Doctors Feverishly Seek to Halt Planned Cuts in Medicare Fees

Times Staff Writer

The Bush administration and Republican-led Congress are headed for a political confrontation with an influential constituency: the 700,000 doctors who treat seniors in the Medicare program and are frantically trying to stave off a planned cut in their fees.

The American Medical Assn. said Thursday that doctors may stop taking seniors as new patients -- or even drop out of the program -- if the cuts go through. It has launched a nationwide blitz to persuade Congress to rescind a 5.1% cut planned for next year, insisting that lawmakers act before they adjourn in October to campaign for reelection.

But no action is likely to occur, according to aides to key representatives and senators, given other priorities and the compressed schedule. The Bush administration is showing no sign that it wants to hold off on the cuts.

What is needed, according to a top Medicare official, is a revised system that rewards doctors for quality care rather than paying for numbers of office visits, tests and procedures.


“To throw more money into this old system is not the right answer. We need to work together to find a better and more appropriate way to pay,” Herb Kuhn, head of the Medicare division that deals with healthcare providers, said in an interview.

The reduction for 2007 is part of a planned series of cuts that would reduce fees paid to physicians by 40% over the next nine years. In recent years, Congress has been willing to postpone the cuts. Now, frustration is mounting at the AMA because that no longer seems to be the case.

“It is probably fantasy to think that we are going to be able to create a quality program in the next 30 days that is going to solve Medicare’s problem,” said one AMA board member, Dr. William A. Hazel Jr., an orthopedic surgeon in Herndon, Va. “Absent that, we need to get the payment problem resolved.

“The predicate for having a quality system is to have enough funding in the system for physicians to be able to afford to practice,” Hazel added. “We can’t take the hit now and be expected to offer better services.”


The AMA has also been disappointed trying to secure its top legislative priority: national limits on jury awards in malpractice cases. Despite administration support, doctors were unable to overcome Senate opposition.

On the payment issue, the organization is working with Medicare to design measurements of quality to serve as the foundation of a new fee system. But progress has been uneven; some medical specialty societies have come up with lists of potential benchmarks, but others are behind.

The chairman of the Senate Finance Committee, Sen. Charles E. Grassley (R-Iowa), has signaled that payment increases should be linked to reforms that reward quality. Grassley’s committee has jurisdiction over Medicare.

Medicare expects to pay doctors about $60 billion in 2007, using a fee schedule that reimburses physicians for services they perform.

Payments to physicians have been rising steadily in recent years, driven largely by the volume and complexity of services now performed in doctors’ offices.

But studies have shown no connection between more services and better health. Moreover, patterns of medical care seem to vary dramatically across the country.

A 2004 report by Dartmouth College health economists showed, for example, that higher spending did not necessarily lead to better outcomes; New Hampshire, which spent about $5,000 per Medicare beneficiary, had the highest overall quality ranking, while Louisiana -- which spent $8,000 per beneficiary -- had the lowest.

The cut scheduled for 2007 is part of an earlier, halfhearted attempt by Congress to control Medicare costs.


In 1997, lawmakers limited annual fee increases for doctors’ services, and mandated cuts if the limits were exceeded. Congress later went on to waive the cuts in most of the years they would have applied.

Congressional and administration officials agree that slashing fees 40% over the next nine years is not feasible. Nonetheless, physicians face a struggle trying to get next year’s 5% cut rescinded.

An AMA-sponsored poll released Thursday found 70% of the public had not heard about the cuts. But when told of them, nearly nine in 10 expressed concern that they would diminish seniors’ access to care.

Separately Thursday, polls of pharmacists and doctors found mixed reviews of the new Medicare prescription benefit.

Strong majorities said they believed the benefit was helping patients save money, but by even greater margins, doctors and pharmacists called the program too complicated.

Majorities of both groups said they had dealt with patients who had problems getting prescriptions, and some who suffered serious health setbacks as a result. The surveys were commissioned by the nonprofit Kaiser Family Foundation.