CHICAGO -- AMA doctors spoke with one voice at the organization's annual meeting in Chicago June 27, 2007, calling on Congress to stop Medicare physician payment cuts and instead update payments in line with practice cost increases. Next year, Congress plans to cut Medicare physician payments by 10 percent, placing seniors' access to health care at risk.

"The AMA is vigorously advocating for congressional action to stop Medicare cuts, and this action is a clear call to pursue legislation that provides for at least two years of payment updates that reflect increases in the costs of caring for seniors," said AMA Board Member William Hazel, MD. "We are also calling on Congress to enact legislation that lays the groundwork for complete repeal of the fatally flawed Medicare physician payment system."

"The current Medicare physician payment system is broken beyond repair," said Dr. Hazel. "It relies on a formula tied to the ups and downs of the economy, not the health care needs of America's seniors."

"A full sixty percent of America's physicians say next year's 10 percent payment cut will force them to limit the number of new Medicare patients they can care for," said Dr. Hazel. "The government projects nine years of Medicare cuts totaling about 40 percent, while at the same time practice costs increase 20 percent. As the baby boomers begin to age into Medicare during the life of the cuts, we're concerned there won't be enough physicians able to care for all the new Medicare patients."

At the same time that the government plans to cut Medicare payments to physicians, it is increasing payments to private health plans administering Medicare Advantage. The government now pays Medicare Advantage plans on average 12 percent more than it spends on patients enrolled in traditional Medicare. The AMA strongly believes that this government subsidy must be eliminated, and policy passed today reinforces the AMA's advocacy for fiscal neutrality between private Medicare plans and traditional Medicare.

"Physicians are outraged that on one hand the government is putting seniors health care at risk by slashing Medicare payments to doctors, and on the other hand paying hefty subsidies to the insurance industry," said Dr. Hazel. "AMA doctors spoke loud and clear that this $65 billion insurance industry subsidy must end - and the savings should be used to stop Medicare cuts to doctors caring for America's seniors."

AMA Board Member Concerned With New Medicare Payment Rule

Statement attributable to:
Cecil B. Wilson, MD
AMA Board Member
July 2, 2007


"Today's release of the proposed 2008 Medicare physician payment rule serves as yet another reminder of the need for congressional action to stop scheduled payment cuts to physicians. Next year alone, Medicare will cut payments to physicians by 10 percent. Over nine years the cuts swell to 40 percent, while medical practice costs increase 20 percent. The numbers just don't add up.

"Last year, Congress set aside $1.35 billion that could be used to reduce the scheduled 2008 pay cut. The AMA and 85 other physician and health professional organizations sent a letter strongly urging the Administration to use this money to help Medicare physician payments keep pace with increases in practice costs. The Medicare Payment Advisory Commission (MedPAC) made a similar recommendation. In today's rule, CMS has chosen to spend all of the money to provide just 1.5 percent to 2 percent to physicians who report on certain quality measures.

"The AMA is extremely disappointed in this short-sighted decision. Today, Medicare pays doctors the same as it did in 2001. More than 60 percent of doctors say they will be forced to limit the number of new Medicare patients they can treat when the cut goes through. Seniors' access to health care is in jeopardy."