TALKING POINTS The following are suggested talking points to use in communications with members of Congress. ACC members are encouraged to personalize these messages as much as possible. While some general examples of the impact of the reimbursement reductions are provided in these talking points, ACC members should include specific examples about how the cuts have affected their practice and ability to care for patients. The problem Physicians and other health care providers took a steep cut in Medicare reimbursement effective Jan. 1, 2002. Reductions to cardiovascular specialists averaged 8.6 percent, with even greater reductions among cardiovascular subspecialists like those who perform angioplasty procedures and treat heart rhythm disorders. The impact of these cuts is already being felt. Some physicians have been forced to stop taking Medicare patients. Meanwhile, some physicians—frustrated by continually decreasing reimbursement, increased medical liability insurance costs, and overly burdensome regulatory requirements—are retiring early. Some cardiovascular specialists report having to close blood pressure and cholesterol clinics, forego the purchase of new equipment, lay off staff, and cut back on continuing education. Practices in some areas of the country, such as Pennsylvania and Washington State, are also having terrible times recruiting new physicians to treat a growing number of patients because they cannot afford to pay them a competitive salary. The source of the problem The cause of the reduction is a flawed formula used by the Centers for Medicare and Medicaid Services (CMS) to calculate annual physician payment updates. Without a change in the formula, the Medicare physician payment update will be reduced by 14.2 percent over the next three years. A principle failing of the formula used by the CMS to update physician payments each year is that it is tied to the growth in the gross domestic product (GDP). The GDP is not an accurate measure of the costs of providing medical services to Medicare beneficiaries, and fluctuations in the GDP cause volatile swings in payment updates, as evidenced this year. Furthermore, tying reimbursement to the GDP penalizes physicians in this country for the decline in the nation’s economy at a time when there is an increase in Medicare utilization and increased professional liability insurance costs. In addition to not accounting for the costs of providing medical services, the current formula also does not take into account the cost of new, often life-saving technologies, which physician practices must absorb. Another important component of this problem are the significant actuarial errors made by the CMS in 1998 and 1999. At that time, Medicare officials omitted the cost of care for one million Medicare beneficiaries because of erroneous estimates of GDP growth and fee-for-service enrollment. As a result, the payment calculations are made as if these one million beneficiaries do not exist— even though these beneficiaries are clearly visiting physicians and receiving services. In addition, the CMS includes the cost of drugs administered in physician offices in calculating the physician spending targets included in the update formula. As a recent legal analysis funded by a number of physician organizations showed, drugs should be removed from the spending targets because they do not constitute “physician services.” It is estimated that if the estimation errors were corrected and the cost of outpatient administered drugs were dropped from the formula, approximately $62 billion over 10 years would be restored for physician spending. Request to Members of Congress I urge you to support legislation that would prevent future cuts in physicians' Medicare fees. In addition, Congress should continue to urge the Bush administration to make important administrative changes that affect physicians' Medicare fees, including correcting the 1998 and 1999 Medicare enrollee estimation errors and eliminating the cost of outpatient-administered drugs from the Medicare Fee Schedule update formula.
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