheduled to take effect June 1, after a mid-April vote that again delayed the cut that was to have taken place Jan. 1.

They also said physicians urgently need economic stability provided through increases in their Medicare reimbursement.

The letter expresses the physicians' frustration with a system that cut payments to physicians 5.4% in 2002 and took until 2009 to restore payment rates to 2001 levels.

"The uncertainty of possible cuts, along with stagnant payments that have failed to keep pace with the rising costs of running a medical practice undermine the ability of physicians to plan for the future, to provide for their employees, and to make technological investments that could better help them serve their patients," it continues.

The sentiments were expressed as part of the groups' continuing efforts to fight the effects of the legislated sustainable growth rate (SGR) formula, which calls for cuts to physicians if Medicare costs exceed certain targets. Physician groups argue that the cost increases were out of their control and they are being unfairly penalized.

Nancey McCann, ASCRS director of government relations, said Republicans and Democrats agree that the SGR must be eliminated, but there is little agreement on how to go about that.

The Congressional Budget Office has estimated that eliminating the SGR would cost more than $275.8 billion, McCann said. "Everybody recognizes the formula doesn't work. The problem is how you pay for it," she said.

At the same time legislators are trying to find a solution, they also are debating two longer-term options to avoid the pay cut the SGR requires. Those options include a 3- to 5-year freeze on physician payments, or a 10-year "fix" that could permanently repeal the controversial SGR.

A third, albeit short-term, option is a short-term freeze as part of an "extenders bill," which could postpone the cut until September, said William L. Rich III, MD, medical director of health policy, AAO.

Under one proposal, legislators would pay for a 5-year freeze by requiring a 32% pay cut in 2015, boosting the cost to eliminate the SGR to $500 billion, McCann said. Another proposal calls for sidestepping "pay-as-you-go" rules and adding the cost to the national debt.