Analysis: Medicare crisis looms, docs say

WASHINGTON, June 4 (UPI) -- Facing down the perennial threat of Medicare physician payment cuts, a leading physicians' group said Monday slashing what doctors are paid would keep many seniors from accessing care.

"The physician foundation that Medicare's promise (to seniors) is built on is at risk," Cecil Wilson, board chair of the American Medical Association, told reporters Monday.

The Sustainable Growth Rate formula that determines how much Medicare pays doctors for services calls for a 10 percent cut in 2008. For the past five years, Congress has stepped in to overrule the formula, but so far this year, no such bill has been introduced.

If that rate reduction goes through, about one in three doctors will decrease the number of Medicare patients they accept, and more than one in four doctors will stop accepting Medicare patients altogether, according to a survey of almost 9,000 physicians conducted by the association.

About 8 percent of those surveyed even said they would stop treating seniors on Medicare who are already their patients.

"This cut will severely impact physicians' ability to care for Medicare patients," Wilson said.

To head off the "looming crisis" of access problems, the association said Congress should not only reverse the cuts, but add a 1.7 percent increase to reflect rising practice costs for doctors.

The group also launched a $2 million public relations campaign urging seniors and their family members to oppose the cuts.

Cuts will also hurt patients not in Medicare, Wilson said. Doctors feeling the financial crunch of low reimbursement rates are unable to invest in healthcare information technology like electronic health records. Without that technology, they will have difficulty measuring -- and therefore improving -- the quality of the services they provide.

And because many private payers peg their reimbursement rates to what Medicare pays, the impact of any cuts could send shock waves through the entire healthcare system, Wilson told United Press International.

In the short run, Congress should finance a reimbursement increase by eliminating the 12 percent gap between what the government pays for patients in traditional Medicare and the higher rate paid to Medicare Advantage managed care plans, he said, thus saving $65 billion.

In the long run, lawmakers should eliminate the Sustainable Growth Rate, and instead peg physician reimbursements to increased medical costs, Wilson said. The formula "is a measure of how the economy is doing. It's not a measure of how many patients get sick."

Replacing the formula, however, may not be an easy task. Earlier this year a report by the Medicare Payment Advisory Commission -- the quasi-independent body that advises Congress on Medicare -- said the rate harms the long-term solvency of the program. The commissioners, however, were unable to agree on any one alternative.

Funding should not come from higher Medicare premiums for seniors, Wilson added. "We believe they should be protected from wild changes in terms of premiums."

If the cuts do go through, he said, "Medicare as patients now know it will be a distant memory."

The AARP, the nation's largest group representing seniors, said it also supports eliminating the Sustainable Growth Rate, spokesman Drew Nannis told UPI.

"It is possible to give doctors the fair pay they earn while also giving patients the top quality care they deserve," he said. "The Sustainable Growth Rate does not work and it's resulting in significantly higher Medicare premiums every year.

"Congress must replace the SGR with the building blocks to create a truly sustainable (Medicare outpatient) payment system based on improved health IT, comparative effectiveness data, performance measurement, and enhanced care coordination."