[Congressional Record Volume 151, Number 67 (Thursday, May 19, 2005)]
[Senate]
[Pages S5537-S5539]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KYL (for himself, Ms. Stabenow, Mr. Corzine, and Mr. 
        Talent):
  S. 1081. A bill to amend title XVIII of the Social Security Act to 
provide for a minimum update for physicians' services for 2006 and 
2007; to the Committee on Finance.
  Mr. KYL. Mr. President, I rise today to introduce the Preserving 
Patient Access to Physicians Act of 2005. This bill updates Medicare 
physician reimbursement for 2006 and 2007 according to the 
recommendations of the Medicare Payment Advisory Committee (MedPAC). 
There would be a 2.7 percent increase to the physician payment schedule 
for 2006 and using the Medicare Economic Index update for the price of 
inputs, a 2.6 percent increase in 2007.
  If the schedule is left alone, the consequences for physicians will 
be a negative. Instead of the 1.5 percent payment increase for 2004 and 
2005 which I helped author in the Medicare Modernization Act, there 
would be a 4.3 percent decrease.
  The sustainable growth rate (SGR) formula used to calculate physician 
payment depends on a number of factors: the number of Medicare fee-for-
service beneficiaries, the volume and type of services provided, the 
price of services rendered, changes in regulations and laws. The 
formula also incorporates other factors such as prescription-drug 
prices and the gross domestic product. The SGR was intended to control 
expenditures by basing a given year's physician payment rate on the 
previous year's performance. Instead, it creates an arbitrary 
deficiency that continues to force Congress to intervene.
  There is a debate going on, her CMS has the authority to alter the 
SGR formula by removing drugs. Setting that aside, though, the fact of 
the matter is that without Congress stepping in to provide for a 
physician payment update, it probably will not occur. My Senate 
colleagues and I have talked for many years about ensuring adequate 
physician payment because current and past administrations have failed 
to modify the formula. This formula is not doing what it was intended 
to do. Therefore, I believe we need to scrap it and start again. My 
bill is a starting point and proposes amounts for an update, but I 
would really like to see us go all the way back to the drawing board 
and answer the fundamental question of how to pay physicians 
appropriately for their services.
  I want doctors to be able to continue to assist our nation's seniors, 
but it is unfair to expect them to practice and to have their 
reimbursement decrease. Practice expenses, the costs of medical 
technology, wages for administrative and clinical staff, and medical 
liability premiums are all increasing while physicians are on track to 
receive a payment decrease. They cannot afford to continue practicing 
medicine while receiving reimbursements that do not allow them to even 
break even. Many are retiring early or threatening to limit the number 
of Medicare patients they treat.
  The service of physicians all across the country is vital to our 
seniors. Almost half a million doctors provide treatment to the 42 
million people under the Medicare program. Physicians are often the 
gateway for access to other medical services and treatments. Not being 
able to consult a physician results in delayed referrals, delayed 
treatment and delayed care. In sum, the quality of health care 
continues to erode and our system does not operate efficiently.
  Should the scheduled physician reimbursement cuts take effect, the 
result will be a $710 million decrease in payments to doctors in 
Arizona over 2006 through 2010. I have heard from virtually every 
physician with whom I have spoken about the constraints that inadequate 
payments are placing on their practice of medicine. While many work for 
hospitals and health systems, in the rural areas, a large number are 
solo practitioners or in small practices. For these physicians, poor 
payment hits their practice especially hard.
  If Medicare rates for doctors are inadequate, many other health care 
payors will also lack for adequate reimbursement. Other payors such as 
Medicaid and private insurers often base their payments on Medicare 
rates. While this bill only addresses Medicare physician payment, the 
problem of access to services will be compounded if physicians receive 
reimbursement from other payors that is below the appropriate levels.
  The cost of addressing the physician payment update is not cheap. 
Estimates on the cost of this bill are between $25 billion to $35 
billion over five years. I await an official score from the 
Congressional Budget Office. But I point out, that doing nothing to 
solve this problem may cost us more: more money, more health and access 
problems, and more physicians leaving the profession. Although this 
legislation provides for a two year update, we must develop a long 
range mechanism to pay physicians appropriately.
  I am grateful for the support of this legislation by my colleague, 
Senator

[[Page S5538]]

Stabenow of Michigan, and encourage my other colleagues to support the 
Preserving Patient Access to Physicians Act of 2005.
  I ask unanimous consent that a letter of support be printed in the 
Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                 American Medical Association,

                                        Chicago, IL, May 19, 2005.
     Hon. John Kyl,
     U.S. Senate, Hart Senate Office Building,
     Washington, DC.
       Dear Senator Kyl: On behalf of the American Medical 
     Association (AMA), we offer our strong support of your 
     legislation, entitled the Preserving Patient Access to 
     Physicians Act of 2005. We thank you for your leadership in 
     introducing this legislation and providing a remedy to the 
     steep Medicare physician payment cuts that are expected, 
     beginning January 1, 2006.
       The Medicare Trustees have recently predicted that Medicare 
     payments for physicians' services will be cut by about 26 
     percent from 2006 through 2011. These cuts will critically 
     impact access to medical services for our Nation's senior and 
     disabled patients. A recent AMA survey concerning physician 
     responses to significant Medicare physician pay cuts 
     beginning January 1, 2006 indicates that if these cuts begin 
     in 2006: 38 percent of physicians plan to decrease the number 
     of new Medicare patients they accept; more than half of 
     physicians plan to defer the purchase of information 
     technology; and a majority of physicians will be less likely 
     to participate in Medicare Advantage.
       The expected cuts result from the inherently flawed payment 
     update formula, the sustainable growth rate (SGR) spending 
     target. The SGR is linked to the gross domestic product and 
     penalizes physicians and other practitioners for volume 
     increases that they cannot control and that the government 
     actively promotes through new coverage decisions and other 
     initiatives that, while beneficial to patients, are not 
     reflected in the SGR.
       The AMA applauds your leadership in addressing these cuts 
     and introducing legislation that protects access to needed 
     medical care. Your bill would provide a positive physician 
     payment update of not less than 2.7 percent in 2006 and an 
     update in 2007 that reflects physician practice cost 
     inflation, which, at this time, is expected to be about 2.6 
     percent.
       Your bill is critical for ensuring continued and long-term 
     access to health care services for Medicare beneficiaries. We 
     look forward to continuing to work with you to achieve 
     enactment of your legislation, as well as long-term reform of 
     the update formula.
           Sincerely,
                                                 Michael D. Maves,
                                    Executive Vice President, CEO.
  Ms. STABENOW. Mr. President, I am very pleased to introduce the 
``Preserving Patient Access to Physicians Act'' with my friend and 
colleague from Arizona, Senator Kyl. This legislation is critical to 
ensuring that our Nation's 42 million Medicare beneficiaries continue 
to have access to high quality physician care.
  The Medicare program is one of the most successful Federal programs 
of all time. It has lifted countless seniors out of poverty, and it has 
ensured access to necessary, affordable, quality medical care for our 
most vulnerable citizens for the last 40 years.
  However, that success is threatened because the Medicare physician 
payment formula is fundamentally flawed. At a time when the doctors who 
treat our seniors are facing increasing practice costs, they are 
looking at a payment cut of 4.3 percent in 2006 for the Medicare 
services they provide that simply doesn't make sense.
  And the cuts don't stop in 2006: if Congress doesn't act, physicians 
will be hit with devastating cuts totaling 22 percent over the next 5 
years. Those cuts represent over $44 billion dollars nationwide, and a 
staggering $126 billion over the next 10 years.
  Currently, over 20,000 MDs and DOs in Michigan treat over 1.4 million 
Medicare-eligible Michiganians with very high quality care. But if the 
doctors in my State receive their scheduled cut of $109 million next 
year, and over $5 billion over the next ten years, it's not hard to 
imagine that they may be forced to limit the number of Medicare 
patients they serve.
  Numbers in the billions are indeed staggering--but the critical need 
for this legislation is even better demonstrated by getting down to the 
specifics: a Detroit physician currently is reimbursed $56.88 for an 
office visit. But while we all know medical inflation will continue to 
increase, under current law, that same physician will receive only 
$41.86 in 2011 for that same visit. And while an orthopedic surgeon in 
Detroit is now reimbursed $1,813.10 for performing a knee 
arthroplasty--a knee repair necessary to ensure full mobility--she is 
scheduled to receive $478.66 less for performing that same procedure in 
2011! The examples go on and on: a cardiologist inserting a stent in a 
Medicare patient to prevent heart problems receives $873.85 today. The 
same surgeon inserting a stent in 2011 will be reimbursed only $643.15.
  The ``Preserving Patient Access to Physicians Act of 2005'' provides 
physicians with a minimum update in 2006 and 2007. Specifically, the 
legislation overrides the Sustainable Growth Rate (SGR) formula in 
these years: the update to the single conversion factor in 2006 would 
be 2.7 percent, and a formula based on input prices and a productivity 
adjustment is used for 2007--the likely update for 2007 will be 2.6 
percent.
  Kevin Kelly, Executive Director of the Michigan State Medical 
Society, tells me that the minimum updates provided in this legislation 
are essential to both physicians and patients in Michigan in terms of 
assuring access to Medicare services.
  And Robert Stomel, D.O., President of the Michigan Osteopathic 
Association, said that introduction of this legislation ``is an 
important step in efforts to protect the availability and access to 
physician services for millions of Medicare beneficiaries.'' Dr. Stomel 
went on to say, ``This bipartisan legislation represents a continued 
recognition that physician payment under Medicare must keep pace with 
the increasing cost of providing care.''
  Yet I know that this is just the beginning. We cannot continue to use 
stop-gap measures but must replace the SGR with a payment system that 
actually makes sense and reflects the costs of providing physician care 
to Medicare beneficiaries.
  Through the bipartisan partnership Senator Kyl and I have begun 
today, we can--and must--fix the physician payment formula and continue 
to provide access to high-quality Medicare services for all of our 
seniors and people with disabilities.
  I ask unanimous consent to have printed in the record letters of 
support from the American Medical Association and the American 
Osteopathic Association.
  I urge my Colleagues to join us in this effort, and I thank the 
Chair.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:


                                 American Medical Association,

                                        Chicago, IL, May 19, 2005.
     Hon. Debbie A. Stabenow,
     U.S. Senate, Washington, DC.
       Dear Senator Stabenow: On behalf of the American Medical 
     Association (AMA), we offer our strong support of your 
     legislation, entitled the Preserving Patient Access to 
     Physicians Act of 2005. We thank you for your leadership in 
     introducing this legislation and providing a remedy to the 
     steep Medicare physician payment cuts that are expected, 
     beginning January 1, 2006.
       The Medicare Trustees have recently predicted that Medicare 
     payments for physicians' services will be cut by about 26% 
     from 2006 through 2011. These cuts will critically impact 
     access to medical services for our nation's senior and 
     disabled patients. A recent AMA survey concerning physician 
     responses to significant Medicare physician pay cuts 
     beginning January 1, 2006 indicates that if these cuts begin 
     in 2006: 38% of physicians plan to decrease the number of new 
     Medicare patients they accept; more than half of physicians 
     plan to defer the purchase of information technology; and a 
     majority of physicians will be less likely to participate in 
     Medicare Advantage.
       The expected cuts result from the inherently flawed payment 
     update formula, the sustainable growth rate (SGR) spending 
     target. The SGR is linked to the gross domestic product and 
     penalizes physicians and other practitioners for volume 
     increases that they cannot control and that the government 
     actively promotes through new coverage decisions and other 
     initiatives that, while beneficial to patients, are not 
     reflected in the SGR.
       The AMA applauds your leadership in addressing these cuts 
     and introducing legislation that protects access to needed 
     medical care. Your bill would provide a positive physician 
     payment update of not less than 2.7% in 2006 and an update in 
     2007 that reflects physician practice cost inflation, which, 
     at this time, is expected to be about 2.6%.
       Your bill is critical for ensuring continued and long-term 
     access to health care services for Medicare beneficiaries. We 
     look forward to continuing to work with you to achieve 
     enactment of your legislation, as well as long-term reform of 
     the update formula.
           Sincerely,
                                                 Michael D. Maves.

[[Page S5539]]

     
                                  ____
                             American Osteopathic Association,

                                     Washington, DC, May 19, 2005.
     Hon. Debbie Stabenow,
     U.S. Senate, Washington, DC.
       Dear Senator Stabenow: As President of the American 
     Osteopathic Association (AOA), I am pleased to inform you of 
     our strong support for the ``Preserving Patient Access to 
     Physicians Act of 2005''. The AOA, which represents the 
     nation's 54,000 osteopathic physicians practicing in 23 
     specialties and subspecialties, extends its sincere gratitude 
     to you for introducing this bill.
       The current sustainable growth rate (SGR) formula for 
     physician services under the Medicare program is broken. The 
     continued use of the flawed and unstable methodology will 
     result in a loss of physician services for millions of 
     Medicare beneficiaries. Physicians annually face reductions 
     in payment while their practice costs continue to rise. 
     Congress recognized this with the approval of the ``Medicare 
     Prescription Drug, Improvement, and Modernization Act of 
     2003'' (MMA) (P.L. 108-173) which replaced scheduled 
     physician payment reductions with modest increases of 1.5 
     percent per year for 2004 and 2005. Unfortunately, physicians 
     now face a projected reduction of 4.3 percent for 2006, with 
     additional reductions for the foreseeable future that could 
     amount to over 30 percent.
       Your legislation takes an important step to address the 
     projected 2006 and 2007 reductions in physician payment under 
     Medicare. Specifically, the bill would establish a minimum 
     physician payment update of 2.7 percent per year for 2006 and 
     2007. A minimum update of 2.7 percent will help ensure a 
     physician's continued ability to provide quality health care 
     services to Medicare beneficiaries.
       On behalf of my fellow osteopathic physicians, I pledge our 
     support for your effort to address the flawed Medicare 
     physician payment formula. We look forward to working with 
     you to advance this important legislation. Please do not 
     hesitate to call upon the AOA or our members for assistance 
     on health care issues. Contact the AOA's Department of 
     Government Relations at (202) 414-0140 for additional 
     information.
           Sincerely,
                                              George Thomas, D.O.,
                                                        President.
                                 ______