September 29,2009

Grassley Advances Proposal to Improve Access to Medical Care for Seniors in Iowa, Other Rural States by Improving Physician Payments

WASHINGTON – Sen. Chuck Grassley of Iowa today won key committee approval of his proposal to help secure access to doctors for seniors in Iowa and other rural states.

“It’s getting harder and harder for seniors to find doctors serving in rural areas,” Grassley said. “Part of the problem is Medicare payment policies that shortchange rural states. It’s a question of fairness and accuracy to fix the problem of rural physicians getting paid less for performing the same procedures than doctors in other areas. We need to ensure that seniors, wherever they live, will continue to have access to medical care.”

Grassley is working to improve major health care reform legislation under consideration in the Committee on Finance, where he is ranking member. The committee today voted 23 to 0 to accept Grassley’s amendment to adjust what Medicare pays doctors for practice costs in Iowa and other rural states.
The Grassley amendment requires the federal government to improve the accuracy of the data it uses to factor in physicians’ practice costs in determining Medicare payments. Now, the government uses an outdated formula that uses proxies instead of actual costs. Under the current formula, employee wages are based on only a few occupations: nurses, clerical personnel and technicians. Other employees don’t count. Office rent is based on Housing and Urban Development apartment rental data that doesn’t have any connection with the cost of office space. Rural states including Iowa and North Dakota are especially penalized by this formula, Grassley said.

The Grassley amendment requires the Department of Health and Human Services to analyze, evaluate, and make appropriate adjustments to ensure accurate geographic adjustments in payments around the country. The adjustments must be based on reliable data on office rent, office expenses, and wages. The changes would be effective as of January 2012, with a two-year transition period in 2010 and 2011, during which time states such as Iowa would benefit from a higher adjustment. “For doctors to keep their doors open to Medicare patients, payments need to better reflect the real costs of running an office,” Grassley said.

Grassley has long sought greater payment equity to help Iowa seniors, who receive some of the country’s highest quality of care from doctors and hospitals that receive some of the lowest Medicare reimbursement because of inequitable geographic formulas.