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Obama Calls for Permanently Fixing Physician Payment Formula

Janice Simmons, for HealthLeaders Media, June 14, 2010

Physicians worried about the 21% cut in Medicare and TRICARE payments that started June 1 were the subject Saturday of President Obama's weekly address in which he called for "permanently reforming" the way physicians are paid.

Citing the initial role of the sustained growth rate (SGR) a decade ago to slow Medicare costs, Obama said the cuts proposed by the SGR would not "only jeopardize our physicians' pay, but our seniors' healthcare."

When the Senate began its weekend recess last week, it left behind the jobs bill (HR 4213) that included the physician payment fix amendment introduced earlier in the week to postpone payment cuts. Under the current amendment, which uses the same language passed by the House two weeks ago, physicians would see an increase in payment rates of 2.2% for the remainder of 2010 and a 1% increase in 2011.

"I realize that simply kicking these cuts down the road another year is not a long term solution to this problem," Obama said. He added that for years, "I have said that a system where doctors are left to wonder if they'll get fairly reimbursed makes absolutely no sense."

"I am committed to permanently reforming this Medicare formula in a way that balances fiscal responsibility with the responsibility we have to doctors and seniors," said Obama. Specifically, this will be done through "significant steps to slow the growth of Medicare costs through health insurance reform" and by eliminating at least half of the waste, fraud, and abuse in the healthcare system by 2012.

In Chicago, at the annual American Medical Association meeting this weekend, AMA President J. James Rohack, MD, said that the association was "pleased to see President Obama stand with seniors and their physicians" to stop a "looming Medicare meltdown."

According to AMA's new online survey, already "31% of primary care physicians are limiting care to Medicare patients."

While the 21% cut has been in effect since June 1, the Centers for Medicare and Medicaid Services has told its contractors to hold claims for Medicare reimbursement for 10 business days to avoid disruption. That hold period is scheduled to end Tuesday.


Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at jsimmons@healthleadersmedia.com.

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