Medicare Payment Advisory Commission to Impose Pay Cut For Medicare Providers

The Medicare Payment Advisory Commission is charged with supervising $500 billion in Medicare cuts as a part of the Patient Protection and Affordable Care Act.  In September of 2011, MedPAC proposed that specialists will receive a 6% cut in their fees per year for three years followed by a 7 year freeze without any adjustment for inflation; general practitioners will face a 10 year freeze on their reimbursement fees, with no adjustment for inflation.  Despite overwhelming opposition from Medicare patients, Medicare providers, and many Health Organizations, they have recently gone ahead and voted to impose these drastic pay cuts on all doctors that accept Medicare as of January 1, 2012.

These cuts and pay freezes will equate to a 50% real pay cut for specialists and a 30% real pay cut for general practitioners over the next 10 years.  This assumes that inflation stays at a very low 3%.  Obviously, higher inflation would make the cuts in real pay even more drastic.

Consequences of this decision:

1)  Many physicians, and most specialists, will refuse to treat patients with Medicare as their primary insurance.  There are certain costs that physicians assume by practicing medicine and treating patients.  These include the obvious business overhead expenses, such as: rent, utilities, malpractice insurance, medical supplies, salaries of employees/nurses, etc.  Why would a physician want to treat a Medicare patient when they know that the reimbursement for treating that patient may not cover their expenses?

2)  More medical care will be turned over to nurses, nurse practitioners, and physician assistants.  Few people will ever get to see a doctor under the Medicare program.

3)  Medicaid will follow suit and cut their reimbursement fees as well.

4)  Many commercial insurance companies will also follow suit and cut reimbursement fees.

5)  The quality of health care in America will be drastically impacted because many students will choose to pursue careers in other fields.  The cost of medical school plus interest on student loans is always increasing.  Decreased future earnings to pay back these loans will prevent attending medical school from being a viable option.


If we do not take a stand, these cuts will drastically impact the health care industry in the United States.  I encourage you to write your Congressional Representatives and U.S. Senate Representatives to make your voice heard.