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AMA Says Medicare Doc Payments Only Small Factor in Part B Premium Hike

SEPTEMBER 19, 2005 -- Fearing its key lobbying goal for the year is now in even greater jeopardy, the American Medical Association (AMA) is hustling to keep Congress from fingering Medicare physician spending growth as the key culprit behind a big hike in beneficiary premiums announced Friday.

If Congress thinks rising Medicare physician spending is largely to blame for the 13 percent hike in monthly Part B premiums announced by Medicare, it may be more reluctant to pass legislation adding to that spending—namely, a measure sought by the AMA to prevent a scheduled 4.4 percent cut in Medicare payments to doctors next year.

Finding the billions of dollars needed to head off that cut will be a big enough challenge for Congress because of the huge amounts of money it plans to spend to assist efforts to recover from Hurricane Katrina. But if Congress thinks passing a new bill will drive Part B premiums far higher, the challenge becomes even more difficult for the AMA.

The Centers for Medicare and Medicaid Services said Sept. 16 that the Part B premium is rising 13 percent primarily because of a spending increase in Part B—the part of Medicare that covers various services other than inpatient hospital care.

But AMA Trustee James J. Rohack said late that day that "physician services account for less than one-fifth of [the] Part B increase." Other factors adding to higher Part B spending include clinical lab tests, payments to Medicare managed care plans, home care, ambulance services, and hospital outpatient services, he said.

Meanwhile, beneficiary complaints are growing about rising Part B premiums and other types of out-of-pocket costs Medicare patients must pay for treatment.

The giant senior lobby AARP is concerned about the cumulative effect of the Part B increase and other increases in cost-sharing, including a jump from $100 to $124 in the Part B deductible; a $40 increase in the deductible for beneficiaries who go to the hospital (to $952 in 2006), and the 40 percent that beneficiaries pay for hospital outpatient coinsurance, said Kirsten Sloan, the group's national health coordinator.

The Medicare Rights Center, an independent New York City–based group that counsels Medicare beneficiaries on their rights under the program, said the $10 increase in the Part B premium will "triple the cost of living increase people with Social Security can expect in 2006." Robert Hayes, the center's president, said that as a result, "more men and women will face harsh choices in meeting basic human needs of health, food, and housing."

Hayes faulted the administration for saying one in four beneficiaries can get help paying for Part B premiums. He said "bureaucratic hurdles" prevent many of those eligible for the assistance from actually receiving it. "The administration should not hide the hardship these increases will cause our parents and grandparents," Hayes said.

But the AMA is seeking to play down concerns about the impact of rising physician spending on the Part B premium not only by noting its limited impact, but also by noting that payment cuts will harm beneficiary access to physician care.

Rohack said access to care "will be in serious jeopardy" unless Congress and the Medicare program act to prevent scheduled cuts totaling 26 percent over the next six years.

"The cost of running a practice and caring for patients will go up 15 percent during that time, forcing many physicians to make the difficult decision to stop taking new Medicare patients into their practices," Rohack said.

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