The AMA on Feb. 10 testified before the U.S. House Ways and Means Subcommittee on Health to renew the call to replace the broken Medicare physician payment formula.
The AMA informed the subcommittee that cumulative physician payment cuts of 31 percent, expected to take effect in January 2006, would seriously threaten patient access to care. The AMA believes that Congress and the administration must act now to replace the current physician payment formula, as recommended by MedPAC, (Medicare Payment Advisory Commission.) The AMA has been working with the Centers for Medicare & Medicaid Services to identify administrative actions that will prevent payment cuts. One such way is for the administration to remove prescription drugs administered in physician offices from the payment formula while Congress works on replacing the formula.
The AMA has also taken the lead in developing evidence-based quality improvement measures to improve quality and efficiency in the Medicare program. However, to truly improve quality in the Medicare program, policymakers must first provide stable economics for the physicians who treat Medicare's seniors to ensure access to care. The AMA believes that it is critical to replace the flawed physician payment formula to allow quality initiatives to advance. It will be difficult for physicians to undertake initiatives like working with information technology if they continue to face large payment cuts.