Despite Senate action earlier this week to freeze next year's Medicare physician payments at 2005 levels, physicians will see -- at least temporarily -- a 4.4 percent Medicare reduction in January.
That's the word from CMS officials, who have said that until the House approves the Senate version of the Deficit Reduction Act of 2005, S. 1932 (at the Library of Congress' THOMAS Web site, type "S 1932 in the search box after selecting "Bill Number"), and the bill is signed by the president, CMS cannot prevent the pay reduction. The catch: The House has adjourned for the year and won't take up the bill until Jan. 31.
"Since congressional action is not final and the president has not signed a bill, CMS is obligated to impose the scheduled 4.4 percent reduction" announced earlier this year, said Kevin Burke, director of the AAFP Division of Government Relations.
"We will, of course, work for restoration of the funds lost" during the interim, Burke added. "But the fact is that the Medicare payment rate will be reduced by 4.4 percent on Jan. 1."
The reduction highlights the importance of Academy action, and "The AAFP will step up pressure on legislators to find a permanent solution to inequitable Medicare payments next year," according to AAFP President Larry Fields, M.D., of Ashland, Ky.
Fields' comment came on the heels of Senate action on the Deficit Reduction Act, which passed Dec. 21 by the narrowest of margins -- a 51-50 vote. Included in that bill is a freeze on Medicare payments to physicians at 2005 levels.
Fields commended the Senate's action. "However, next year, we will expect passage of Medicare payment reform that eliminates the sustainable growth rate formula in favor of a more reasonable measure that will lead to positive (Medicare payment) updates."
Each year, Congress must act to counter the impact of use of the SGR, which is linked to the country's economic growth and the volume of physicians' services, in the formula utilized to pay physicians. Earlier in the year, CMS had announced it would cut physician payments by 4.4 percent for 2006 and a total of 26 percent over the next five years. CMS has said in the past it has no authority to change the formula for physician payment; only Congress can do so.
The Senate version of the bill, which was approved by the House earlier in December, contains a few minor changes that require a second House vote.
"Normally, these minor changes would not alter the House's previous approval of the bill," said Burke. "However, there will be at least six weeks for opponents of the budget reconciliation bill to review its details and mount public relations campaigns against it. Given the 212-206 margin of approval in the House, it is not inconceivable that the outcome in the House could change."
The bill also cut about $4.8 billion from Medicaid funding over five years by allowing states to increase Medicaid copayments, institute premiums, limit benefits and tighten rules for assets transfer by patients attempting to qualify for Medicaid coverage of long-term care.
Without additional reforms, that combination amounts to less access to care for patients and a potential Medicaid pay cut for physicians, said Fields.
"The across-the-board eligibility cuts and increased copayments -- without other reforms -- will have a negative impact on our patients and our members," said Fields. "Patients can't afford the copays in the first place, so higher copays will worsen the problem. And our members cannot afford to spend money trying to collect copayments that aren't collectible."
Burke agreed. "The bill has copayments for all beneficiaries, no matter how poor they are," he said. "Doctors are not going to get money from the poor. The ones who will have to pay are the physicians" who can't collect the copayments.
The negative effects could be overcome by innovation on the state level, said Fields.
"If anything good is to come out of the budget cuts in Medicaid, it might be that states are forced to be more realistic about their programs and examine models … that are efficient, physician-friendly and patient-friendly," he said.
