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Medicare Physician Fee Cuts Threaten Patient Access to Care, New ACP Analysis Shows Adverse Effect on Physician Practices

(Washington, DC): The Medicare physician fee cut projected for 2004 and beyond would penalize geriatricians and other physicians who see large numbers of the elderly, according to a new analysis prepared by the American College of Physicians (ACP).

Under current law, the overall decline in Medicare revenue to a typical four-physician general internal medicine practice would be $14,142.78 over the next two years. An ACP survey conducted in 2002 showed that 42 percent of respondents indicated such a drop could force their practices to no longer accept Medicare patients. Even worse, the analysis shows that the more Medicare patients a doctor sees, the more they lose: the average revenue loss over a two-year period would increase to over $54,000.00 for a four person geriatrics practice that sees only Medicare patients.

ACP is urging Congress to enact a provision in the Medicare Prescription Drug and Modernization Act, H.R. 1, passed by the House of Representatives on June 27, 2003, that would provide an update of at least 1.5 percent annually over the next two years. The House bill would lead to a modest increase of $7,278.84 in Medicare revenue over the next two years for the same four-physician practice.

"Current Medicare policies target the doctors who see the most Medicare patients for the deepest reimbursement cuts, while doctors who limit how many Medicare patients they see will experience smaller losses" said ACP President Munsey S. Wheby, MD. "A Medicare prescription drug benefit will be a hollow promise to America's seniors if there simply aren't enough doctors left around to take care of them."

The College based its analysis on projected cuts in physician fees over the next 2 years. Under current law, physician fees will be cut 4.2 percent in 2004 and a projected 1.7 percent in 2005. Medicare bases changes in physician reimbursement on a sustained growth rate (SGR) formula that ties updates in physician reimbursements to growth in the general economy. ACP has pointed out that this is a fatally flawed methodology, since the costs of supplies and services in the health sector grow much faster than costs in the overall economy.

A full copy of the ACP's analysis is available online.

The American College of Physicians is the largest medical specialty organization and the second-largest physician group in the United States. ACP members include more than 115,000 internal medicine physicians (internists), related subspecialists, and medical students.

Jack Pope, 202-261-4556 jpope@acponline.org

Page updated: 11-03-03

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