MMA News
Medicare Cut Delayed for Six Months
In a last-minute deal, Congress passed a six-month reprieve from a 10 percent cut in Medicare payments to physicians that was scheduled to take effect January 1.
The bipartisan measure includes a payment increase of 0.5 percent for physicians for six months. Passage of the stop-gap measure means Congress will have to tackle the issue this spring in order to prevent the previously scheduled 10 percent cut from taking effect July 1.
The legislation also continues funding the State Children’s Health Insurance Program at the current level of enrollment through March 31, 2009, according to the American Medical Association.
MMA President James J. Dehen Jr., M.D., was pleased with the 0.5 percent increase but admonished Congress for failing to fix the problem.
“They keep patching a flawed formula,” Dehen says. “While we are not going to scoff at a pay increase, it doesn’t address the problem of the Sustainable Growth Rate formula. Congress really needs to focus on fixing this formula.”
The AARP, which has supported doctors in their efforts to stop the scheduled 10 percent cut, described the short-term fix as woefully inadequate, in an Associated Press article.
“Enactment of this legislation does little to protect millions of Medicare beneficiaries from higher monthly premiums and only temporarily averts the problems beneficiaries would face finding a physician if payment cuts take place,” David Sloane, the AARP’s director of government relations, said in the story.
The AARP, the MMA, and the AMA supported a proposal by Democrats to prevent the physician payment cut by reducing Medicare Advantage subsidies to insurers. However, the Bush administration threatened to veto that proposal.
The physician pay increase in the compromise proposal is partially funded by $1.5 billion that is scheduled to be trimmed from the stabilization fund for regional preferred provider organizations in 2012. This fund provides payments to some insurers who operate in underserved areas.
The compromise also extends a provision that provides a 5 percent bonus payment through June 30, 2008, to physicians practicing in areas with few physicians and extends for six months a nearly 0.5 percent payment adjustment for Minnesota that helps eliminate a payment disadvantage the state suffers compared to other states, according to the AMA.
MMA Urges Governor Not to Divert Sick Tax Funds
MMA President James J. Dehen Jr., M.D., sent Gov. Tim Pawlenty a letter on behalf of the MMA in December asking him not to use money from the Health Care Access Fund (HCAF) to fix an expected budget shortfall.
The letter was sent in response to predictions by Minnesota finance officials that the state could face a $373 million budget shortfall because of a slowing economy.
Pawlenty hinted at the possibility of tapping surpluses in the state’s health and welfare funds in a Pioneer Press article about the expected budget shortfall.
The HCAF is expected to generate a surplus of about $250 million in 2008 and nearly $300 million in 2009.
In the letter, Dehen reminded Pawlenty that physicians consider the provider tax to be unfair and would like to see it repealed. He also pointed out that physicians believe funds raised by the tax should not be used to prop up the state’s general fund.
“While we know that all options to balance the budget must be considered,” Dehen stated in the letter, “we would strongly urge you to avoid looking to the state’s Health Care Access Fund to solve this problem.”
He also reminded Pawlenty of the views he expressed while campaigning for his second term as governor. When Pawlenty met with the MMA in 2006 to discuss how HCAF dollars were used to alleviate the last budget deficit, he acknowledged that he wished he didn’t have to use money from the fund but had little choice in the matter. “This time around, we hope you will remember the anger that this action caused within the health care provider community,” Dehen wrote.
Finally, the letter emphasized that with Minnesota’s uninsured rates increasing, this is no time to divert HCAF revenues from their original purpose.