The AMA has advocated for Medicare payment reform for well over a decade, but the need for change is becoming greater than ever, according to AMA President-elect Bruce A. Scott, MD.
Medicare physician payments have risen by just 9% since 2001, and when adjusted for inflation, they have actually fallen by 26%. The cost of running a practice, meanwhile, has increased by 47% during that same time period.
Those disparities are not sustainable, said Dr. Scott, an otolaryngologist from Kentucky.
"Unless we change course," he said, "continued access to quality, affordable care will be jeopardized for tens of millions of patients who need it most."
Dr. Scott talked about Medicare physician payments and why the topic is so important in a recent episode of “AMA Update.”
Learn about how you can take part in the fight to fix Medicare on behalf of your patients and practices at the AMA's Fix Medicare Now website.
Leading the charge to reform Medicare pay is the first pillar of the AMA Recovery Plan for America’s Physicians.
The AMA has challenged Congress to work on systemic reforms and make Medicare work better for you and your patients. Our work will continue, fighting tirelessly against future cuts—and against all barriers to patient care.
Explaining the payment reality
While most physicians understand the need for Medicare payment reform, it also is important for patients to understand the issue and advocate for change, Dr. Scott said. That process begins with squashing some myths about medical bills.
For example, some patients believe the entire payment of a medical bill goes directly into a doctor's bank account. That is false, Dr. Scott noted.
"The payment doesn't just go into the physician's pocket," he said. "It pays for the increasingly expensive supplies [and] all the equipment we use. It supports the entire practice, our staff and literally keeps the lights on."
One way physicians can educate patients about this reality is through personal stories. Dr. Scott shared his own experience about working in an independent private practice in Louisville, Kentucky. He performed a tonsillectomy—a procedure that costs thousands of dollars—and noted that his practice would be paid less than $300 for the surgery and associated post-operative care.
"We're struggling to remain financially viable in large part because of Medicare reimbursement stagnation over two decades," he said. "Like everyone else, our employees are feeling the sting of inflation. On almost a weekly basis, one or more of my employees come to me telling me that they need a higher pay to cope with the cost of living, the cost of gasoline, the cost of groceries.
"Yet, the reimbursement we receive from Medicare and from third-party payers hasn't risen accordingly."
The AMA’s Medicare Basics series provides an in-depth look at important aspects of the Medicare physician payment system. Through straightforward explanations, policymakers and physician advocates can learn about key elements of the payment system and why they are in need of reform.
Pushing for change
The goal with fixing the Medicare pay system is to provide physicians with predictable, sustainable and fair payment.
One effort that is already in the works to make that happen is the Strengthening Medicare for Patients and Providers Act, a bipartisan bill (H.R. 2474) that seeks to institute an annual inflation-based update to physician payment rates.
"That would actually help reflect the rising cost of care," Dr. Scott said. "The introduction of this bill is a strong first step and we're continuing to meet with representatives to strengthen our support."
Payment rates are not the only issue physicians face from Medicare. The average physician spends about 200 hours per year complying with the Medicare Merit-based Incentive Payment System, a program that helps determine Medicare payment adjustments.
"We face a physician shortage, and yet physicians are being burdened, using their time to fill out forms and do administrative work that Medicare has forced upon us," Dr. Scott said. "Imagine if those 200 hours of busy work each year could be put back into patient care."
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