Georgia physicians will lose $410 million for the care of elderly and disabled patients over the next two years due to the 10% cut in Medicare payments for 2008 and an additional 5% cut in 2009. The state’s physicians will lose $6.4 billion for the care of elderly and disabled patients by 2016 due to nine years of cuts for this important medical care. For Georgia: • 83,686 employees, 969,070 Medicare patients and 428,854 TRICARE patients in Georgia will be affected by these cuts. • Compared to the rest of the country, Georgia, at 207 practicing physicians per 100,000 population, has a below-average physician-to- population ratio, even before the cuts take effect. • 39% of Georgia’s practicing physicians are over 50, an age at which surveys have shown many physicians consider reducing their patient care activities. • In 2008, the "Rest of Georgia" locality faces cuts of an additional 1.1% on top of the 10% cuts across the country. The 2003 Medicare law provided a temporary increase in geographic payment adjustments for certain states. This increase also will expire on January 1, 2008 under current law. To find out how the cuts in authorized payments to physicians for Medicare services impact on your state refer to: Link Scroll down and select your state. The law provides for Medicare physician payment rates to be updated each year as follows: • Each year’s payment update calculation starts with the Medicare Economic Index or MEI, which is a conservative government index of practice cost inflation. • The update is then adjusted up or down from MEI based on a national spending target called the Sustainable Growth Rate (SGR). • The SGR was created by Congress in 1997 as a target rate of growth in Medicare spending for physician services. • The key factors in setting the SGR are Gross Domestic Product (GDP) growth, Medicare enrollment, price changes and changes in Medicare benefits or other changes in law. • If spending exceeds the SGR targets, then annual physician payment updates are less than annual increases in practice cost inflation, even if they produce steep reductions from current payment rates. The present Medicare physician payment update formula is producing disastrous effects. In addition to generating the pending steep pay cuts, the formula: • Has kept average 2007 Medicare physician payment rates about the same as they were in 2001. • Prevents physicians from making needed investments in staff and health information technology to support quality measurement. • Punishes physicians for participating in initiatives that encourage greater use of preventive care in order to reduce hospitalizations. • Has led to a severe shortfall in Medicare’s budget for physician services that have driven Congress to enact short-term interventions with funding methods that have increased both the duration of cuts, as well as the cost of a long-term solution. • Hurts access to care for America’s military families because payment rates in the Department of Defense’s TRICARE program are tied to Medicare rates In November the CBO released a study titled The Long-Term Outlook for Health Care Spending. The study presents the CBO's federal spending projections on Medicare and Medicaid and health care spending generally over the next 75 years. The CBO reports that the goal of the study is to examine the implications of continuing current federal law, and finds that federal spending for health care would eventually reach unsustainable levels. In fact, in the absence of federal law changes, the CBO projections suggest that total spending on health care would rise from 16% of gross domestic product (GDP) in 2007 to 25% in 2025, 37% in 2050 and 49%. It also projects that federal spending on Medicare (net beneficiaries' premiums) and Medicaid would rise from 4% of GDP in 2007 to 7% in 2025, 12% in 2050 and 19% in 2082.