In a late vote last night the U.S. Senate decided against postponing a scheduled 21% reduction in Medicare reimbursements to physicians and health providers. This means that, effective immediately, those who deliver care to Medicare patients will be seeing significantly reduced payments from the Center for Medicare and Medicaid Services (CMS). Why the immense cut in physician reimbursement? The problem dates back to 1997 when Congress passed a balanced budget law which put into effect a formula used to calculate how much doctors get paid for services rendered. The idea was that if doctors collectively cost Medicare too much in one year, their pay would be docked to make up the difference in future years. However, these pay cuts have been postponed year after year until it blossomed into the 21% pay cut we are talking about today. Many argue that this is the result of the formula being flawed. According to James Rohack, president of the American Medical Association (AMA), "We want to keep people healthy, and this formula penalizes [doctors] for doing the quality care you want." For example, he says, "by keeping people's blood sugars under control, or helping them stay out of the hospital when they have heart failure," doctors may save Medicare money overall, but run up overall physician spending that then triggers future physician pay cuts. In a survey of 9,000 members of the American Medical Association (AMA), 17% of physicians (31% of those in primary care) stated they would reduce and limit the number of Medicare patients they see if Medicare reimbursements were too low.
