Medicare Panel Advises 1% Physician Pay Increase

The Medicare Payment Advisory Commission recommended that lawmakers increase Medicare payments to physicians by 1% for fiscal year 2012, according to a report released Tuesday.

The commission is an independent congressional agency established by the Balanced Budget Act of 1997 to advise the Congress on issues affecting the Medicare program.

The 1% pay increase was based on the Commission’s opinion that most Medicare beneficiaries have access to physicians, despite threats by doctors to refuse Medicare patients, and that most physicians continue to accept beneficiaries.

“Among the small share of beneficiaries looking for a new physician, most could find one without major problems; however, finding a primary care physician was more difficult than finding a specialist,” according to “Report to the Congress: Medicare Payment Policy.” “As in past surveys, racial and ethnic minorities in both the Medicare and privately insured populations were more likely to experience access problems.”

The report noted, however, that while access to physicians was good on a national level, “beneficiaries in certain market areas may be experiencing more access problems due to factors unrelated to Medicare payment rates, such as relatively rapid population growth.”

The report also said the 29.5% Medicare pay cut that will go into effect on Jan. 1 "would be detrimental to beneficiary access to care," and urged lawmakers to find a "long-term remedy." The commission also recommended that Congress move away from the current fee-for-service payment model and instead suggested that Medicare’s payment systems encourage efficiency in providing services. In making its recommendation, the commission also noted that increasing payments to physicians in turn my increase patients’ cost-sharing and premium amounts.