American College of Physicians: Internal Medicine — Doctors for Adults ®

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Medicare reforms must address medical liability, physician pay

From the July-August ACP Observer, copyright 2003 by the American College of Physicians.

As Congress debated Medicare reform legislation earlier this spring, the College called on legislators to address two issues in any potential bill: physician reimbursement and medical liability.

With the House and Senate working to pass Medicare reform legislation before July 4, ACP mounted an all-out effort to make sure that legislators address these issues. The College joined two large groups in drawing legislators' attention to topics that are critical to all physicians.

Here is more information on what ACP said must be part of any Medicare reform package:

  • Medical liability. In a May 29 letter to the chairs of the House Ways and Means Committee and the House Energy and Commerce Committee, ACP joined 49 other members of the Health Coalition on Liability and Access (HCLA) in outlining the need for reforms to the medical liability system.

    The letter pointed out that patients are victimized by the crisis when physicians who cannot purchase medical liability insurance are forced to curtail services, leave crisis states and give up the practice of medicine altogether.

    The group said that reforms contained in the HEALTH Act of 2003 (H.R. 5) would help stabilize the current crisis in health care liability. The letter cited estimates from the Congressional Budget Office that show reforms in the bill would save the government nearly $15 billion over the next 10 years.

    For more information, the letter is online.

    In a May 5 letter, ACP and the HCLA outlined recent survey findings in an effort to convince the Senate to support liability reforms.

    The letter cited data from a recent AMA survey that found nearly 65% of high-risk specialists have changed their practice as a result of liability insurance problems. Nearly one-quarter of those physicians said they have stopped delivering babies and providing emergency and trauma care.

    The letter also cited a recent poll conduced by Wirthlin Worldwide, which found that 84% of Americans are concerned that liability insurance problems could affect their care. The poll also found that 76% favor a federal law that guarantees patients full payment for lost wages and medical costs, as well as limits on awards for pain and suffering.

    The letter is online.

  • Physician reimbursement. In a June 3 letter to all members of Congress, ACP joined a group of 77 medical organizations urging legislators to change the formula used to determine Medicare pay for physicians.

    The letter pointed out that the Centers for Medicare and Medicaid Services (CMS) has cut physician reimbursement four times since 1991. It also noted that between 1991 and 2003, physician pay fell at least 14% when compared to the costs of running a practice.

    The 4.2% cut that government actuaries project for next year, the groups said, would widen the gap between practice costs and reimbursement to 19%. (CMS predicts that physician pay will also take a hit in 2005, 2006 and 2007.)

    In determining Medicare pay, the government includes factors like the performance of the nation's economy. To keep Medicare's growth budget-neutral, federal laws say any rise in the volume of physician services must be offset by cuts to physician pay the following year.

    The letter pointed out that this formula punishes physicians when Medicare services grow faster than economic indicators.

    For more information, the letter is online.

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