ACP: Governmental Affairs and Public Policy - ACP Urges Representatives to Enact Legislation to Halt Medicare Physician Payment Cuts and Cosponsor H.R. 2356

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ACP Urges Representatives to Enact Legislation to Halt Medicare Physician Payment Cuts and Cosponsor H.R. 2356

July 15, 2005

The Honorable J. Dennis Hastert
Speaker
United States House of Representatives
H-232 Capitol Building
Washington, DC 20510

Dear Speaker Hastert:

On behalf of the undersigned national and state medical societies, we urge you to enact legislation to halt scheduled Medicare physician payment cuts for two years and provide an opportunity for Congress to design a payment system that appropriately reflects the costs of practicing medicine. We ask you to cosponsor H.R. 2356, the Preserving Patient Access to Physicians Act of 2005, introduced by Representatives Clay Shaw and Benjamin Cardin, which would achieve this result.

Medicare payments to physicians will be cut by 4.3% on January 1, 2006. This will be the first of a series of projected cuts from 2006 through 2011 that will reduce Medicare payments to physicians by 26%. The cuts’ impact is exacerbated because other public and private payers tie their rates to Medicare rates. According to a recent Congressional Research Service report, current Medicare physician payment rates are already below their 2001 levels.

Congress and the Administration have recognized the value of investing in physician services by averting past Medicare cuts and replacing them with positive updates. In multiple letters to Members of the House and Senate in September 2004, CMS Administrator McClellan stated that the Medicare Modernization Act (MMA), which provided for 1.5% positive increases for 2004 and 2005, improved access to high-quality care “by recognizing that Medicare beneficiaries cannot get such care without paying physicians appropriately.”

Without Congressional action, many physicians will be forced to limit services to seniors. A recent AMA survey concerning physician responses to significant Medicare pay cuts indicates that if these cuts begin January 1, 2006:

38% of physicians plan to decrease the number of new Medicare patients they accept;
34% of physicians serving rural areas will discontinue rural outreach services;
54% of physicians plan to defer the purchase of information technology; and
53% of physicians will be less likely to participate in Medicare Advantage.

The projected cuts result from the inherently flawed SGR payment update formula. The SGR, which is linked to the Gross Domestic Product, penalizes physicians and other practitioners by failing to reflect volume increases resulting from new coverage decisions and initiatives promoted by the Federal government. Only physicians are subject to arbitrary cuts due to factors beyond their control. Every other category of health care provider receives positive updates, based on a measure of inflation in their practice costs.

Enactment of a bill to replace the SGR with a new payment system that reflects the increases in medical practice costs is critical for ensuring continuity of vital medical care for seniors. H.R. 2356 would prevent a crisis in seniors’ access by permanently repealing the current SGR formula. For 2006, the bill would require no less than a 2.7 percent conversion factor increase. Beginning in 2007, the bill would implement a new system for determining the update, which would be based on input price increases for physicians’ services. These provisions are in accordance with recommendations of the Medicare Payment Advisory Commission (MedPAC).

We urge your help in adopting a fair payment system in line with that of other providers. Please cosponsor H.R. 2356 today and help preserve access for Medicare beneficiaries.

Sincerely,

American Academy of Child and Adolescent Psychiatry
American Academy of Dermatology Association
American Academy of Facial Plastic and Reconstructive Surgery
American Academy of Family Physicians
American Academy of Neurology
American Academy of Ophthalmology
American Academy of Otolaryngology-Head and Neck Surgery
American Academy of Pain Medicine
American Academy of Physical Medicine and Rehabilitation
American Academy of Sleep Medicine
American Association of Clinical Endocrinologists
American Association of Clinical Urologists
American Association of Hip and Knee Surgeons
American Association of Neurological Surgeons
American Association of Neuromuscular and Electrodiagnostic Medicine
American Association of Orthopaedic Surgeons
American College of Cardiology
American College of Chest Physicians
American College of Emergency Physicians
American College of Gastroenterology
American College of Nuclear Physicians
American College of Obstetricians and Gynecologists
American College of Osteopathic Surgeons
American College of Physicians
American College of Radiology Association
American College of Rheumatology
American College of Surgeons
American Gastroenterological Association
American Geriatrics Society
American Medical Association
American Medical Directors Association
American Medical Group Association
American Osteopathic Academy of Addiction Medicine
American Osteopathic Academy of Orthopedics
American Osteopathic Association
American Psychiatric Association
American Shoulder and Elbow Surgeons
American Society for Clinical Pathology
American Society for Gastrointestinal Endoscopy
American Society for Reproductive Medicine
American Society for Therapeutic Radiology and Oncology
American Society of Addiction Medicine
American Society of Anesthesiologists
American Society of Cataract and Refractive Surgery
American Society of Clinical Oncology
American Society of General Surgeons
American Society of Hematology
American Society of Nephrology
American Society of Plastic Surgeons
American Society of Transplant Surgeons
American Thoracic Society
American Urological Association
Association of American Medical Colleges
Child Neurology Society
College of American Pathologists
Congress of Neurological Surgeons
Heart Rhythm Society
Infectious Diseases Society of America
Joint Council of Allergy, Asthma and Immunology
Medical Group Management Association
National Association of Spine Specialists
National Medical Association
Renal Physicians Association
Society for Cardiovascular Angiography and Interventions
Society for Vascular Surgery
Society of Critical Care Medicine
Society of Hospital Medicine
Society of Interventional Radiology
Society of Nuclear Medicine
Society of Thoracic Surgeons
The Endocrine Society
Medical Association of the State of Alabama
Alaska State Medical Association
Arizona Medical Association
Arkansas Medical Society
California Medical Association
Colorado Medical Society
Connecticut State Medical Society
Medical Society of Delaware
Medical Society of the District of Columbia
Florida Medical Association
Medical Association of Georgia
Hawaii Medical Association
Idaho Medical Association
Illinois State Medical Society
Indiana State Medical Association
Iowa Medical Society
Kansas Medical Society
Kentucky Medical Association
Louisiana State Medical Society
Maine Medical Association
MedChi, the Maryland State Medical Society
Massachusetts Medical Society
Michigan State Medical Society
Minnesota Medical Association
Mississippi State Medical Association
Missouri State Medical Association
Montana Medical Association
Nebraska Medical Association
Nevada State Medical Association
Medical Society of New Jersey
New Hampshire Medical Society
New Mexico Medical Society
Medical Society of the State of New York
North Carolina Medical Society
North Dakota Medical Association
Ohio State Medical Association
Oklahoma State Medical Association
Oregon Medical Association
Pennsylvania Medical Society
Rhode Island Medical Society
South Carolina Medical Association
South Dakota State Medical Association
Tennessee Medical Association
Texas Medical Association
Utah Medical Association
Vermont Medical Society
Medical Society of Virginia
Washington State Medical Association
West Virginia State Medical Association
Wisconsin Medical Society
Wyoming Medical Society