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Congress Cuts Medicare Payments To Physicians By 10.6 % Starting July 1st

Congress failed to pass a measure to block a steep reduction in the Medicare physician payment rate before adjourning for a weeklong July 4 recess. That failure allows a 10.6 percent cut to take effect on July 1 that could end up limiting or denying care to millions of Medicare beneficiaries.

‘The impact of this failure goes beyond the medical community; it threatens Medicare beneficiaries’ access to health care because it further drives family physicians toward financial insolvency,” said AAFP President Jim King, M.D

To illustrate the emergence of those patient access problems, King cited a March 2008 report from the Medical Group Management Association stating that nearly 24 percent of physicians in all specialties had begun limiting or not accepting new Medicare patients. That same report noted that 46 percent of physicians said they would limit or stop accepting new Medicare patients if the 10.6 percent pay cut scheduled for July 1 went into effect.

“Family physicians have worked tirelessly on behalf of Medicare patients,” King said. “Despite those efforts, family physicians have struggled with 20 percent inflation in costs for office space, equipment, supplies, health and administrative staff, medical liability insurance and other costs of business since 2001.

“During that time, their Medicare compensation for their services has stagnated. No small business — as most family physician practices are — can sustain that kind of loss and remain open to care for people.”