MedPAC backs reimbursement hike for physicians.(Practice Trends)

The committee advising Congress on Medicare payments has called for reimbursement increases for physicians and hospitals next year, but is proposing to slow the growth rate for hospital payments.

In its March report, the Medicare Payment Advisory Commission (MedPAC) called for a 2.8% increase in payments to doctors, instead of the 4.6% cut required by law next year. Doctors narrowly dodged a similar cut in January when Congress repealed it in the budget bill.

MedPAC also recommended that hospitals get a 2.95% increase for treating Medicare's 42 million beneficiaries. That would pare back the projected growth in hospital payments by nearly half a percent. The commission noted that a slowdown was needed to help control the program's rising costs.

The proposal is in line with the White House fiscal 2007 budget, which calls for $480 million in hospital payment cuts for 2007 as part of efforts to control entitlement spending. Hospitals have complained bitterly that they already lose money on Medicare, and that further cuts could drive some of them out of business.

However, hospitals may have little to fear this year, according to several key members of Congress.

At a Capitol Hill hearing, Rep. Nancy L. Johnson (R-Conn.) said that half of all hospitals already operate in the red on money from Medicare patients.

In an earlier interview, Rep. Johnson, who chairs the House Ways and Means subcommittee on health, said that President Bush's budget is likely to be "substantially rewritten" by Congress.