AMA Calls on Congress to Permanently Fix Medicare Physician Payment Formula
By J. James Rohack, M.D.
President, American Medical Association
Medicare’s final 2010 payment rule confirms that in 60 days physicians face steep cuts of 21.2 percent – the largest payment cut since Congress adopted the fatally flawed Medicare physician payment formula. Access to care and choice of physician for seniors, baby boomers and military families is at serious risk – and Congress must fix the payment formula once and for all this year.
Permanent repeal of the payment formula is an essential element of comprehensive reform to improve the health system for patients and physicians. Security and stability for America’s seniors will not be achieved without a permanent solution to the broken Medicare physician payment formula. The U.S. House of Representatives will soon vote on legislation (H.R. 3961) to permanently repeal the current Medicare physician payment formula, and Congress must fulfil their existing obligation to America’s seniors as they work to create new commitments to the American people through health reform.
Short-term fixes have grown the problem. In four years the cost of a permanent solution ballooned from $49 billion to more than $200 billion and cuts increased from under five percent to a whopping 21.2 percent.
The Medicare rule formalizes the removal of physician-administered drugs from the physician payment formula. This is a long overdue step on the road to permanent reform as it significantly lowers the cost of fixing the formula once and for all. AMA called for this action, and thanks the Obama administration for its recognition that physician-administered drugs do not belong in the payment formula.
To help Medicare update its data on the cost of providing 21st century medical care, the AMA and 72 other medical professional organizations conducted a statistically valid, collaborative and transparent survey on practice expenses. The Physician Practice Information (PPI) Survey data meets all the criteria that CMS established to replace the existing data. These criteria include confidentiality, approved survey instrument and protocols, experienced survey contractor, randomly selected sample, representative responses, and level of precision. This group effort was spearheaded by AMA at the request of national medical specialty societies and Medicare, and it is the first time in nearly a decade that this information has been updated for all medical specialties. All specialty medical societies had the opportunity to assist in the survey development process. The input from this survey helped Medicare determine payment rates for all medical specialties, which are published in this rule.