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02-01-2013 | Article

Fiscal cliff reflects a need for a long-term Medicare payment solution


AMA statement and letters

medwireNews: The last-minute congressional approval of a fiscal cliff package that averted a 26.5% Medicare physician payment cut until December 31, 2013 reflects an absence of long-term solutions that are necessary to make Medicare a dependable health coverage provider for patients and physicians, said the president of the American Medical Association (AMA).

"This last-minute action on the part of Congress is a clear example of how the Medicare program is increasingly unreliable for physicians and patients," Jeremy Lazarus stated. "This instability stalls progress in moving Medicare toward new health care delivery models that can improve value for patients through better care coordination."

Previous to this 11th-hour agreement, the executive vice president and CEO of the AMA, James Madara, expressed concern over the apparent fiscal impasse in a recent letter that was addressed to the Senate and House of Representatives. He pointed out the harmful effects of unpredictable politics that made it possible for cuts of almost 29% in payments to services provided to Medicare beneficiaries to happen. "This continuing game of political chicken is unacceptable and dangerous to the future of the Medicare program," he wrote.

Madara complained that Congress has repeatedly had to take last-minute action to prevent scheduled cuts. A total of 15 such instances have occurred since 2003 when congress provided only brief relief from "a serious structural flaw" in the Sustainable Growth rate (SGR) formula, which calculates physician payments.

Despite past Congressional assurances of disallowing scheduled cuts to take effect, Congress twice failed to agree on terms by a deadline to prevent such cuts in 2010. As a result, interruptions in payments disrupted access to care for Medicare beneficiaries and strained physician practices. "As this pattern continues," Madara stated in the letter, "physicians are growing increasingly wary of participating in a program that mandates significant practice investments… while failing to provide any certainty of future payments. The fact that Congress continues to fail to meet this most basic obligation is inexcusable."

Madara warned that unstable funding for physician services for Medicare patients is increasingly causing physicians to rethink their policies in treating Medicare patients.

With the current close-call avoidance of Medicare payment cuts, Lazarus hopes that a collaborative effort will end annual Medicare payment disruptions once and for all. "Physicians want to work with Congress to move past this ongoing crisis and toward a Medicare program that ensures access to care and the best health outcomes for patients and a stable, rewarding practice environment for physicians."

By Peter Sergo, medwireNews Reporter