Oct. 31 (Bloomberg) -- Heart and cancer doctors will get a smaller fee cut next year from Medicare, the U.S. government program for the elderly, than the Obama administration first sought in a move to shift money to family physicians.

Reductions will be made over four years rather than imposed at once in 2010, the U.S. Centers for Medicare and Medicaid Services said yesterday in a statement. In July, the agency said it planned to slice $1.4 billion, or more than 10 percent, in payments for each of the two specialties, triggering what an advocate promised would be a “tooth and nail” battle.

The administration argued that the lower reimbursements for specialists would make more dollars available for lower-paid non-specialists who can focus on preventing expensive, chronic illnesses. That would tame the growth in medical costs, one goal of President Barack Obama’s effort to remake the U.S. system of care. Under yesterday’s plan, family doctors and nurse practitioners would get half the proposed increase.

The phase-in means “a slow death” for heart doctors, said Jack Lewin, chief executive officer of the Washington-based American College of Cardiology, in a telephone interview yesterday. “Most cardiologists will still see the handwriting on the wall” and elect to leave the practice.

Specialists will appeal to Congress, said Lewin, who had pledged the “tooth and nail” effort. Lawmakers have 60 days to let the cuts take effect Jan. 1 or order changes.

The proposal includes a 21.5 percent cut for all physicians, about 1 million in total, who treat Medicare patients. The Senate Oct. 21 failed to pass a bill to permanently repeal the broader cut, at a cost of $247 billion over a decade. Lawmakers have said they’ll instead try to postpone the fee reductions for a year.

Eroding Support

The shift in pay toward family doctors had diminished support among specialists for Obama’s broader overhaul of the U.S. health system, said Lewin, whose group represents 37,000 cardiac physicians. Instead of rallying behind the president’s efforts to expand coverage to the uninsured, heart doctors have been fighting the pay cuts, he said.

The fee schedule reduces projected spending for care by cardiologists by 8 percent next year and for radiation oncologists by 1 percent. Cancer-care doctors will see a 6 percent reduction over four years, according to Allen S. Lichter, chief executive officer of the American Society of Clinical Oncology, a Washington-based association with 27,000 members.

“The cumulative effect of previous cuts has already caused oncologists to close practices, consolidate locations, and turn away Medicare patients” while the number of cancer cases increases, he said in a statement posted on the association’s Web site. “Further reductions will jeopardize access to care for more people with cancer across the country.”

Primary Care Shortage

Medicare, which also covers the disabled, would pay family doctors 4 percent more under the final proposal, instead of 8 percent. Nurse practitioners would get an additional 3 percent, rather than 6 percent.

“It’s a great step forward,” said Ted Epperly, board chairman of the 95,000-member American Academy of Family Physicians, based in Leawood, Kansas, yesterday in an interview. “We’ve got to have a more robust primary-care system if we want a health-care system that works in this country.”

Some 65 million Americans live in areas considered by the U.S. Health and Human Services Department to have too few primary care doctors, with less than 1 practitioner for every 2,000 people, according to department figures as of March 31.

Outnumbered by Specialists

The U.S. has 250,000 primary-care doctors and nurses and about three times as many specialists, said Atul Grover, chief advocacy officer for the Association of American Medical Colleges, a Washington group. The number of medical school graduates in the U.S. entering family medicine fell more than a quarter from 2002 to 2007, according to a study last year by the group and the American Medical Association

Medicare, which covers 45 million people, is expected to spend $503.1 billion this year, accounting for $1 of every $5 spent on U.S. health care, the Centers for Medicare and Medicaid Services estimated in February. Spending will reach $931.9 billion in 2018, the agency said.

Without changes, the system is guaranteed “to basically break the federal budget,” Obama said at a White House news conference July 22.

To contact the reporter on this story: Alex Nussbaum in New York anussbaum1@bloomberg.net.

Last Updated: October 31, 2009 10:54 EDT