CMS fee cuts: Congress plays for time; urologists squeezed

Key Points

Washington-The other day, I was talking with my urologist after my annual checkup. After being pronounced in good shape with no concerns, I asked him about the key issues he faces in his three-physician practice in the suburbs of Baltimore.

The conversation with my urologist occurred only a couple of weeks after the House Small Business Committee held a hearing in Washington on the impact of Medicare fee payment cuts on small medical practices. Unfortunately, my doc was not on the list of witnesses to be called to testify. But he should have been because he speaks with candor and conviction based on sound experience.

Now, however, the cumulative effect of annual efforts to slash Medicare payment rates, the resulting miniscule fee payment updates, and continually increasing costs is taking its toll.

What happens if Congress fails to come to the rescue and that 10.6% cut takes effect?

"I don't know how we'll be able to handle it," my doc said. Like most urologists, Medicare patients are a substantial part of his patient load. If fees are cut to that extent, it's going to be tough.

That was the point made during the hearing by representatives of the American Medical Association, the American College of Physicians, and the American College of Surgeons.

"Undermining physicians who serve millions of disabled, elderly, veterans, and disadvantaged patients makes no sense," said Rep. Nydia M. Velázquez (D-NY), chair of the House Small Business Committee, after the hearing. "There are enormous gaps in the American health care system, and these businesses are helping to fill them. Failing to recognize that fact flies in the face of what is needed."

She noted that Medicare physician fee payment cuts by the Centers for Medicare & Medicaid Services may undermine the work of these small medical practices.

"Seniors already have to call dozens of providers in hope of finding one who will accept Medicare," said Velázquez. "If CMS pushes forward with these cuts, these patients will have even fewer choices. They are the ones who will pay the ultimate price."

According to the testimony, expenses such as rent, payroll, and health and malpractice insurance are expected to increase more than 20% over the next 9 years. Witnesses said rising costs would be compounded severely by fee cuts and would force them to stop accepting new patients, postpone capital purchases, or forego new health technology altogether. Some physicians may have to close their practices or retire early.

At press time, it appeared that this year's "solution"-if it comes-would be more modest than an earlier plan by Senate Finance Committee Chairman Max Baucus (D-MT). Baucus' plan would postpone the cut for 18 months and would increase fee payments to physicians by an average of 1.1%.

Senate Republicans and the Bush administration reportedly made it clear that it would oppose Baucus' plan, which would have included a "balloon financing" mechanism and a potential payment cut of 21% in 2010, which Baucus promised to prevent by addressing the broader issue of funding Medicare physician payments next year.

While both parties want to prevent the cut, they disagree on how to cover the estimated 5-year cost of $18.2 billion, among other issues.