Date Published: 18 March 2009

Permanent Medicare Physician Payment Reform Needed This Year

Permanent Medicare physician payment reform is needed this year to ensure long-term access to care for seniors, and the realistic forecast of future Medicare spending on physician services in the federal budget makes the reform economically feasible.

“The administration made clear in its budget that it does not expect Medicare physician payment cuts to occur, and we encourage Congress to seize this opportunity for permanent action to fix the physician payment formula,” said American Medical Association (AMA) Board Chair Joseph M. Heyman, MD in testimony today to the House Committee on Small Business.

“By appropriately forecasting future spending on Medicare physician services, the administration has paved the way for permanent action,” said Dr. Heyman. “Congress should also adopt a similar forecast in its 2010 budget resolution so they can work on permanent reform of the Medicare physician payment formula, which continues to project cuts as the health care needs of seniors grow.”

The Medicare physician payment formula has been flawed from its inception, and since 2002 Congress has had to intervene on a yearly basis to avert projected payment cuts in order to preserve seniors’ access to care. The time has come for Congress to stop implementing incremental reform and replace the current payment formula with one that ties payments to the increasing cost of caring for patients.

“Putting a band-aid on the problem has helped in the short-term, but it’s time for real reform,” said Dr. Heyman.

“A shortage of 85,000 physicians is predicted by 2020 and the baby boomers reach age 65 in just two years,” said Dr. Heyman. “We need to find ways to keep practicing physicians caring for seniors and encourage the best and brightest students to become physicians – permanent Medicare physician payment reform will help us achieve that goal.”

About the American Medical Association
The American Medical Association helps doctors help patients by uniting physicians nationwide to work on the most important professional and public health issues. Working together, the AMA's quarter of a million physician and medical student members are playing an active role in shaping the future of medicine. For more information on the AMA, please visit www.ama-assn.org.

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