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Plested said, "All of these things drive up expenditures, which triggers the formula and reimbursements, go down."
Congress has sometimes intervened to avoid rate cuts from taking place since the formula began in 1998, and a vote is expected on physician payment sometime in the next few months. The AMA would like a permanent fix and an end to the yearly lobbying to stop the cuts.
Plested said The AMA has no studies that show physicians have discontinued seeing Medicare patients, but anecdotes of physicians' closing their practices to Medicare beneficiaries abound.
The Medicare Payment Advisory Commission, which suggests payment levels to the government, said in congressional testimony that "beneficiary access to physicians is generally good, with few statistically significant changes in recent years." The commission said, "The number of physicians providing services to Medicare beneficiaries has more than kept pace with growth in the beneficiary population in recent years."
Government researchers, as well as those with the Congressional Budget Office, say increasing Medicare and other health-care costs are, as Orszag testified, "the key long-term fiscal problem" facing the nation.
The CBO estimated that Medicare would pay physicians $60 billion in the 2007 fiscal year. If physician fees rose with the Medicare economic index, (a kind of medical inflation measure), Medicare spending would be $262 billion higher over the next 10 years than it would be under the present formula.