Medicare Physician Payment Reform: Impact on Massachusetts

The Facts

This is about seniors' and military families' access to health care.  More than one million Massachusetts seniors and military families depend on Medicare and TRICARE.

There are 1,015,086 Medicare beneficiaries in Massachusetts - more than the national average -and 71,260 members of military families who live in Massachusetts who depend on TRICARE. Their Medicare and TRICARE benefits will be significantly impacted by these cuts.

This is about Massachusetts jobs and our economy. One in five workers in Massachusetts is employed in health care. Nearly 15% of our state's economy is based on health care.

This issue directly impacts 20,000 physicians, their 64,724 employees, and every health care constituency which depends on Medicare including the 187,000 employees of Massachusetts hospitals. Massachusetts hospitals attract more than $1 billion in federal research funding and serve as the anchor for the entire life sciences industry in the Commonwealth. Medicare funds also directly impact our health care devices manufacturers such as Philips Healthcare. Cuts to Medicare in this state would be devastating.

This is about the viability of physician practices in Massachusetts. Over the last 10 years the cost of practicing medicine in MA has gone up 34% while Medicare reimbursement has gone up 1%.

Physician practices are already suffering.  Massachusetts has severe physician shortages, and ranks high on the AMA map of states with significant access problems.  The cost of practicing medicine in this state is higher than the national average.

To make matters worse, most insurers in Massachusetts base their reimbursements on the Medicare fee schedule, exacerbating the impact of Medicare's financial instability.

The cost of this change will never be cheaper.

Each time Congress stops the cut for one year, the cost of real change increases dramatically.  In 2005 the cost of a 10 year freeze (no cuts) would have been $48.6 billion; in 2011 it was estimated to be $297.6 billion - a 512 percent increase in just four years.

In 2005 the scheduled Medicare cut was 3.3%.  Now it is 27%. 

This is the 10th year that Congress has needed to deal with this problem. Short-term patches are bad fiscal policy for the federal government, physician practices and seniors and military families access to health care.

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