MGMA Decries Projected 2004 Medicare Payment Cut

ENGLEWOOD, Colo. -- In response to the negative 4.2 percent estimate for the 2004 Medicare physician payment update and the subsequent negative estimates projected through 2007 released by the Centers for Medicare & Medicaid Services (CMS), the Medical Group Management Association (MGMA) calls upon Congress to replace the deeply flawed sustainable growth rate (SGR) Medicare physician payment system immediately.

"Year after year the Medicare SGR system takes one step forward and two steps back," said MGMA president William F. Jessee, MD, CMPE. "The SGR system is fundamentally broken and must be replaced by an annual update system that takes into account real practice cost increases. It is unacceptable to retain a payment system that would set 2004 Medicare physician payments below where they were in 1998."

MGMA data from 1998 through 2001 show that operating costs increased an average of 4.72 percent per year for multispecialty group practices. Once data for 2002 and 2003 are available, MGMA strongly believes the same trend will continue and possibly accelerate. "While Congress made progress last year by passing legislation to allow CMS to fix its earlier incorrect estimates, full reform of the update system is the next step. It is critical to avoid further deterioration of the Medicare program next year," said Jessee.

A recent MGMA poll reported 52 percent of responding group practices plan to reduce the number of Medicare beneficiaries they treat if additional payment reductions occur.

"Decreasing Medicare reimbursement rates, increasing operational costs and skyrocketing professional liability insurance premiums are leaving physician groups across the country in peril. Many are at the crossroads concerning their current and future ability to provide access to Medicare beneficiaries," Jessee added.

The MGMA, founded in 1926, is the nation's principal voice for medical group practice. MGMA's 19,000 members manage and lead more than 11,000 organizations in which more than 220,000 physicians practice.

Source: MGMA