MSS Raps 4.5{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} Medicare Cut ‘When Medicare Sneezes, The State’s Health Care System Catches A Cold’

WALTHAM — The Mass. Medical Society (MMS) responded recently to yet another announced cut in Medicare physician reimbursement — the second cut in the last three years — and called the action “especially harmful,” saying it will “continue to undermine patient access to care and drive physicians from the practice of medicine.”
Thomas E. Sullivan, M.D., president of the 18,000-member MMS, expressed physicians’ deep dejection on the final rule issued Oct. 30 by the Centers for Medicare and Medicaid Services (CMS) that imposes a 4.5{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} reduction in the physician reimbursement schedule, effective Jan. 1, 2004. The cut amounts to $68 million for Massachusetts, and may jeopardize care for many Massachusetts senior citizens.

“We are deeply disappointed,” said Sullivan, “that CMS’s final rule on the 2004 physician payment formula calls for a 4.5{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} reduction in reimbursements. The physician reimbursement formula is deeply flawed, and the impact of failing to address this issue will continue to undermine patient access to care and may drive more physicians from the practice of medicine, or to practice in other states.”

A survey last year by the American Medical Association found that 42{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of physicians would not sign Medicare participation agreements if cuts in payments continue to take place.
The 4.5{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} cut is the second cut in Medicare reimbursements within the last three years. Last March, Congress revoked a scheduled cut of 4.4{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} for 2003 and approved a 1.6{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} increase. But that small increase followed a cut of 5.4{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} in 2002.

“In Massachusetts, this reduction is especially harmful,” Sullivan continued, “because the private health plans closely align their fee schedules to Medicare. So when Medicare sneezes, virtually the entire Massachusetts health care system catches a cold.”

Sullivan commended Sens. Edward M. Kennedy and John F. Kerry and the Massachusetts congressional delegation for their strong support of physicians on this issue. “We urge the congressional conference committee now to adopt the House language on physician reimbursements that would stop the cut, adopt at least a 1.5{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} increase in the physician fee formula for the next two years, and fix the flaw in the reimbursement formula,” said Sullivan.

Sullivan said the continuing declines in reimbursements combined with continuing soaring professional liability insurance rates are key issues in the physician practice environment and are putting even greater strains and pressures on the physician workforce in the state. The Medical Society’s 2003 Physician Workforce Study indicated that many physicians are contemplating leaving the state or retiring early and that recruitment and retention of physicians are growing problems. Medical liability insurance rates for physicians have increased an average of 9{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}, 14{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}, 12.5{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}, and 20{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} over the last four years, with many high-risk specialties experiencing much higher increases. Obstetricians and neurosurgeons are now paying more than $100,000 per year just for liability insurance, with many seeing premiums doubling.

“These trends cannot continue without inflicting irreparable damage to an already fragile health care system,” Sullivan said.

The Mass. Medical Society, with more than 18,000 physicians and student members, is dedicated to educating and advocating for the physicians and patients of Massachusetts. Founded in 1781, the MMS is the oldest continuously operating medical society in the country. The society owns and publishes the New England Journal of Medicine, the Journal Watch family of professional newsletters, and AIDS Clinical Care, and also produces HealthNews, a consumer health publication. For more information, visit www.massmed.org.