AMA: Permanent repeal of the Medicare physician payment formula must be part of health reform

The following is part of a series of original guest columns by the American Medical Association.

by J. James Rohack, M.D.

All eyes are on the Senate Finance Committee this week as they prepare to vote to move health reform legislation forward. The AMA is committed to health reform, and as the process moves to the Senate floor, it’s crucial that the Senate include permanent repeal of the current Medicare physician payment formula in its health reform legislation.

AMA: Permanent repeal of the Medicare physician payment formula must be part of health reform Democrats and Republicans have publicly stated that the flawed formula should be scrapped. Chairman Baucus and others have expressed support for a long-term solution. It’s clear to physicians and patients that the time for band-aid fixes is over. Short-term fixes have temporarily averted an access crisis, but it has also led to next year’s projection of a 21 percent cut, with more in years to come.

The result of the cuts is clear: reduced access and choice of physicians for seniors who rely on the program now and for the millions of baby boomers aging into the program in just two years as physicians are forced to make practice changes. No doubt the cuts will hurt efforts by physician practices to purchase health IT, participate in quality improvement activities, update equipment or hire new staff.

As we work on health reform this year, preserving the security and stability of Medicare must be part of the equation. In addition to permanent repeal of the “Sustainable Growth Rate” Medicare physician payment formula, AMA is working to improve other physician-related provisions in the Finance committee mark.

Specifically, we are concerned with the creation of a Medicare commission that does not apply equally to all stakeholders. The proposal would create a double-jeopardy situation for physicians and non-physician practitioners who are already subject to a spending target and potential payment reductions under the Medicare physician payment system. If it is retained, the concept of an Independent Medicare Commission must be substantially redesigned to ensure fairness and equity, and to avoid unintended consequences for Medicare patients.

Also of concern is a provision that penalizes all physicians above the 90th percentile in resource use. This ensures that a significant number of physicians will always be subject to steep payment reductions, regardless of any changes they have made in their practice patterns or how close they are to the average. AMA is calling for the elimination of this provision from the Senate Finance bill.

As I travel the country, I hear from physicians daily about the need for reform. AMA is constructively engaged with Congress and the administration to ensure that reform improves the system for patients and physicians – and that includes permanent repeal of the Medicare physician payment formula.

J. James Rohack is President of the American Medical Association.

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