Medicare Cuts to Stay

With a record budget deficit loomingand the congressional debates focused onprescription drug benefits for 40 millionMedicare recipients, it's very likely thatlawmakers will intervene to blocka 4.5% cut in Medicare reimbursementpayments to physicians scheduled fornext year. Last year, Congress turned areduction in Medicare payments into asmall increase (1.6%), while tweaking theformula that the Center for Medicare andMedicaid Services uses to calculate reimbursements.(Doctors had reimbursementschopped by 5.4% in 2002.)However, the congressional action didn'tprovide a permanent fix for the formula,which is tied to the nation's gross domesticproduct. The AMA has urged legislatorsto revamp the reimbursement formula,claiming that any further cuts mayforce doctors to stop accepting newMedicare patients. In a recent survey,about half of the doctors who now takeon new Medicare patients said theywould stop if payment cuts continued.