Academy Undertakes Advocacy Efforts to Stop Medicare Payment Cuts

The AAFP has launched an all-out effort to convince Congress to support an increase in Medicare physician payment rates for the next two years.

On Sept. 6, AAFP President Rick Kellerman, M.D., of Wichita, Kan., met with staff members from the offices of three senators on the Senate Finance Committee and urged them to support a two-year physician payment increase. The staff members were from the office of committee Chairman Sen. Max Baucus, D-Mont., as well as from the offices of committee members Sen. Jon Kyl, R-Ariz., and Sen. Pat Roberts, R-Kan.

"There is a growing understanding that primary care physicians and family physicians in particular are being undervalued in the current system, and that is having an adverse effect on access and quality of care and medical student specialty choice," said Kellerman, commenting on the Capitol Hill meetings. "There was also general agreement that we need to push for a two-year positive physician payment update."

If enacted, the increase would negate a 15 percent reduction scheduled to take place in the next two years under the Medicare Physician Fee Schedule, which is based on the sustainable growth rate, or SGR, formula. The House passed an $80 billion bill to reauthorize the State Children's Health Insurance Program, or SCHIP, in early August that includes a 0.5 percent increase in Medicare physician payments in both 2008 and 2009.

Meanwhile, the Senate passed a $35 billion SCHIP bill that does not contain any amendments beyond SCHIP reauthorization. For example, it does not address Medicare payment issues or provide an increase in Medicare physician payments. Unlike the House bill, the Senate legislation passed by a veto-proof margin, giving the Senate version an edge as House and Senate conferees work out a final SCHIP bill. As a result, the AAFP is concentrating its efforts on the Senate, trying to convince senators to adopt the multi-year physician payment increase contained in the House SCHIP legislation.

"Every year since 2003, Congress has had to find ways to pay for a Medicare update that would forestall a significant decrease in the payment rate," said AAFP Board Chair Larry Fields, M.D., of Flatwoods, Ky., in a Sept. 5 letter (2-page PDF; About PDFs) to Senate Majority Leader Harry Reid, D-Nev. "Family physicians appreciate the consistent intent of Congress to avoid these sizeable reductions."

However, even with congressional intervention, current physician Medicare payments stand at 2001 levels, Fields said in the letter. Without congressional action this year, physicians will suffer a 9.9 percent reduction under Medicare in 2008 and a 5 percent cut in 2009, resulting in "beneficiary access problems," Fields said.

"Thus, even with the last-minute congressional actions and the temporary reprieves that they have provided, it is clear that the underlying formula is unworkable and needs revision," said Fields. "That is why a multi-year positive update is so important. It would provide Congress some time to address the flawed (SGR) formula."

Congress has about 10 legislative days left before the end of the current fiscal year, making SCHIP reauthorization the most "logical" and expedient way of providing an increase in physician payment, said Kevin Burke, director of government relations for the AAFP.

"SCHIP is a clear vehicle," said Burke, adding that Congress does not have to provide a payment increase as part of a final SCHIP bill to prevent the payment reductions. Congress could, for example, pass a separate bill to address the scheduled reductions or it could attach a payment fix onto an appropriations bill. The AAFP is pushing for a multi-year payment increase, not a single-year increase, which could be a problem if a positive physician update is included in an appropriations bill. Appropriations bills are only supposed to last for one year.

"My concern is Congress will end up with a rush at the end of the congressional session in December and will tack a one-year payment fix onto a must-pass appropriations bill," said Burke. "That would be disappointing, but it would be more disappointing for Congress not to handle this at all."

The AAFP, meanwhile, has sent out a "Dear Colleague" letter signed by Kellerman to members of the Academy, asking them to contact their senators to support the Medicare payment increase as part of the SCHIP legislation.

"Physicians must urge the Senate not to wait until the end of 2007 to adjust the Medicare payment rate for a single year," Kellerman said in the letter. "These end of the year, patched-together measures are disruptive, and they undermine the confidence of physicians and patients in the Medicare program."

The AAFP also has sent a key contact alert asking each of its 96 key contacts for the Senate to call their senators asking for inclusion of the payment increase in the SCHIP legislation. In addition, the Academy has issued a Speak Out reminding key contacts and members to contact their senators.

In the meantime, the Academy has provided each AAFP chapter with a brief opinion piece on the impact of the scheduled Medicare cuts that can be adapted and sent to local newspapers or incorporated into AFP chapter newsletters.