Support Medicare Physician Payment System Reform

Subject: Support Medicare Physician Payment System Reform

Dear [ Decision Maker ],

As you know, Congress voted in December to delay, for six months, a mandated 10.1% Medicare physician pay cut scheduled to take effect January 1 and to substitute a 0.5% increase -- setting the stage for the larger, 10.6%, cut slated to kick in July 1.

The Sustainable Growth Rate formula, or SGR, mandates cuts in payments whenever increases in expenditures for these services outstrip growth in gross domestic product. Each year for the last several years Congress has blocked SGR-mandated cuts, providing a short-term fix, but setting the stage for even larger cuts in subsequent years.

The SGR has proven to be neither sustainable for physicians nor fair for older Americans. As a constituent, I ask you to act to block the pending 10.6 % cut slated to take effect July 1 and work to overhaul the current flawed Medicare reimbursement system. America needs a payment system that rewards improvements in quality and services.

In a survey released in March 2008 by the Medical Group Management Association (MGMA), nearly half of the more than 1,000 practices responding reported that a 10.6% cut in Medicare physician payments scheduled to take effect July 1 has lead them to stop accepting or limit the number of beneficiaries they accept. Half of the practices said they were considering reducing administrative and clinical staff and more than two-thirds indicated they would forgo or postpone investments in health information technology.

According to the AMA, scheduled SGR adjustments will amount to a 40% payment cut for providers over the next nine years. During that same period, doctors expect their practice expenses to rise about 20%.

Thank you for your commitment to improving the health and wellbeing of older Americans. Should you have questions about this important issue, please have your staff contact Anne Marie Evriviades (212-308-1414) at the American Geriatrics Society.