Stat Tracker
Measuring the Impact of Medicare Physician Fee Cuts

The recently released results of an American Medical Association/American Academy of Ophthalmology online survey of physicians indicate that Medicare payment cuts are hurting patient access to care. The survey showed that:

24% of physicians have either placed limits on the number of Medicare patients they treat, or plan to do so in the next 12 months

83% of physicians said they planned to sign or continue an agreement to participate in the Medicare program in 2003, but 42% said they would not continue to sign Medicare participation agreements if additional payment cuts occur

Of the 60% of physicians who plan to make practice changes in the next 12 months, 51% are making changes because of the 5.4% fee cut under which they're currently operating. Reported changes include:

• deferring equipment purchases (43%)
• discontinuing certain services (26%)
• referring complex cases (22%)
• laying off staff (21%)

According to Academy Vice President for Governmental Affairs Catherine Cohen, the survey results reflect the plans of some Academy members, who are limiting the number of Medicare patients they see or not seeing new Medicare patients at all.

"Also, in light of the fact that many other third-party payers model their reimbursement rates after Medicare's, members anticipate more severe financial problems if further Medicare cuts are allowed to occur," she said. "Some members are even considering retiring earlier than they had planned."

Time is Running Out

In June the U.S. House of Representatives passed the Medicare Modernization and Prescription Drug Act, which mandates a 2% physician payment update for 2003, and allows fees for 2004 and 2005 to be calculated based on the updated formula. But, at press time, Congress had gone into recess, and the Senate had yet to act on physician fee fix provisions. When Congress reconvenes after the November elections to wrap up unfinished business, the Senate may address the package of Medicare changes that had been introduced early in October by Senators Max Baucus (D-Mont.) and Charles Grassley (R-Iowa). That package includes a 3-year fee fix similar to the one in the House-passed bill.

If that measure doesn't pass by the end of this year, work toward a fee fix in the House and Senate will have to begin anew in January.

About this data: The information in this month's installment of Stat Tracker was drawn from a February-to-April online survey of 1,993 members of the American Medical Association conducted by the AMA and the American Academy of Ophthalmology. 520 completed questionnaires were returned.