AAFP Statement: Family Physicians Assess Medicare Legislation

Statement attributable to:
James C. Martin, M.D., FAAFP
President, AAFP

WASHINGTON — “Passing Medicare reform legislation is one of the most important actions that Congress could take this year. It would provide an essential improvement in the Medicare coverage America’s seniors require and should have.

“There have been far too many cases of seniors on tight budgets splitting their pills to make them last longer, buying one prescription but not another, or foregoing prescribed medications altogether. This should not happen in one of the most prosperous countries in the world, and this week Congress moved our country much closer to more realistic health care coverage for our senior citizens.

“The AAFP supports adding a prescription drug benefit to the Medicare program because of the well-documented evidence that prescription drugs play a greater role in patients’ health and well-being than they did in the 1960s, when the federal Medicare program was created. This benefit is necessary to ensure Americans have appropriate health care. Like the AAFP’s plan for health care coverage for all, the Medicare reform legislation provides a basic level of coverage for prescription drugs, and coverage in the case of very high medication costs. We count on the insurance companies to do their part and develop reasonable options for coverage for Medicare beneficiaries to cover the gaps.

“We thank the House of Representatives for providing a temporary reprieve from the flawed annual update formula to the Medicare physician fee schedule. This gives everyone much needed time to develop a workable substitute. The recent cuts in the schedule have forced too many of my colleagues to see fewer Medicare patients or close their practices altogether. This is a terrible choice to have to make, one that could force Medicare patients to travel further distances for care, pay more out of pocket or completely lose access to care. We will be working hard to find a solution and to help Congress approve it.

“Both chambers of Congress took steps to make Medicare’s payment system fairer to physicians in underserved areas. Many rural communities have great difficulty attracting and retaining physicians and other skilled health professionals.

“Two reimbursement features negatively affect Medicare payment to physicians in rural and underserved areas.

“First, the formulas used by the Medicare program to reimburse physicians do not accurately measure the cost of treatment for Medicare beneficiaries. The AAFP believes adjustments in the Medicare fee schedule should only exist when they are designed to achieve specific policy goals, such as encouraging physicians to practice in underserved areas. The AAFP support the Senate version, S. 1.

“Second, the Medicare Incentive Payment Program (MIPP) is intended to attract primary care physicians to rural and underserved areas by offering a 10-percent reimbursement bonus on health care services provided under Medicare. A 1999 General Accounting Office (GAO) study found that rural primary care physicians are rarely accessing the 10-percent bonuses in federally designated shortage areas. This is due to a number of obstacles the law creates for providers who wish to take advantage of the bonus. The Senate-passed version of the Medicare reform legislation makes the reimbursement bonus automatic.

“The Senate Medicare reform bill contains a provision that requires the development of standards for electronic prescribing. This is a positive step toward standardizing electronic transactions in healthcare. However, the AAFP is troubled by a provision contained in the House bill requiring electronic prescribing of medications by 2006. Such a timetable is unrealistic for family physicians, most of whom practice in groups of three or fewer. Moreover, 28 percent of our members practice in rural areas. The AAFP is concerned that a mandate with a deadline for compliance of 2006 could create an unrealistic technological and financial requirement for these small businesses.