As you might recall, in late December Congress passed a stop gap measure that gave Medicare physicians a six-month reprieve from the 10 percent cut that was scheduled to go into effect Jan. 1. However, without congressional action, the Medicare physician payment rates will be reduced 10.6 percent on July 1 with an additional 5 percent on Jan. 1, 2009.

If these cuts are allowed to take effect, Minnesota physicians will lose $150 million for care of elderly and disabled patients over 18 months from July 2008 through December 2009. On average, each Minnesota physician faces a Medicare cut of $11,000 over this 18-month period. Minnesota physicians also face an additional cut of 0.4 percent on top of the 10.6 percent cut. The 2003 Medicare law provided a temporary increase in geographic payment adjustments for certain states like Minnesota. This increase also expires on June 30 under current law.  

It is critical that Congress take action. An American Medical Association survey revealed that such cuts would result in many physicians reducing the number of Medicare patients they see or in not accepting Medicare patients at all. Half of the physicians surveyed reported that they would not be able to meet their payrolls and would have to reduce their staff if these cuts go into effect.

In addition to generating the pending steep pay cuts, the formula:

• has kept average Medicare physician payment rates about the same as they were in 2001 
• prevents physicians from making  needed investments in staff and technology to support quality measurement 
• discourages initiatives that result in greater use of preventive care in order to reduce hospitalizations 
• continues to threaten access to care for Medicare patients particularly in rural areas, which tend to have a disproportionately larger number of seniors
• has led to severe shortfalls in Medicare's budget for physician services. (Congress has enacted short-term interventions at the cost of a long-term solution.)

Senate File 2785, “The Save Medicare Act of 2008,” would stop the Medicare physician payment cuts for 18 months, long enough to begin working on a long-term solution to the flawed payment formula. We urge you to contact Senators Norm Coleman and Amy Klobuchar to support this important legislation.