The American Medical Association in a letter to Congress today urged lawmakers to replace Medicares flawed formula for calculating physician payments.
Access to high-quality healthcare for seniors is in peril due to the looming meltdown of Medicares payment mechanism for physicians, which will cause payments to drop by 10% in 2008, wrote Michael Maves, AMA executive vice president and chief executive officer. Additional reductions of more than 40% will ensue by 2015, if the sustainable growth rate, or SGR, which is tied to the health of the economy and used to calculate physician payments, is not replaced.
Congress in the past has adopted interim measures to stop previous payment reductions, but a more permanent solution is needed, Maves wrote, adding, The AMA understands that tackling this problem is not easy and stands ready to work with Congress to improve Medicare and the quality of healthcare in America.
The Congressional Budget Office has projected that replacing the SGR with annual updates based on inflation would increase payment rates for physicians by about 2% annually, but would cost the federal government $262 billion over 10 years, plus $70 billion in higher costs for beneficiaries. -- by Jennifer Lubell