Medicare physician payment cut averted

December 21, 2006

Congress has passed legislation to prevent a scheduled 5% cut in 2007 Medicare physician payments and instead will freeze payment rates for 1 year.

Congress has passed legislation to prevent a scheduled 5% cut in 2007 Medicare physician payments and instead will freeze payment rates for 1 year. The bill sets aside funds to help offset a projected payment cut in 2008, and it extends the geographic price cost index to prevent additional payment cuts for physicians in rural areas.

“[This] action provides an important but temporary reprieve for seniors and the physicians who care for them,” said Cecil B. Wilson, MD, chairman of the board of the American Medical Association.

Dr. Wilson added that, while far from ideal, averting an across-the-board payment cut in a difficult legislative environment demonstrates how the collective voice of physicians and patients can effect positive change. Nearly one million patients and physicians contacted Congress to urge them to take action on this issue.

“The time is long overdue to devise a sound financing system for the Medicare program so we can avoid this annual struggle to preserve seniors’ access to care,” Dr. Wilson said. “Early next year, the AMA will renew discussions with our physician partners, Congress, the administration, and senior groups to develop a more permanent solution to the flawed Medicare physician payment formula.”

The legislation also initiates a physician quality reporting program to begin in July 2007.