Medicare Physician Payment Advisory Commission Suggests a 2.7 Percent Increase to Medicare Physician Payments in 2006

Physicians serving Medicare patients received a glimmer of hope this month when MedPAC, the Medicare Physician Payment Advisory Commission, suggested a 2.7 percent increase in reimbursements for physicians who serve Medicare’s senior and disabled patients. This news conflicts with the Medicare program’s trustees who predicted a 5.2 percent cut next year. If this suggestion is considered and enacted by Congress, the new MedPAC recommendation will go a long way to secure patients' access to care. Every year, Medicare physicians and their patients must rely on Congress to approve the Medicare physician payment formula projections. The underlying formula that set Medicare payments for physicians, known as the Sustainable Growth Rate (SGR), is fundamentally flawed because it is inappropriately tied to the ups and downs of the economy – not the health care needs of America’s seniors. Under the current Medicare physician formula, the Medicare Trustees have predicted payment cuts totaling 31 percent over the next eight years – while at the same time the costs of running a practice and caring for patients will go up 19 percent.