Massachusetts delegation argues for end to Medicare formula that cuts physicians’ pay

WASHINGTON -- The Massachusetts delegation called upon congressional colleagues this afternoon to support a permanent fix to a controversial Medicare formula that would cut payments to doctors by nearly 30 percent if left alone.

A full repeal of the flawed formula, known as the sustainable growth rate, is particularly important to the Bay State economy, the delegation argues in a letter to Dave Camp, chairman of the House Committee on Ways and Means, and Max Baucus, chairman of the Senate Committee on Finance.

One in five workers in Massachusetts works in the health care sector, which supports nearly 15 percent of the state’s economy, members of the delegation said. The issue directly impacts more than one million seniors and military families in the state, as well as 20,000 physicians and their 114,000 employees, along with medical device companies, biotech companies, and hospitals that depend on Medicare, they said.


“A permanent solution to the [sustainable growth rate] dilemma is long overdue,” the delegation wrote. “Democrats, Republicans, and the Medicare Payment Advisory Commission have all recognized that the formula is inherently flawed because it neither rewards physicians who restrain growth nor punishes those who prescribe unnecessary services.”

Congress since 2003 has relied on temporary patches to avert the projected Medicare payment cuts to doctors that were called for in an earlier deficit-reduction plan. But those short-term fixes have resulted in accumulated debt that has exacerbated the problem and led to an unsustainable dynamic that prevents Congress from enacting reforms, the letter said.

According to the American Medical Association, the letter said, the true cost over 10 years of repealing the formula, when taking into account the costs of temporary patches, will be $600 billion by 2016; in 2005, the formula could have been repealed for less than $50 billion.

The delegation believes a full repeal should be considered at this time, as Congress deliberates over the payroll tax extension, given projected budget savings from ending the wars in Iraq and Afghanistan. A repeal, they wrote, would “avert this draconian cut” to doctors’ payments and bring about payment stability, and ensure that seniors have access to medical care.


Tracy Jan can be reached at tjan@globe.com. Follow her on Twitter @GlobeTracyJan.