May 21, 2010

Early next week the U.S. House of Representatives is expected to vote on an extension of the current rate of Medicare payments to doctors and the Senate would get the bill later in the week.

Without the extension Medicare payments are due to be cut by 21 percent as of June 1 this year. H.R. 4213, would avoid those rate cuts for three and a half years. The proposed legislation would allow for a 1.3 percent increase in Medicare payments on June 1, 2010; a 1 percent increase on Jan. 1, 2011 and from 2012 to 2013 annual rates could not be cut. After 2013 determination of the payments would go back to the Sustainable Growth Rate (SGR) formula. Congress implemented SGR in 1997 to reduce the growth of healthcare costs by reducing Medicare payments whenever doctors’ costs grew faster than the economy. Despite this formula, Congress has continually stepped in to delay cuts in Medicare.

The California Medical Association (CMA) is supportive of the deal, said CMA spokesman Andrew LaMar. “We’d like to have this resolved once and for all, but a reprieve for three years is better than having a 21 percent cut in June,” he said.

While the American Medical Association (AMA) acknowledged the temporary relief of Congress’ proposal, the organization is still unsatisfied with the latest deal.

“The AMA is deeply disappointed that Congress will once again fail to permanently correct the Medicare physician payment formula that Republican and Democrat members of Congress, President Obama and policy experts have said should be repealed," stated J. James Rohack, MD and President of the AMA, in a press release.

The AMA contends that Congress could have solved the dilemma five years ago at a cost of $49 billion and now it says the short-term solution being considered by Congress will add up to more than that.

Medicare cuts of 21 percent would put some physicians out of business, LaMar said. A Humboldt Co. practice that treats Medicare patients almost exclusively said it would not be able to make payroll 30 days after such a cut.

And with both Medicare and Medi-Cal facing huge increases in the future due to more seniors as the result of the baby boomer generation and more people able to get medical care under healthcare reform, the medical profession not only needs to hold the line, it needs to expand, LaMar said.