Reforming Medicare’s Physician Payment System

This past July, after intense lobbying from physician groups, Congress once again stepped in to prevent physicians who provide care to Medicare patients from seeing a 4.5% reduction in their fees.1 Congress appropriately feared the potential problems with access to care that could result from such a fee reduction. But although putting more money into the same broken physician-reimbursement system may buy lawmakers a little more time to address the need for a new one helpful only if they use it to set the direction for a new system it also makes the eventual solution even more expensive, since Congress has been providing funding only for the cost of the current year's fix, not for its ongoing costs. When the latest adjustment craters in January 2010, physicians' payments are supposed to revert to the lowest level they would have reached had it not been for the temporary patches; this would amount to a 20% reduction in fees. Although it is hard to imagine such a draconian cut actually occurring, it is even harder to envision what Congress is prepared to do in response to this latest threat.


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(Source: The New England Journal of Medicine, Perspective, Wilensky, Gail R., Reforming Medicare's Physician Payment System, N Engl J Med 2009 360: 653-655)