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AMA warns of 'catastrophe' if Medicare pay cuts not repealed

by Brendon Nafziger, DOTmed News Associate Editor | November 01, 2010
The country's biggest doctor lobby is warning of a "catastrophe" if Congress fails to reverse 30 percent cuts to Medicare payments to doctors due at the end of the year.

American Medical Association president Dr. Cecil B. Wilson is pressing Congress to pass a 13-month freeze on the cuts during its lame-duck session, which starts Nov. 15, to give the lobby time to work with Congress on a permanent solution to the cuts next year.

Doctors will see cuts in their Medicare payments of 23 percent on Dec. 1 and an additional 6.5 percent on Jan. 1. The cuts come from the sustainable growth rate formula, legislation passed during a late 1990s burst of congressional frugality that aims to tie Medicare funding increases to the overall growth of the economy.

The cuts are routinely frozen by Congress, although lawmakers have yet to finally repeal the SGR formula. According to Congressional Budget Office estimates cited by Kaiser Health News, a one-year freeze would cost about $15 billion, but a 10-year fix would run about $276 billion.

But if Congress fails to overturn the cuts this time, doctors could reconsider taking in new Medicare patients or change how they participate with the program, Wilson warned in an interview with Kaiser Health News.

"What we're saying to them and what we want seniors to say to them is, 'You're threatening our access to care. If physicians cannot keep their doors open because Medicare now only pays about half the direct cost of running a practice, then we're going to lose access to care,'" Wilson told Kaiser.