The dreaded sustainable growth rate formula (SGR) that cuts physicians' Medicare pay takes effect in 61 days (Dec. 1) but already the American Medical Association, 66 specialist practitioner societies and 50 state medical groups, are sounding the alarm. Again.
If nothing is done, the 23% cut in physician fees Dec. 1, will be followed by another 6.5% cut Jan. 1, reductions that could seriously impair the ability of seniors to access care because many physicians who now accept Medicare beneficiaries will stop doing so, physician groups say.
"The AMA is calling on Congress to immediately address this impending crisis when they return to Washington after the November elections," AMA President Cecil B Wilson, MD, said in a statement.
"Without action to stop the cuts, Congress will create a Medicare meltdown with access to care threatened for seniors and baby boomers who will begin entering Medicare in January," Wilson said. "Ultimately, a permanent solution must be passed to fix this broken system, but Congress must first stop the 30% payment cuts threatening seniors' access to care now."
The SGR has called for across-the-board reductions in physician payment rates to take effect in every year since 2002. But every year, the cuts have been postponed by legislation, after dire warnings and alarms from medical groups.
On June 25, after similar campaigns, the reductions were postponed again when President Obama signed into law Congressional legislation that postponed the SGR's implementation of 21.3% cuts, plus a physician fee increase of 2.2% through Nov. 30. Combined, they total a 23.5% decrease in reimbursements through Nov. 30.
The SGR formula has called for an across-the-board reduction in physician payment rates every year since 2002, and since 2003, through May 31, 2010, the cuts have been averted by legislative action. Last week, after a sustained battle, Congress finally approved—and President Obama signed into law on June 25—a provision postponing the SGR through Nov. 30. The reduction called for the SGR (21.3%)—plus an increase in physician rates approved by Congress (2.2%)—would essentially create a 23.5% decrease in reimbursements.
In a letter to U.S. House of Representatives Speaker Nancy Pelosi and House Minority Leader John Boehner, the medical groups said that if there is no action to prevent the SGR from taking effect, the 23% cut take for Medicare and TRICARE payments for physician services would be followed by another reduction.
"To make matters worse, an additional cut of 6.5% will follow on Jan. 1, 2011. Physician practices simply cannot absorb cuts of this magnitude in programs as important as Medicare and TRICARE," they wrote.
The situation is causing indirect havoc to physician practices as well, they explained.
Congress enacted short-term stopgap measures, but three times failed to act in time and Medicare payment cuts of more than 20% went through. The Centers for Medicare and Medicaid held back payments until the legislation was passed.
However, the groups' letter emphasizes, there were highly disruptive consequences. "Many practices were forced to seek loans to meet payroll expenses, lay off staff, or cancel capital improvements and investments in electronic health records and other technology," their letter says.
"Furthermore, when payments resumed, many physicians experienced long delays in receiving retroactive adjustments. This is not the way to manage a program that seniors and the disabled rely on; Congress must act to avoid a repeat of the disruptive cuts that occurred this year."
And there could be political fallout as well from seniors who could end up paying more. The medical groups stated that they envision many doctors who now accept Medicare's allowance as payment in full are considering switching their status to that of a doctor who does not participate in Medicare.
Then, their patients will receive bills for more than the Medicare allowance.
"In the meantime, there is an imminent crisis," the letter continues. "A statutory payment update that lasts at least through the end of 2011 will provide time for Congress and the physician community to develop a long-term solution, to ensure that seniors can count on finding physicians to care for them, and that physicians will not view Medicare and TRICARE as threats to the viability of their practice."