Medical groups prepare drastic response to pending Medicare payment cuts

New Orleans, La. Oct. 25, 2010 – New research just released by the Medical Group Management Association (MGMA) reports that 67.2 percent of medical practices are likely to limit the number of new Medicare patients they accept unless Congress halts upcoming Medicare reimbursement cuts. The potential reduction in beneficiary access comes as a result of a pending 23.6 percent cut to Medicare physician payment on Dec 1, followed by an additional 6.5 percent reduction on Jan. 1.

"This is a situation that must be dealt with immediately when Congress returns after the elections," said MGMA President and CEO William F. Jessee, MD, FACMPE. "Further congressional delays jeopardize patients and the medical practices that serve them."

Without Congressional action to address these cumulative cuts in excess of 30 percent, 49.5 percent of medical groups indicated that they will stop seeing new Medicare patients. Meanwhile, 27.5 percent of respondents said they would cease treating all Medicare patients. The millions of baby boomers entering the Medicare program starting in 2011 will only exacerbate access issues.

In addition to reducing the number of Medicare patients they see, physician practices are considering other steps to address decreased reimbursement:

-76.6 percent will likely delay the purchase of new clinical equipment and/or facilities;
-60.5 percent will likely reduce the number of administrative support staff;
-54.0 percent will likely reduce clinical staff; and
-45.3 percent will likely delay purchase of electronic health record systems.

These statistics are the result of repeated congressional failure to address the flawed sustainable growth rate (SGR) formula. Some 29.5 percent of practices began reducing the number of appointments for new Medicare patients in June when Congress failed to take action to avert Medicare payment cuts by the June 1 deadline, instead temporarily delaying the cuts retroactively. MGMA’s research indicates the uncertainty created by the retroactive legislation has already triggered the following actions by practices:

-37.3 percent delayed purchasing electronic health record systems;
-31.7 percent reduced the number of administrative staff; and
-27.5 percent reduced the number of clinical staff.

"The concrete actions already taken by medical groups as a result of the uncertainty created by congressional inaction have added significant barriers to quality care," Jessee said. "Uncertainty about the future is creating an unsustainable environment for many who practice in areas with large Medicare populations. Congress must take action to block these pending cuts and provide an update that lasts, at a minimum, through the end of 2011. This will provide lawmakers and the provider community time to develop a long-term solution that ensures beneficiaries have continued access to quality care."

MGMA members will use the results of this research in their grassroots advocacy efforts to urge Congress to take action during the first week of its lame-duck session – before these massive cuts take effect. MGMA conducted its SGR research from mid-September to mid-October. The Association received responses from more than 2,860 practices where 63,000 physicians practice.

About MGMA

MGMA is the premier membership association for professional administrators and leaders of medical group practices. Since 1926, MGMA has delivered networking, professional education and resources, and political advocacy for medical practice management. Today, MGMA’s 22,500 members lead 13,700 organizations nationwide in which some 275,000 physicians provide more than 40 percent of the health care services delivered in the United States.

MGMA’s mission is to continually improve the performance of medical group practice professionals and the organizations they represent. MGMA promotes the group practice model as the optimal framework for health care delivery, assisting group practices in providing efficient, safe, patient-focused and affordable care. MGMA is headquartered in Englewood, Colo., and maintains a government affairs office in Washington, D.C. Please visit

Follow us on social media

 MGMA on Facebook   MGMA LinkedIn Group   MGMA on Twitter