Potential delay in Medicare Physician Fee cut could lead to even higher cuts

Senate Finance Committee Chair Max Baucus, D-Mont., has outlined a package of Medicare legislation that would delay the impending Medicare Physician Fee cuts until 2010, and immediately increase physician payments by 1.1 percent. However, the proposal would use balloon financing, potentially producing physician payment cuts of 21 percent in 2010.

The proposed plan would delay for 18 months a 10 percent Medicare physician payment cut, scheduled to take effect July 1. The bill would cost about $8.4 billion over five years; halting the cuts without the increase would cost about $8 billion, according to CQ Today.

Baucus said that he would not allow the large pay cut to take place in 2010 and that next year he would address the Medicare physician pay funding mechanism more broadly. He also wants to increase Medicare payments to primary care physicians and link reimbursements to quality of care as provisions of the Medicare package, which he plans to have on the Senate floor by mid-May, CongressDaily reported.

The Medicare Payment Advisory Commission (MedPAC) has expressed concern that Medicare and the United States generally will face a shortage of internists and family practitioners and it feels that a pay increase would help bolster the number of PCPs, who receive relatively lower salaries than specialists, causing fewer medical students to choose primary care.

Also on the legislative table is the Physician Shortage Elimination Act, which would provide scholarships to medical students and expand residency training programs. According to state medical societies, by 2020 the United States could face a shortage of up to 200,000 physicians as the population is expected to grow by 24 percent and the number of baby boomers who are eligible for Medicare increases, the Orlando Sentinel reported.

Baucus also outlined a few other provisions he would like to appear in the bill, one of which would give physicians incentives for using e-prescribing and other types of EHRs.

Another would increase or expand the physician quality reporting initiative, which increases payments for reporting quality data, according to CQ Today.