Physicians’ Lobbying Clout Tested by 27% Medicare Fee Reduction

The lobbying clout of U.S. physicians is being tested by a 27 percent Medicare fee cut that Congress may be unable to reverse as lawmakers grapple with proposals to pare the deficit by $1.2 trillion.

Doctors are counting on a congressional debt panel to delay the reduction, as Congress has done repeatedly in the past decade. If lawmakers agree, the cost -- $22 billion in 2012 or more than $300 billion in a decade — may be offset by tax increases and budget reductions for other government programs.

The prospect of payment declines raises concerns that doctors may stop accepting patients in Medicare, the U.S. health plan for the elderly and disabled, or drop the program. Primary- care physicians also may be pitted against specialists over which groups should be protected against reductions as the American Medical Association meets in New Orleans this weekend to review its political strategy.

“Doctors will not be able to keep their offices open or they will not be able to see Medicare patients,” said Peter Carmel, a pediatric neurosurgeon in Newark, New Jersey, who is president of the doctors’ group.

Medicare payment reductions also affect people enrolled in the military’s medical plan, called Tricare.

With a Nov. 24 deadline looming for Congress’ so-called supercommittee to produce a package of deficit cuts, doctors are gathering this weekend at a semiannual meeting of the AMA’s policy-setting body, the House of Delegates. Though the reduction isn’t mentioned on the agenda, the group will weigh proposals to restructure Medicare and the way doctors are paid.

Medicare Restructuring

The AMA plans to recommend next year a restructuring of Medicare to keep the program solvent. A report the association will consider adopting as policy this weekend, produced by an internal committee, concludes that “it seems unlikely that the traditional Medicare program can continue to serve as the primary source of health care coverage and services for seniors” in the long term.

The physicians will also debate a potential reduced federal role in the Medicaid health program for the poor and how new insurance marketplaces will be designed as required by the 2010 health care law.

The AMA in September coordinated a letter-writing campaign by state medical associations and specialist societies against the fee reductions to lawmakers on congressional committees with jurisdiction over Medicare. It’s also running television and radio ads urging against the cuts. The American College of Cardiology had a “fly-in” of group leaders in Washington last week to meet with debt panel members and staff, said Brian Whitman, associate director of regulatory policy for the group, which represents heart doctors.

Credible ThreatsDoctors#146; threats to leave Medicare if the cut goes through are credible, said Henry Aaron, a health policy analyst and Medicare expert at the nonprofit Brookings Institution in Washington.

#147;Some doctors even now are withdrawing from Medicare because of the instability#148; in payments, he said by phone. #147;When people are voting with their feet even before anything is actually done, one has to take it seriously.#148;

The prospect of cuts is also dividing family physicians and specialists such as cardiologists and surgeons. The Medicare Payment Advisory Commission, a body that recommends policy changes to Congress, has said lawmakers should freeze payments for primary-care physicians while enacting cuts of more than 17 percent over three years for specialists.

Inadequate PaymentsPrimary-care physicians have long complained about inadequate payments. The American Academy of Family Physicians is lobbying Congress to give primary-care doctors a payment increase at least 3 percentage points more than specialists next year, said Glen Stream, a doctor in Spokane, Washington, who is the group#146;s president.

#147;If you cut pay for primary-care services along with everyone else, the best and the brightest with the ability to study medicine likely are going to choose something else,#148; he said by phone. #147;We won#146;t have the primary-care doctors we need.#148;

The Medicare cuts stem from a 1997 federal law aimed at balancing the budget. To slow what was then rapid growth in Medicare physician payments, the law included a formula, called the Sustainable Growth Rate, that ordered automatic cuts if total spending for physician care exceeded growth targets.

The law has mandated cuts annually since 2001, and Congress has postponed the reductions through #147;doc fix#148; bills every year except 2002. Each stopgap has made subsequent cuts bigger because of the way the formula is designed. This year#146;s proposed reduction, at 27 percent, is the largest ever.

25% of RevenueStream said the average primary-care physician gets about 25 percent of revenue from Medicare patients, meaning the scheduled reduction would eliminate about 7 percent of a practice#146;s total income.

Two previous debt-reduction proposals #8212; one from a committee President Barack Obama appointed and another from an ad hoc group of U.S. senators #8212; have included a permanent repeal of the formula. The congressional debt panel should use those proposals as a model, Carmel, the AMA president, said.

Carmel#146;s group opposes MedPAC#146;s recommendation to freeze pay for primary-care physicians for 10 years while cutting specialists#146; payments. The advisory board also recommended reducing Medicare payments for drugs, lab tests, rehabilitation care, private Medicare Advantage insurance plans and medical equipment such as walkers and oxygen concentrators to offset the $235 billion cost of the pay freeze.

#147;I can#146;t imagine a more wrongheaded solution to the problem,#148; Carmel said.

Primary Care PushStream said his group doesn#146;t support the specifics of the MedPAC proposal, only the idea of giving primary-care doctors a larger increase #8212; or smaller cut #8212; than specialists.

Instead of paying primary-care doctors more for office visits, doctors like Stream should get bonuses for improving the coordination of care, said Whitman of the heart doctors#146; group.

Doctors aren#146;t placing all of their bets on the debt panel. Stream said his group#146;s lobbyists are focusing on members of standing committees with oversight of Medicare in the House and Senate as well.

No fallback legislation has been introduced, which leaves doctors without an alternate strategy. In 2010, Congress passed four short-term fixes, covering one to six months at a time, before passing a one-year reprieve from the payment cut in December.