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Medicare Cuts Threaten Access to Care

Decrease in payments will affect services to beneficiaries

(Washington, DC): The "Medicare Physician Payment Fairness Act of 2001," (S. 1660) introduced in the Senate on November 8, 2001 by Senators Jim Jeffords and John Breaux, would replace a 5.4 percent reduction in Medicare payments to physicians in 2002 with a 0.9 percent reduction. The extensive 5.4 percent cut, if left to stand, will require physicians to cut back on the resources they need to care for patients, according to the American College of Physicians-American Society on Internal Medicine (ACP-ASIM).

"The Medicare program is covering new treatments, providing new preventive services, and caring for more patients," said William J. Hall, MD, president of ACP-ASIM. "These services cannot be funded by asking physicians to stretch limited resources even further."

Internists, who provide care for more Medicare patients than any other medical specialists, are concerned about the continued drain of resources from the health care profession during a time of increased need for services by patients.

"Since 1991, Medicare payments to physicians have lagged behind the rise in medical practice inflation in most years. Now physicians are required to cut more than five percent from the cost of providing care," stated Dr. Hall. "Physicians are on the front lines responding to their patients' health needs and each year they must do it with fewer resources."

At the crux of the problem is a complex formula for updating Medicare physician fee schedule payments that is based on a Sustainable Growth Rate (SGR) linked not to the cost of providing the services but to the performance of the overall economy. Physician services are the only category of Medicare covered services that are subjected to this formula.

Since the introduction of the SGR-based formula, ACP-ASIM has warned that large shifts in Medicare reimbursements from year to year would have negative impacts on physicians. The Medicare Payment Review Commission (MedPAC) has warned that cuts of this magnitude next year could, "raise concerns about the adequacy of payments and beneficiary access to care," and has called for the elimination of the update formula.

ACP-ASIM is the nation's largest medical specialty organization and the second largest physician group. Membership encompasses more than 115,000 internal medicine physicians and medical students.


Jack Pope, Washington Office, (202) 261-4556
Jennifer Whalen, Washington Office, (202) 261-4575

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