Will docs shun Medicare over rates?

A looming 23 percent cut in Medicare payments and uncertainty about whether Congress will reverse it has fueled concerns that doctors will stop taking Medicare patients just as the first wave of baby boomers enrolls in the program.

Earlier this month, the five-doctor Mansfield Family Practice stopped accepting new Medicare patients. Nationally, nearly one in five doctors now restrict the number of Medicare patients in their practices because of low reimbursement rates and the ongoing threat of cuts, according to the American Medical Association, a doctors’ lobbying group.

“This is becoming a real access problem and it needs to be addressed,” said Judith Stein, executive director of the Mansfield-based Center for Medicare Advocacy.

The rate cut, set to take effect Dec. 1, stems from a formula known as the sustainable growth rate, or SGR. It was established in 1997 and intended to limit growth in Medicare spending, in part by linking rates paid to doctors to the gross domestic product.

Since 2003, Congress has made a habit of overriding the cuts the formula called for, passing one temporary fix after another. This year, lawmakers passed four temporary patches to stave off the cuts.

The most recent one came with a new wrinkle: A 21 percent rate cut did take effect, briefly, in June after Congress went on vacation without taking action. Lawmakers later reversed the cut, retroactive to June 1, and added a 2.2 percent rate increase.

Some people, including the authors of a Medicare trustees report released last month, believe Congress will once again override the rate cut scheduled for December, which is larger than any proposed cuts Congress previously axed.

But doctors aren’t so sure. The uncertainty of June left an impression on many health care providers.

“That just went to show that it was not a priority for the U.S. government,” said Jed Beaulier, practice manager for Mansfield Family Practice. “That was a scary time. There was so much uncertainty.”

It was a key factor in the practice’s decision to stop taking new Medicare patients. The physician-owned practice has already turned away prospective patients.

“Imagine any other business on the planet and one of your primary customers is threatening to cut their payments to you” by 23 percent, Beaulier said. “That’s a large amount of money.”

Dr. Kathleen LaVorgna, a Norwalk general surgeon and president of the Connecticut State Medical Society, said doctors have told her they couldn’t take it anymore. She estimated that at least 20 percent of the doctors she knows have dropped Medicare in the past year.

In some ways, LaVorgna said, it might have been better for the rate cut to go through permanently. The fallout – she predicted at least 70 percent of doctors would have dropped Medicare – would have forced the federal government to address the formula, she said.

“Because there’s only going to be more seniors,” she said.

The Cost of Change

In Washington, it’s hard to find anyone who wants to see the cuts go into effect. But it’s even harder to find someone who has a politically palatable way to pay for permanently overturning the scheduled decreases.

Money is the main obstacle. It could cost $300 billion over 10 years to repeal the payment cuts, according to a 2009 estimate by the Congressional Budget Office. With each delay, the problem is exacerbated. For example, on at least three occasions, Congress has funded the temporary fixes by tacking the cuts onto those scheduled for future years.

Some lawmakers say the constant threat of cuts and short-term solutions have created an untenable level of uncertainty for doctors and patients – and an opportunity to seek a long-term solution.

U.S. Rep. Joseph Courtney, D-2^nd District, said he heard during the August break from elderly constituents who found it increasingly hard to find doctors accepting Medicare. He also heard from doctors who said the looming cuts were a driving factor in limiting those patients.

“It came up everywhere,” Courtney said.

Courtney advocated for a permanent fix to the problem in a letter to House Speaker Nancy Pelosi. He wrote it after learning about the Mansfield practice’s plans to stop taking new Medicare patients.

“The doctors over there are passionate supporters of Medicare,” he said. If physicians like that are “looking at this stop-and-start fix and saying ‘I can’t practice anymore with Medicare patients, even though I deeply believe in Medicare,’ that says to me this has reached a level beyond the normal SGR follies.”

Courtney noted that Congress has never enforced the sustainable growth rate – the only year a rate cut took effect was 2002, the first year formula was used – and said lawmakers should get rid of it instead.

“You’ve got a situation where access to the system is at risk, and I truly believe the Mansfield family practice demonstrates that,” he said.

Stein, from the Center for Medicare Advocacy, said the future of the payment rates hinges in part on the November elections. The majority in the House supports a change, but that could change after the election, she said.

“A Ticking Time Bomb”

So what will ultimately happen?

Courtney said changes to Medicare included in health reform law, such as provisions to reduce fraud and to promote more efficient care, should give lawmakers new fiscal wiggle room to address Medicare rates.

“The [health reform] bill made great progress in terms of Medicare solvency,” he said, “which gives us an opportunity to talk about fixing this policy, which nobody in their heart of hearts believes in.”

But some critics say Democrats missed an opportunity for a permanent fix when they passed health care reform. Instead of devoting money to nixing the reimbursement cuts and fixing the Medicare payment system, Democrats focused on “creating a brand new entitlement” and expanding coverage more generally, said Craig Orfield, a spokesman for Sen. Michael Enzi, R-Wy., the top Republican on the Senate health committee.

And the health reform plans to save money in Medicare mean less money for health care providers – another thing that makes physicians wary of Medicare, said Dr. Fred Hyde, a health policy and management professor at the Joseph Mailman School of Public Health at Columbia University.

“They don’t believe that Medicare is going to have the money to even pay what they’ve paid in the past, much less to sustain growth in inflation or new services or anything else in the future,” he said.

That could produce public anger as more people turn 65 and find their doctors will not take Medicare, or struggle to find one who does, said Douglas S. Arnold, executive director of Medical Professional Services, an independent physician association with more than 400 Connecticut doctors.

“Medicare patients who are forced to lose their doctors over this will with a vengeance take it out in November, because this is something that Congress hasn’t fixed,” Arnold said. “I think it’s a ticking time bomb myself, because this is certainly something that they can deal with but they have just chosen not to. They’ve chosen to put these little Band-Aid solutions on it.”