[Congressional Record (Bound Edition), Volume 151 (2005), Part 7]
[Extensions of Remarks]
[Pages 9800-9801]
[From the U.S. Government Publishing Office, www.gpo.gov]




      THE ``PRESERVING PATIENT ACCESS TO PHYSICIANS ACT OF 2005''

                                 ______
                                 

                        HON. BENJAMIN L. CARDIN

                              of maryland

                    in the house of representatives

                          Monday, May 16, 2005

  Mr. CARDIN. Mr. Speaker, I rise today to join my colleague, 
Representative Clay Shaw, to introduce the ``Preserving Patient Access 
to Physicians Act of 2005.''
  This is an issue of great importance to Medicare beneficiaries and to 
the providers who care for them. Under current law, physicians are 
reimbursed according to a payment formula that uses the Sustainable 
Growth Rate (SGR). This formula led to a 5.4 percent cut in payments in 
2002. Additional cuts in 2003, 2004, and 2005 were averted only after 
Congress intervened. The most recent short term intervention--in the 
2003 Medicare Modernization Act--will expire in seven and a half months 
on January 1, 2006. If Congress does not act soon, a 4.3 percent 
across-the-board cut will be imposed for 2006 and between 2007 and 2012 
cuts would total approximately 30 percent. To restore predictability 
and stability to providers, Congress must devise a permanent solution 
that will stave off this impending crisis and its potential impact on 
beneficiaries' access to care.
  The current physician payment formula is flawed for two primary 
reasons: first payment rates are calculated by using the SGR, which is 
in turn tied to our Nation's Gross Domestic Product (GDP). When the 
economy softens and GDP declines--unless physician volume and costs 
decline correspondingly--physician payment updates will be decreased. 
But this is a faulty measure of appropriate utilization, because the 
health care needs of our seniors do not decline during economic 
downturns. We faced such a situation in 2002, when the economy faced a 
downturn, yet the rising costs of caring for beneficiaries continued to 
rise. As a result, CMS cut the physician update by 5.4 percent.
  Furthermore, the SGR system fails to recognize that several factors 
driving volume and cost increases are beyond providers' control. These 
include administrative coverage decisions that promote greater use of 
physician services, increases in the cost of the physician-administered 
drugs, and the addition since 1997 of valuable, life-saving preventive 
benefits, including mammograms, pap smears, colorectal and prostate 
cancer screening, and bone mass measurements for osteoporosis. In 
addition, the 2003 MMA added a physical examination for new 
beneficiaries, cholesterol and lipid screenings, and limited 
prescription drug coverage.
  As a result of these initiatives, beneficiaries will visit their 
physicians more often-to get prescriptions for newly-covered drugs, to 
be monitored for drugs' side effects, to receive newly-covered 
preventive services, or to receive follow-up care for conditions 
diagnosed by these services. These costs must be taken into account in 
determining payment updates for physicians. Physicians should not be 
penalized for increases in volume resulting from Congressional 
initiatives.
  The volatility of Medicare reimbursement jeopardizes the ability of 
physician practices to make sound long-term financial decisions. Many 
physicians in my home State of Maryland are beginning to limit the 
number of Medicare patients they treat. Cuts in Medicare payments also 
jeopardize access to care for our military families and retirees, 
because the TRICARE program sets its rates based on Medicare's. In 
addition many State Medicaid programs and other third party payers rely 
on Medicare's system to set their rates.
  Congress must replace the SGR with a methodology that assures 
adequate and appropriate payments as well as a stable updates for 
Medicare providers. The Medicare Payment Advisory Commission in its 
March 2005 report and recommends implementation of a system where 
updates are based on a fair assessment of practice costs and adequacy 
of payment rates.
  The Preserving Patient Access to Physicians Act of 2005 would set the 
Medicare physician payment update for 2006 at no less than 2.7 percent, 
in accordance with MedPAC's recommendation. For 2007 and beyond, it 
would replace the flawed physician payment formula with a new formula 
that increases the update to reflect changes in the cost of providing 
care. There is bipartisan agreement that Congress needs to fix the 
physician payment formula permanently. Unfortunately, budgetary 
constraints have limited us to only short-term fixes. Our nation is 
facing a $7 trillion debt, and this year's budget deficit exceeds $500 
billion. Given our Nation's fiscal situation and the budget rules on 
Congress, the likelihood that Congress will enact a permanent fix this 
year is diminished. But each year that we delay increases the ten-year 
cost of the bill, and Congress must move beyond a band-aid approach to 
a more comprehensive, responsible and permanent solution to this flawed 
payment system. This is an ambitious bill, but one that I believe is 
necessary to initiate serious debate on this matter. Congress must make 
sure that the enactment of a solution for physician reimbursement is 
done in a fiscally responsible manner.
  MedPAC's March 2005 report also notes that neither the SGR nor any 
previous mechanism has been successful in moderating growth of 
physician services through the use of volume targets. Specifically, 
according to MedPAC, ``volume has continued to grow and

[[Page 9801]]

legislated targets have not succeeded in differentiating between 
beneficial volume growth and increases in inappropriate services. The 
current sustainable growth rate (SGR) formula has resulted in both 
budgetary and policy problems.'' Congress must devise a way to control 
unwarranted growth in services without compromising the delivery of 
needed medical care.
  I also want to address an issue of great importance to our 
beneficiaries--rising Medicare premiums and copayments. Increases in 
Medicare Part B premiums are set by law based on the actuarial value of 
the coverage. Increases in Part B costs in turn increase the monthly 
premiums and copayments that beneficiaries must pay. I recognize that 
this bill is no exception to the rule. CMS has just reported that 
monthly premiums for Part B will rise to an estimated 14 percent to 
$89.20 in 2006, largely because of an unexpected 15 percent increase in 
spending on physician visits and other outpatient services in 2004. 
According to CMS, the higher spending levels can be attributed to 
longer office visits, more services provided, an increase in laboratory 
tests and imaging services, and higher use of physician-administered 
drugs. CMS also reported that enrollment growth and a 1.5 percent 
increase in Medicare physician reimbursements last year were not 
significant factors in the overall spending increase.
  The annual cost-of-living increases in our seniors' and disabled 
persons' Social Security checks are not sufficient to cover rapidly 
increasing Medicare premiums. Furthermore, because the prescription 
drug coverage enacted in 2003 will be administered by private plans 
that will set their own premiums, seniors do not know what they will 
have to pay for a drug plan premiums next year or in the years to come. 
So, in addition to fixing SGR, Congress must also act to protect 
beneficiaries from sharp increases in premiums. We must make sure that 
seniors do not pay the price for appropriate increases to health care 
providers. As a member of the Ways and Means Committee, I will continue 
to work with my colleagues and with all groups who want to preserve 
access and affordability for beneficiaries while achieving fairness in 
our reimbursement system.
  I urge my colleagues to cosponsor this important legislation.

                          ____________________