Committee evaluates impact of planned Medicare physician-fee cuts

May 13, 2008 — Because cuts to Medicare physician-fee payments threaten to undermine the work of small healthcare practices, members of the House Committee on Small Business heard from the Deputy Administrator for the Centers for Medicare and Medicaid Services (CMS) May 8. They also received testimony from a panel of healthcare providers, who noted the planned cuts would greatly limit services to the nation’s neediest communities.

“Undermining physicians who serve millions of disabled, elderly, veterans, and disadvantaged patients makes no sense,” said Chairwoman Nydia M. Velázquez. “There are enormous gaps in the American healthcare system, and these businesses are helping to fill them. Failing to recognize that fact flies in the face of what is needed.”

 Medicare provides health insurance for 43 million elderly and disabled people in the United States. CMS rules govern payments to their physicians and other medical providers for specific services. The amount paid by Medicare is scheduled to be cut by 10.6 percent at the end of June. 

“Seniors already have to call dozens of providers in hopes of finding one who will accept Medicare. If CMS pushes forward with these cuts, these patients will have even fewer choices. They are the ones who will pay the ultimate price,” said Chairwoman Velázquez.

Expenses, such as rent, payroll, health, and malpractice insurance, are expected to increase more than 20 percent over the next nine years. Witnesses explained that these rising costs would be compounded severely by fee cuts. That would force them to stop accepting new patients, postpone capital purchases for their practices, or forego new health technology altogether. Still other physicians would have to close down their businesses or retire early. 

“It’s time we consider what these cuts would mean for our society. If we keep making it harder for small medical practices to stay afloat, the family doctor could be a thing of the past,” said Chairwoman Velázquez.

 Source: House Committee on Small Business, www.house.gov/smbiz/