Government

Medicare payment -- past, present, future: A "rational" system unraveled

Physicians face flagging practices, time-consuming patient care and temptations to throw in the towel when it comes to Medicare. Part 2 of a 3-part series.

By David Glendinning — Posted Oct. 2, 2006

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

Chicago-area seniors who just turned 65 or who recently moved into town needn't bother contacting Ellen Brull, MD, to see if she will take them on as patients.

Two years ago, the family physician made the difficult decision to stop accepting new Medicare patients. Several times a week, her practice receives calls from beneficiaries hoping to set up a first visit with the doctor only to find out that they must keep searching for a medical home.

"I'm committed to the patients that I have, and I don't mind spending time with them even though I don't get reimbursed for all of it," said Dr. Brull, who practices in Niles, Ill. "I just couldn't make ends meet if I agreed to see all Medicare patients."

At the heart of the problem is a Medicare physician payment formula that ties doctors' reimbursements to the nation's economy and cuts rates across the board when total physician spending exceeds annual limits. Because federal payment rates have stayed nearly flat in recent years while the costs of running a practice have steadily gone up, Dr. Brull's final take-home income this year will be no higher than it was in 2002, she said.

When she decided to see only currently established Medicare patients, who make up about 30% of the practice, Dr. Brull hoped to bring in enough reimbursement from private-pay patients to make up for the financial loss that she was taking by continuing to treat seniors. But so far, this strategy has not been enough for the practice to do anything but tread water.

Prospective Medicare patients who could benefit from her care aren't the only ones who are out of luck. Inadequate federal reimbursements meant that last year Dr. Brull was unable to give her staff members the raises that she thought they deserved.

Dr. Brull is not alone in her frustrations. Across the country, primary care physicians are complaining about a payment system that doesn't work and a federal government that has been unable to fix it.

The combination of rising practice costs and stagnant reimbursements can be legitimately deemed a crisis for the field, said Clifton Cleaveland, MD, an internist and former American College of Physicians president from Chattanooga, Tenn. "Without a very quick solution, I think primary care is dead," he said.

The trouble with time

Medicare wasn't always this tough a pill for physicians to take, said J. Edward Hill, MD, a family physician and immediate past president of the American Medical Association.

At its inception, the program generally paid physicians their usual and customary charges. But spending soon spiraled out of control, alarming lawmakers and prompting them to clamp down. With the dawn of the 1990s came a new payment system based on physicians' time and resources -- along with formulas aimed at limiting how much Medicare would spend on doctors' services.

The current method of tying physician reimbursement to the economy to control costs has for years resulted in negative payment update calculations. Although Congress has stepped in most years to prevent an actual cut, reimbursement still did not keep up with costs.

The system unraveled when physicians who were not being paid adequately for their care realized that they could not spend as much time on senior patients if they also wanted to run their practices as successful small businesses, Dr. Hill said.

"It became much less pleasant to take care of patients after that because all of a sudden, time became a big factor," he said. Patients started expressing dissatisfaction about not having immediate access to physicians that they had before, and doctors stopped making house calls and visiting nursing homes to see their patients because they couldn't afford to take the time.

Dr. Brull regularly sees examples of why Medicare patients today cost physicians time and resources that far outstrip what the program pays.

One elderly patient with coronary artery disease will not go into assisted living despite the fact that his advanced age and health condition mean he cannot keep track of the medicine that is keeping him alive. So every week, the beneficiary comes into the office so Dr. Brull or her medical assistant can arrange all of his medications into pillboxes with seven compartments, each marking a day of the week. They also check the boxes from the previous week to make sure the patient hasn't missed any doses.

This 30- to 45-minute weekly visit is just one of the many commitments to patient care that receive no reimbursement from Medicare, Dr. Brull said.

In another case, the physician spent countless uncompensated hours trying to get an elderly female patient to control her blood sugar levels after the patient's non-English speaking caregiver and alcoholic sister proved to be of limited help. Although Dr. Brull eventually was able to get a handle on the situation, the road to stability was exceedingly difficult.

Many elderly patients are confused, afraid and don't understand what's happening with their health, Dr. Brull said. Time that could be spent on actual medical care for these patients is spent on such efforts as calling patients' pastors or faraway relatives to help with health maintenance activities or even trying to convince ill seniors that they need to go into an assisted-living environment by attempting to get their driver's licenses revoked.

"We're family physicians/social workers, and it's this social worker part that is not reimbursed," she said. "And there's really nobody else in the system who does it but the primary care physicians."

The situation only became more difficult for physicians as the Medicare population as a whole became older, said David Ingis, MD, a gastroenterologist from Willingboro, N.J. Medical advances have allowed people to live longer than they would have even 10 years ago, but that also means more senior patients coming into doctors' offices have multiple chronic conditions that require a greater amount of time and care. Dr. Ingis said his 94-year-old father, who is alive in part thanks to coronary artery stents he received several years ago, is a prime example of how Medicare's population has changed without the payment system following along.

"People are living longer, and the fastest-growing group in this country is the group over 80," he said. "So there's no question that spending has to go up. For the government to think that they are going to pay less per patient and keep spending at the same level is ridiculous."

What's a physician to do?

Physicians grappling with inadequate federal payments, the constant threat of cuts and the challenges of an increasingly high-maintenance Medicare population have options. But many doctors don't like them.

Doctors can stop taking Medicare assignment. These physicians still can see senior patients on a case-by-case basis, and they can charge these patients part of the difference between their fees and what the government pays. But instead of the doctor billing Medicare, he or she bills the patient directly and then the patient must seek reimbursement from Medicare. Many physicians find the unreliability of this process to be more trouble than it's worth to them in additional fees.

Some physicians, such as Dr. Brull, continue to accept Medicare assignment for their existing Medicare beneficiaries but have been forced to leave new patients for physicians who can still afford to take them. Yet others have taken the more drastic steps of getting out of the Medicare program altogether or avoiding the insurance market as a whole. Dr. Brull said that "boutique" care is an impossible proposition for her office, but some area physicians have found success with this model.

Other physicians cannot afford to turn away any Medicare patients as long as they stay in business. Arvind Goyal, MD, a family physician in Hoffman Estates, Ill., said his high percentage of senior patients and his special training in geriatrics mean that reducing or eliminating his Medicare workload would be a step backward. But if program reimbursements are cut or continue to lag behind inflation, he may get out of active practice completely.

"I will continue to maintain this practice as long as I can stretch it, but it is possible that the system will force me into premature retirement," he said. "If half of my work is with Medicare patients and Medicare is continuing to threaten my very survival in practice, someday my family is going to ask me, 'What are you still doing there?' "

Dr. Goyal hopes that the situation won't get to that point, but if it does, he would not be the only physician to retire early in part because of inadequate reimbursement rates. Dr. Cleaveland retired from active practice in 2004 after becoming increasingly discouraged with the payment system. He said his yearly income peaked in the mid-1990s and steadily declined after that. "I was on a treadmill that was going slightly faster than I could go," he said. "That was among the reasons why I decided to hang it up and do other things."

For younger physicians who are still early in their careers and aren't prepared to leave medicine, some find that leaving the primary care office setting is the way to dispel some of the frustrations of dealing with the Medicare payment system. The young internist who purchased Dr. Cleaveland's practice after he retired soon closed it down and moved into a hospital setting, where he would work regular hours, receive a set salary and leave reimbursement headaches to others.

Several primary care physicians pointed out that fewer medical students are choosing to enter primary care in the first place. Students worry that Medicare reimbursement won't be stable enough to allow them to pay back the tens or even hundreds of thousands of dollars in educational loans they face. Specialists generally get paid better rates and have fewer time pressures than primary care doctors, according to internists and family physicians.

That means the primary care physicians who are left to take care of the Medicare patients become more disgruntled, Dr. Cleaveland said. "Office-based primary care practitioners are an unhappy, overworked, grumbling bunch," he said.

Next week: Promise and challenges.

Back to top


ADDITIONAL INFORMATION

Hypothetical visit from Medicare present

The scenario: An 80-year-old woman travels several hours to see her primary care physician for a routine visit. She recently moved and is having trouble finding a doctor closer to where she is now because many physicians are no longer accepting new Medicare patients. The patient has diabetes and four associated chronic conditions.

The encounter: The physician spends much of his time discussing the patient's regimen of prescription drugs. She recently had to switch to a generic version of one medication because the new Medicare drug benefit would not cover the brand-name version. She is confused by the change and in danger of a relapse due to missed doses. The patient regularly sees a number of specialists, and the primary care physician must call them later to try to coordinate care.

The payment: Medicare pays a discounted rate for a roughly 20-minute patient encounter, even though the visit took well over an hour. The doctor wants to keep seeing this patient and others like her, but he must take in more private-pay patients to make up for his Medicare losses. He worries whether he will be able to keep up the benefit package he offers his employees, including the billing assistant who looks up treatment codes and submits them electronically. The upcoming across-the-board reimbursement cut might convince him to tighten his belt more or even eye early retirement.

Back to top


ADVERTISEMENT

ADVERTISE HERE


Featured
Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story


Read story

Goodbye

American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story


Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story


Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story


Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story


Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story


Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story


Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn