Senate Fails to Block Deep Cuts in Medicare Payments

The Senate has failed to pass a short-term payment patch for the Medicare physician payment rate, thus allowing a 21.2 percent payment cut to take effect on March 1 based on the sustainable growth rate, or SGR, formula. But the reduction is not expected to have an immediate effect on physician payments.

According to an e-mail from CMS to the AAFP, the agency has instructed its contractors to hold Medicare claims for the first 10 business days in March. This would postpone the immediate effect of the 21.2 percent cut and give Congress more time to pass a payment patch reversing the reduction. By law, CMS cannot pay a Medicare claim until 14 days after receiving the claim.

"Theoretically, (the reduction) should not have any impact on physician claims at this point, and physicians should still get paid on time," said Kent Moore, manager of health care financing and delivery systems for the AAFP. "This just means Medicare contractors will have a smaller window in which to process the claims."

Physicians may submit their Medicare claims as usual, Moore said, but he added that if Congress fails to act within the 10-day period, the cut probably will impact physician Medicare payment rates.

Congress passed a measure last December postponing the 21.2 percent cut called for by the SGR formula until March 1. The House then passed a bill on Feb. 18 providing a temporary payment patch until March 31, but the Senate was unable to approve the measure before adjourning for the weekend on Feb. 26, thus allowing the cut to go through.

"The AAFP is deeply angered at congressional failure to avert the mandated 21.2 percent Medicare physician pay cut," said AAFP President Lori Heim, M.D., of Vass., N.C., in a prepared statement. "This inaction -- in the face of virtually universal calls by the medical community and advocates for Medicare beneficiaries -- has put elderly and disabled patients at risk of losing access to care and imposed potentially devastating fiscal hardship on physicians.

"America's family physicians are already straining to make ends meet with Medicare payment rates that have fallen behind inflation," said Heim. "Now they are in a situation in which they must decide between seeing Medicare beneficiaries or putting their medical practices at serious financial risk."

Nearly one in four patients seen by family physicians is a Medicare beneficiary, according to Heim.

"Many of our members, especially in rural and medically underserved areas, are in small practices that have no margin to cover even a temporary reduction of this magnitude," she said. "The 21.2 percent reduction in Medicare payment will cripple family physicians' ability to continue caring for this vulnerable group of Americans."

The AAFP has issued a number of Action Alerts during the past few months, asking members to contact their legislators to speak out against the cuts in Medicare payments and asking for a permanent fix to the SGR. In response, AAFP members have sent more than 9,000 messages to legislators during the past five months.