AAFP Fights New Round of Medicare Payment Cuts in Senate

May 27, 2015 01:48 pm News Staff Washington, D.C. –

The AAFP is fighting a Senate proposal that would add more cuts to Medicare payments starting in 2024.

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Physicians cleared a major hurdle with the repeal of the Medicare sustainable growth rate (SGR) formula in April and the elimination of an annual threat of steep Medicare payment cuts. But a new trade bill(www.congress.gov) introduced in the Senate this month calls for another round of cuts that would affect primary care physicians directly.

Family physicians and others who participate in Medicare have encountered a 2 percent cut to their payments since 2013, and lawmakers extended the cuts until 2025. A provision in the new bill, the Trade Adjustment Assistance Reauthorization Act, would add an additional 0.25 percent reduction in payments from October 2024 to March 2025. The proposal would reduce Medicare spending by $700 million, according to the Congressional Budget Office.

Story highlights
  • The AAFP sent senators a letter laying out opposition to a proposed Medicare payment cut.
  • Language in a trade bill would add an additional 0.25 percent reduction in payments from October 2024 to March 2025.
  • AAFP Board Chair Reid Blackwelder, M.D., called for payment changes that support the value of primary care.

If adopted, the measure would represent the fourth time in 18 months that lawmakers have resorted to sequester policy -- across-the-board cuts that take effect when Congress cannot agree how to pay for deficit spending -- to obtain additional funding and the first time that deeper Medicare cuts would be made in a fiscal year. AAFP Board Chair Reid Blackwelder, M.D., of Kingsport, Tenn., wrote a letter(2 page PDF) to Senate Majority Leader Mitch McConnell and Minority Leader Harry Reid asking them to remove the provision from the bill.

"Continuing to double down on the sequester is destructive enough; using these reductions in Medicare to pay for non-Medicare programs is even more alarming to family physicians," the letter reads.

Physicians already faced a cumulative 20 percent payment reduction when the automatic cuts were originally scheduled to end, said Blackwelder.

"This payment cut is perhaps even more devastating than the fatally-flawed SGR formula because instead of the threat of an immediate cut, it is a real cut that is happening now and accumulates over a 10-year period," he said. "This creates additional instability because of how long the cuts will happen and how deep they will be, especially with the current trend of extending the timeframe the cuts will take place or increasing the cuts with the original sequester."

Once again Congress is relying on Medicare funding to pay for something unrelated to medical care, a trend that is proving to be troubling to family physicians.

"The kind of cuts where Congress is using Medicare payments to fund non-Medicare programs doesn't make sense," Blackwelder said. "It's not how the sequester should be handled."

The declining payments represent another obstacle for family physicians who are still waiting for alternative payment models to take hold.

"These are not small cuts," Blackwelder said. "For family physicians 25 percent of their patient base is currently composed of Medicare patients, and we are seeing a rapid increase in Medicare enrollment because of the aging population. The extent of the cuts grows every year, and smaller family physician practices are just barely making ends meet."

With budget cuts being a reality of federal policy for the past several years, federal agencies have been promoting the concept of value-based care along with plans to increase reimbursement and support delivery models led by family physicians. The hope is that value-based care will achieve better health outcomes while reducing overall costs.

"Team-based primary care can do this, but we need payment changes that will support the value of primary care rather than an assortment of current cuts with a promise of payment reform down the road," Blackwelder said.