AMA Predicts 'Medicare Meltdown' If Payments to Doctors Are Cut

The American Medical Association says many doctors may be forced to stop treating Medicare beneficiaries if Congress fails to reverse cuts in physician reimbursements scheduled to take effect November 1.

In January, Medicare payments to physicians were cut 5.4 percent and payments will be gradually reduced by another 12 percent between November 1, 2002, and 2005. The AMA says the latest reductions could reduce provider payments by $11 billion over the three years. A series of cuts in payments to home health care providers, physical therapists and others who treat Medicare beneficiaries already took effect October 1.

The AMA predicts a 'Medicare Meltdown' if the cuts are not reversed. 'Congress must act in the next few days to stop Medicare payment cuts and keep the Medicare program strong for America's seniors,' said AMA President-elect Dr. Donald Palmisano. "Time is of the essence. ... This is a crisis of great proportions and it will directly affect the health of America''s seniors."

Legislators are trying to win passage of a Medicare "giveback" bill that passed the House and is sponsored in the Senate by Sens. Max Baucus (D-Mont.) and Charles Grassley (R-Iowa). The bill, which would include smaller than planned reimbursement reductions, has become bogged down in the fight over prescription drug benefits for Medicare recipients.

There is also a dispute over whether the Bush administration has the power to unilaterally postpone the cuts in doctor payments. The administration claims it cannot legally do this, but others say the administration has the power to correct "technical errors" in the payment formula. While earlier showing a lack of concern over whether or not Congress passed the proposed giveback legislation, the administration now says it is "very concerned" about the problem.

Read a follow-up article in the New York Times. (This link may be only temporarily available.)