Doctors wary of looming Medicare cut, or a short-term fix

John Foley has wanted to be a doctor since he was 6, and the Norwich cardiologist still considers the chance to take care of patients “the coolest thing on the planet.”

But increasingly, Foley has found himself questioning the future of the field. Despite working longer days, his income is down 45 percent from 4½ years ago, and he’s seen fellow doctors give up independent practice to work for hospitals.

“It’s heartbreaking,” he said. “I never envisioned, never dreamed in my life I’d be at 49 years of age sitting here talking to a reporter about whether medicine could be sustained.”

The latest concern on Foley’s mind is a more-than-27 percent cut to the fees Medicare pays physicians that’s poised to take effect Jan. 1, the result of a formula developed in 1997 to limit growth in Medicare spending. In Connecticut, the cut would be somewhat higher, close to 30 percent.

Congress is expected to act to avert the cut, as it has every previous time a formula-driven cut has loomed since 2003.

But doctors and other Medicare experts say the uncertainty that comes with each round of potential cuts is taking a toll, making it harder for them to make investments in their practices or feel confident taking new Medicare patients at a time when the program’s rolls are expected to boom.

The cuts would also apply to TRICARE, which covers members of the military and their families.

Last year, Congress passed six temporary fixes to put off looming cuts. The final one produced a one-year reprieve — giving time, some hoped, to address the underlying formula. More recently, doctors’ groups had hoped the congressional “super committee” would tackle the formula, known as the sustainable growth rate, or SGR. But when the group failed to reach an agreement, doctors found themselves in a familiar place, waiting for Congress to act.

“It’s an open sore,” Dr. Michael Krinsky, a neurologist and president of the Connecticut State Medical Society, said shortly after the super committee announced its lack of agreement. “People in medicine are absolutely crestfallen now because we know that it’s going to be very difficult to take care of the same folks that we’ve been taking care of in the same way.”

For Medicare patients, the continued uncertainty about rates can mean more difficulty finding a doctor to treat them, said Judith Stein, executive director of the Mansfield-based Center for Medicare Advocacy.

“I’m hearing of physicians who are no longer taking Medicare beneficiaries,” she said. “And when there are more and more of us coming into the system, that’s a big problem.”

Last year, as a 23 percent cut loomed, 55 percent of doctors responding to a survey by the Connecticut State Medical Society said they would limit the number of Medicare patients they accept or stop participating in the program if Congress delayed the cut but did not enact a permanent solution. The medical society is now conducting a similar survey.

The lack of a lasting Medicare fix can also mean disadvantages for patients if it keeps their doctors from making investments that could improve their practices, Stein said.

“Are you going to get involved with the new electronic medical records? Are you going to order that equipment for the coming year that would help you do things more effectively and efficiently?” she asked. “Well, what if you don’t know what’s coming in?”

That’s the problem Foley’s practice is facing. He and his colleagues were considering upgrading their computer system to help meet federal standards for electronic medical records. The federal government will provide incentive payments to help cover the costs. But in the current environment, Foley is not confident the federal money will be there. The practice has also seen an erosion of its income from decreased Medicare reimbursement for imaging procedures, which it had used to help cover shortfalls in Medicare payments for patient visits.

So the computer upgrades aren’t happening just yet. “We can’t afford that, so we put it off,” said Foley, the medical society’s president-elect.

More than 60 percent of Foley’s patients are covered by Medicare, and he particularly loves treating older patients and hearing about their lives. A 27 percent cut to Medicare would cause the practice to close, he said. He thinks another short-term fix is more likely, but that could come with a smaller cut to specialists, which he said could also make it harder for physicians to take Medicare patients.

Even when Congress passes a fix to avert a cut, Medicare payments can be delayed, causing cash flow problems for some practices, said Dr. Robert McLean, a New Haven internist and rheumatologist who serves as governor of the American College of Physicians’ Connecticut Chapter.

“So how can you make financial plans for the end of this year, the beginning of next year for even doing practice infrastructure investment? You can’t,” he said. “The cash flow is too dubious and uncertain.”

The short-term fixes have become perceived as a yearly game, McLean said. “It doesn’t help the government’s efforts to try and get the physician community to buy into the government’s ability to help run the health care system well,” he said.

As for the odds of Congress acting before the end of the year to avert the cut?

“They’re going to do something,” McLean said. “The question is, are they going to do enough?”

Several medical groups are now rooting for a bill being introduced by Rep. Allyson Y. Schwartz, D-Penn., that would repeal the SGR formula as well as make several other changes to Medicare, including increasing payments to primary care doctors, testing new payment and health care delivery models, and encouraging physicians to change the way they deliver care by reducing payments to providers who don’t adopt models that will contain costs and improve quality.

Rep. Joe Courtney, D-2nd District, a co-sponsor of the bill, said when he got to Congress five years ago, doctors lobbied for one-year fixes. “The fact is that people’s patience for that is really wearing thin,” he said.

Either way, he said, “The conventional wisdom is still that the 27 percent cut is not going to happen.”

By law, Congress can avert the Medicare cut without finding offsetting cuts, but Courtney acknowledged that politically, people will look for corresponding cuts. That prospect has other health care groups worried.