[Congressional Record (Bound Edition), Volume 152 (2006), Part 17]
[Senate]
[Page 22654]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                MEDICARE

  Mr. BINGAMAN. Mr. President, I want to speak briefly about two 
issues, legislative issues, that still require attention before this 
Congress adjourns. The first is related to Medicare cuts. Effective 
January 1, Medicare reimbursement to health care providers is scheduled 
to be cut by 5 percent. I believe it is imperative that Congress step 
in and prevent that cut from occurring. Failure to do so will lessen 
access to quality health care for many in this country.
  The sustainable growth rate, the SGR, as it is referred to here in 
Washington more commonly, was implemented in 1998 as a means to 
annually adjust Medicare's physician fees in line with a set of 
spending targets. Until 2002, the total physician spending was below 
the set targets, so physicians received an annual increase in their 
fees. However, starting in 2002, the trend was reversed. Spending on 
physician services began to exceed the target. The result was a 4.8 
percent reduction in physician fees in 2002 and the realization that 
the SGR, or this sustainable growth rate formula, was flawed.
  This was the beginning of what has become a yearly game of 
brinksmanship, and we are in that game of brinksmanship again today 
with Medicare threatening to enact the cuts deemed appropriate by the 
SGR formula and Congress averting the fee cuts one year after another.
  As of January 1 of next year, physician fees will be cut by 5 
percent. In my view, this is causing understandable concern in the 
medical community. I hear on a daily basis from physicians, both within 
and without my State of New Mexico, that these cuts will adversely 
affect patient care and access. I have no reason to doubt that 
statement. The Albuquerque Journal in my home State of New Mexico 
reports that the proposed cuts will cost New Mexico doctors $12 million 
in 2007 alone. Presbyterian Health Plan president David Scrase believes 
the cuts will result in closer to $32 million in cuts.
  I believe this chart which was just put up here makes the point I am 
trying to make very well. It is labeled ``Crisis in Medicare Physician 
Payments.'' The black line, which is going up, as everyone can see, is 
the increase we have seen in the cost of medical practice in the last 5 
years. We can see very clearly that continues. It is a relentless 
increase. The red line is physician payment updates under Medicare. We 
can see those have been declining and are scheduled for a substantial 
decline in 2007 again.
  What I am trying to say is Congress needs to step in and at least 
keep this line flat, at least hold physicians harmless in this 5 
percent cut. I hope we are able to do even more than that. In my view, 
these reductions will result in access problems for Medicare patients 
across the Nation. Cuts such as these, along with the yearly 
uncertainty of whether the reduction will be implemented, make long-
term planning for small to medium physician practices almost 
impossible.
  In addition to the financial stresses of potential decreases in 
Medicare payments, physicians are being asked to adopt expensive health 
information technologies to improve the quality of medical care. This 
is a lot to expect from even large health systems, much less smaller 
physician groups.
  If the Medicare cuts go into effect--and all expert advice I have 
received leads me to believe they will--there will be access problems 
encountered by Medicare beneficiaries. But what may be even equally 
problematic are the other measures physicians will be forced to take to 
compensate for this cut. I am talking about the reduction of staff, 
forgoing health insurance for their employees, and delaying 
implementation of new technologies. All of these are substantial new 
burdens we are putting on physicians operating their medical practices 
throughout our country.
  Where does this leave us? I believe we need to act both in the short 
term and in the long term. Congress needs to take immediate action to 
halt the scheduled 5 percent cut. I hope this can occur before this 
week is over. Over the long term, we need to find solutions to continue 
to provide quality care to Medicare beneficiaries as well as fair 
payment to physicians for their work. That is not going to be easy.
  Frankly, we are going to have to rethink this whole SGR system we 
adopted nearly a decade ago, and we are going to have to find ways to 
have a fair formula that provides a fair level of compensation. In my 
opinion, this is a priority. It is something that has been the subject 
of intense negotiations between House and Senate Members in the last 
few days. I understand that. I hope reason will prevail and that we can 
come out with a solution that makes sense for seniors in this country 
and for those who depend upon the Medicare system for their health 
care.
  Finding long-term solutions to continue to provide quality care to 
Medicare beneficiaries as well as fair payment to physicians for their 
work will require effort and collaboration between lawmakers and the 
medical community. Earlier this year I introduced legislation that I 
believe is part of the solution. Because part of the payment that 
Medicare makes to physicians is based upon geographic location, 
physicians in rural parts of the country are paid less than those in 
more urban areas. This known as the geographic practice cost indices, 
or GPCIs. Congress determined that such extensive geographic 
disparities were unfair and, as part of the Medicare Modernization Act 
of 2003, language from one of my bills was included that brought all 
geographic areas up to the national average for the calculation of this 
piece of the Medicare physician payment formula. This year I introduced 
legislation to extend this law. We should extend this law before 
Congress adjourns and, at the very least prevent the cuts that are set 
to occur at the end of the year.
  To do less is to fail in our responsibility to the million of 
Americans who depend on Medicare.

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