STEVE INSKEEP, Host:
Tax cuts are not the only unfinished business before Congress. Unless lawmakers act before January 1st, Medicare payments to doctors will be cut by 25 percent. It is the fifth time this year Congress has been faced with the same situation. Neither Republicans nor Democrats support such deep cuts, and they say it could lead doctors to drop Medicare patients. But as NPR's Julia Rovner reports, so far nobody seems to be able to come up with a long term solution.
JULIE ROVNER: Let's get one thing straight, right off the bat. Congress's struggles with paying doctors for Medicare is not related to the health law that passed earlier this year.
TRICIA NEUMAN: This physician payment issue has nothing to do with the health reform law. This has been an issue for more than a decade.
ROVNER: Tricia Neuman is a Medicare expert with the Kaiser Family Foundation. She says the problem really dates back to the early 1980s, when Congress first tried to hold down the amount it spent on physician care. The problem was, every time Congress tried to reduce prices, physicians simply increased the number of services they provided.
NEUMAN: Physicians would order more services, ask their patients to come back for more visits, so there would be an overall growth in physician spending.
ROVNER: That led to the first set of comprehensive controls in 1989. They didn't work very well. So in 1997, Congress tried again, with something called the Sustainable Growth Rate formula. From the very beginning, doctors had their doubts. Jack Lewin is CEO of the American College of Cardiology.
JACK LEWIN: I knew it was going to be a disaster the whole way along. But Congress always said we'll fix it this year. And they've been saying that now, for, we're talking 12 years. And they haven't.
ROVNER: Lewin says one big problem is that the formula punishes doctors for health spending increases they can't really control.
LEWIN: Partly because we have so many new technologies, and we have so many more senior citizens who need new hips and joints and heart valves and stents and angioplasties and so forth.
ROVNER: Other experts say doctors - particularly specialists - are actually doing pretty well under Medicare, even if they haven't had a raise since 2002. But Tricia Neuman says everyone agrees that cuts of the magnitude the formula is now calling for would be devastating.
NEUMAN: The problem is this is a formula that's cumulative. And so, each time they avoid a cut, the next time it comes up for consideration, the cut gets bigger and bigger.
ROVNER: Which is why a cut that a couple of years ago was 10 percent, is now up to 25 percent. And as the size of the cut goes up, so does the price tag for fixing the problem.
NEUMAN: You'd be hard-pressed to find someone to defend the current formula, as it is. But the problem is it would literally be billions and billions of dollars to do away with the formula and put something in law in its place, and that's the dilemma.
ROVNER: It's a dilemma that leaves doctors like Jack Lewin feeling pretty downbeat.
LEWIN: You know, we have been fighting it vehemently for 12 years. It's been the number one issue for the AMA. They put their whole reputation on the line for it this year, and they got double crossed.
ROVNER: Indeed, the American Medical Association agreed to endorse the health overhaul bill, only after Democratic leaders in Congress promised they would permanently fix the Medicare pay problem. And a fix bill did pass the House, but it was scuttled in the Senate because it wasn't paid for. Which leaves doctors where?
LEWIN: You know, what we're begging for is a one year reprieve. And even that's ridiculous.
ROVNER: Julie Rovner, NPR News, Washington.
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