August 1, 2007

Physicians Could See 10 Percent Pay Cut

In what has become an annual ritual, physicians once again are facing a cut in Medicare reimbursement, but Congress once again is expected to block it and pass a small increase instead.

This year’s proposed cut is nearly 10 percent, according to the formula known as the sustainable growth rate (SGR). While physician payments were cut in 2002, Congress has intervened to prevent the cuts for the past five years. Congress has not yet dealt with the fundamental flaws in the SGR, however. The Congressional Budget Office estimates that replacing the SGR with a formula that allows payment rates to increase by the rate of medical inflation would cost $218 billion over 10 years.

Congress is considering changes to the SGR as part of a multi-pronged bill, known as the Children's Health and Medicare Protection (CHAMP) Act.  The CHAMP Act includes a .5 percent increase in Medicare physician payments, and also breaks the SGR up into six separate formulas that group similar physician services together.  These changes would cost significantly less than a full scale repeal of the SGR.

IDSA supports the bill, with a few reservations. IDSA’s letter to key Congress members on the issue is online, and go to IDSA’s Advocacy Center to urge your legislators to support the CHAMP Act.a

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