For physicians and their lobbyists, congressional lawmakers made sure that 2007 would be anything but a happy new year.
In a report released quietly at the end of December, federal actuaries from the Congressional Budget Office reported that the recently passed tax and health bill has set the table for a 10% cut in physician reimbursement in 2008.
Though the actual cut may end up being lessanywhere from 5% to slightly higherthe double-digit number was enough to jar Medicare-wary doctors, many of whom say they already toe a thin profit-and-loss line.
G. Joseph Mehfoud, an internist at Commonwealth Primary Care in Richmond, Va., said a cut of that size would prove crippling. The bottom line is, if Medicare continues to make cuts, doctors will come to a point where they stop seeing Medicare patients, he said. And that tipping point, he said, is not far off.
Mehfoud said that he and his physician colleagues meet annually to discuss the pending cuts. Often, the mood is grim. Mehfoud said they regularly have to worry about the routine costs of business, like employee pay raises, rent hikes and higher employee health costs. Commonwealth has more than 40 providers at nine different locations.
Were trying to run a business, he said. All of my overhead goes up, and with reimbursements going down, you cross that line where its much more costly to treat patients.
Mehfouds experience lends credence to what physicians interests groups have long warned: that without a proper fix to the equation Medicare uses to determine service payments, physicians will be forced to greatly trim their Medicare patient population. But whatever the fix, the cost could prove prohibitive.
In its assessment, the CBO shows that the cost of a one-year fix to the Medicare physician payment cut not only runs to $1.8 billion, but also will cost the physician lobby countless hours of lobbying and hand-wringing in order to reverse the 10% cut thats on the books for 2008.
The provision in question is one that was added during eleventh-hour negotiations and provided doctors with a reprieve they had sought for a scheduled 5% cut in 2007. It also provides an additional payment to physicians who report quality measures.
But its the section that deals with physician payments that draws the most attention. Under terms of the bill, Medicare payment rates are expected to revert to prior-law levels in 2008.
Assuming that occurs, CBO estimates that payment rates for physicians services will be reduced by about 10% in 2008, the report states.
The CBO also estimates that physicians making up roughly two-thirds of Medicare spending on services will qualify for participation in the quality-reporting program, resulting in a
$300 million lump-sum payment in 2008.
Overall, the CBO report lends traction to positions held by physician groups such as the American Medical Association, which publicly supported parts of the bill even while quietly saying it was unhappy with it.
This year we will work with Congress, the administration and seniors to stop the 2008 Medicare cut and enact a more-permanent solution to the flawed Medicare physician payment formula, AMA Board Chairman Cecil Wilson said in a written statement.
But another provision in the bill could help give Congress an out. The bill gives HHS Secretary Mike Leavitt some $1.35 billion to shuffle around in 2008, with a strong lean to have those dollars go toward physicians to the maximum extent feasible, the report states.
Presumably, Leavitt will use that money to help defray the projected costs for the 2008 Medicare cut, Robert Doherty, senior vice president of government affairs and public policy at the American College of Physicians, said. The extra dollars would essentially bring the payment cut to 5% or a little more, he said.
But even so, the act ensures that groups such as the AMA and the American College of Physicians will again have to spend countless hours and dollars to ensure that a fix for 2008 can be accomplished even though there is a bit of exhaustion with replaying the same scenario year after year on the Hill, Doherty said.
One policy analyst was more succinct.
Yes, they helped the docs in December, but no, they didnt fix the problem, said Larry Goldberg, an independent consultant in Oakton, Va. Here we go again.