The chairman of the House Ways and Means Committee and the chairwoman of its health subcommittee told the CMS that projected average annual cuts in Medicare reimbursement to physicians of 5% in each of the next seven years were "simply unacceptable" and said the time was "ripe to tie physician payments to quality performance." Reps. Bill Thomas (R-Calif.) and Nancy Johnson (R-Conn.) proposed several changes to how Medicare pays physicians, among them: eliminating prescription drug and biologic expenditures from the payment formula and considering how new Medicare benefits affect physician costs. Thomas and Johnson sent a similar letter to the CMS in April 2004.
Physician organizations long have argued that the Medicare payment formula is flawed and lobbied for changes. They won a temporary fix through the Medicare Modernization Act of 2003, which replaced scheduled cuts of 4.5% in fiscal 2004 and 2005 with increases of 1.5% in both years. Doctors are scheduled for a 4.3% reimbursement cut as of Oct. 1. -- by Tony Fong