CMS sees 4.3% drop in Medicare reimbursements: cut is expected due to rising medical costs.(News)(Centers for Medicare and Medicaid Services)

Physicians could face a 4.3% cut in their Medicare reimbursements next year due to the rising cost of medical spending, Mark McClellan, M.D., administrator for the Centers for Medicare and Medicaid Services, announced during a press briefing sponsored by CMS.

The cut would come on the heels of small pay increases over the last few years. Physicians received a 5.4% cut in Medicare reimbursement rates in 2002.

Since then, Congress has provided an update of approximately 1.5% each year over the last 3 years.

However, without a change in the way that physician reimbursement under Medicare is calculated, physicians will once again face a deep cut in 2006. This proposed cut could mean access problems for patients and tough decisions for physicians, several doctors noted in interviews with this newspaper.

"Doctors have to take a look at their bottom lines," commented Scott D. Hayworth, M.D., an ob.gyn. and president and CEO of a 98-physician multispecialty practice in Mount Kisco, N.Y.

Although most ob.gyns. don't see a large number of Medicare patients, the Medicare rates generally serve as a benchmark for other health plans. And if Medicare reimbursement declines, it's likely that other plans will follow suit, according to Dr. Hayworth.

Such a reimbursement cut comes as ob.gyns. around the country are facing soaring medical liability costs and other expenses.