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27% pay cut unlikely: experts

Every year, doctors in Florida and around the U.S. sweat out possible deep cuts to their Medicare payments.

They write articles in their organizations' newsletters, convene at national conferences, lobby politicians, and give speeches asking Congress to repeal the “flawed” physician payment formula that orders ever-increasing cuts.

This year, as Washington's gridlocked Super Committee looks to root out $1.5 trillion in government spending, uncertainty has gripped doctors more than ever.

“We're looking at a possible pay cut of 27 percent between Dec. 31 and Jan. 1,” said Dr. Art Palamara of Broward County. He said most people he talked to at the American Medical Association national meeting last week "think there's about a 20 percent chance that will happen.”

The root of the fear is the controversial Sustainable Growth Rate formula (SGR), which was passed into law in 1997 to control costs. The formula churns out big cuts to physician payments every year, which Congress always over-rides.

The price tag on a long-term fix constantly rises--it's now at an estimated $350 billion -- so lawmakers install short-term fixes. The current fix will expire Dec. 31, and the formula will kick in if nobody acts, Palamara said.

Doctors argue that they couldn't support their offices under such cuts and would be forced out of the Medicare program, leaving seniors stranded.

That's why, most experts say, the chances of Congress allowing the SGR to go into effect are slim.

“It's never been implemented and it's never going to be implemented,” said Joe Baker, at the Medicare Rights Center.
Republicans, Democrats and patients all seem to agree that doctors should be paid fairly, he said.

“Not everybody likes their hospital or insurance company, but people like their doctors and want to see them get paid,” he said.

Larry Polivka of the Claude Pepper Foundation at Florida State University also believes the cuts are unlikely.

“It cannot happen because it could lead to an uproar,” he said. “I don't know if it would necessarily be a mass exodus, but there would be a lot of fear of that.”

The more likely scenario is a 2 percent across-the-board cut that would affect Medicare as well as defense spending and other domestic programs, said Joe Antos, of the American Enterprise Institute, a public-policy think tank.

That cut could go into effect in 2013 if the Super Committee, currently working on deficit-reduction strategies, cannot reach an agreement that Congress can pass.

“Some people won't like it, but the 2 percent for Medicare is a light touch,” Antos said.

---Health News Florida is an independent online publication dedicated to public-service journalism. Reporter Brittany Alana Davis can be reached at 954-239-8968 or by e-mail.