Washington – It will cost billions of dollars to override required cuts in Medicare payments to doctors, but the perennial stopgap move is necessary to ensure that patients receive the health care they need, lawmakers said Tuesday.
A program set up in 1997 to put the brakes on federal Medicare spending sets annual and cumulative spending targets for physician reimbursements. When spending increases exceed economic growth, payments to doctors are supposed to be cut.
Under the system, payments to doctors would have to be cut by 5 percent a year through 2016 to meet program spending targets, according to federal estimates.
That is unlikely to happen. Lawmakers fear that any reduction in payments could add to the record increases in Medicare premiums and drive doctors from the program.
Rep. Michael Ferguson, R-N.J., said the mandated-cuts system is “fatally flawed and it’s time we start writing its obituary today.”
Medicare doctor fees rose 4.5 percent between 2000 and 2005.
During the same period, spending per patient for physician services increased 45 percent as beneficiaries went to the doctor more often and received more complicated and expensive services.
If left unchecked, those increases would compromise the future of Medicare, said A. Bruce Steinwald, director of health care for the General Accounting Office.
This year, doctor fees account for 16 percent of Medicare spending on benefits, or $60 billion. Since 1997, the government has overshot spending on those fees by a cumulative $30 billion.
Even though the law requires reductions in doctor payments when the target is missed, Congress has been reluctant to allow those cuts to go through. The last cut in doctors’ fees – 4.8 percent – was in 2002.
Since then, Congress has rejected the mandated reductions and allowed small increases in payments. The same is likely to happen this year.
“I don’t believe we can continue this Band-Aid approach to fixing this recurring physician payment problem,” said Rep. Joe Barton, R-Texas, chairman of the House Energy and Commerce Committee.
Speaking at a hearing of the panel’s health subcommittee, he pressed his colleagues to come up with a permanent fix before the end of the session.
Rep. Frank Pallone, D-N.J., said the groundwork had been laid for a temporary fix, given the limited number of legislative days left in the year.
Even a 1 percent increase next year would cost the government $13 billion through 2011, the Congressional Budget Office estimates.
