Government

AMA survey: Senior access at risk if Medicare cuts doctor pay 10%

A bill to reauthorize a popular children's health insurance program could serve as the legislative vehicle to stop physician reimbursement cuts.

By David Glendinning — Posted June 18, 2007

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If the nearly 10% cut to Medicare physician pay goes through as planned in January 2008, the physicians who start tapering off or ending their acceptance of new beneficiaries are expected to outnumber the doctors who don't.

That is one of the central conclusions of an American Medical Association Member Connect survey released earlier this month. When nearly 9,000 member and nonmember physicians were asked in May how they would react to the expected reduction, 60% said they would either decrease the number of Medicare patients they would accept into their practices for the first time or stop seeing new Medicare patients altogether. Forty percent of the respondents said they would take one of these steps with beneficiaries who are established patients.

These figures show that Congress must act to avoid a patient access crisis by stopping next year's reduction and the eight annual reimbursement cuts that would follow it under current law, said AMA Board of Trustees Chair Cecil B. Wilson, MD.

"As physicians brace for nine years of steep payment cuts, it will be extremely difficult for them to continue accepting new Medicare patients into their practices," he said. "The baby boomers begin entering the program in 2010, and the Medicare cuts increase the likelihood that there may not be enough doctors to care for the huge influx of new Medicare patients."

To help bring this point home to lawmakers and others, the AMA this month launched a media and public relations campaign against the cuts. The effort, to which the Association has committed at least $2 million to start, begins with "National House Call" events in two states and print advertisements in Capitol Hill newspapers urging lawmakers to stop the reductions.

In one ad, a photo of an elderly woman is accompanied by text that reads: "This patient thinks she's healthy. A doctor would tell her she's not." Below text that shows the woman's high blood pressure, cholesterol and blood sugar levels, the ad concludes, "Too bad she may not have a doctor."

Dr. Wilson said that if Medicare reimbursement follows its current course without congressional action, the fear of a bona fide access crisis for seniors will become a harsh reality. "Medicare as patients now know it will be a distant memory."

An emerging strategy on Capitol Hill

The portion of physicians who plan to reduce or end acceptance of new Medicare patients if the 2008 cut happens is 15 percentage points higher than the corresponding figure from last year's survey, when physicians were facing a roughly 5% cut that would have started in January 2007. The figure jumped 17 percentage points on the question of existing Medicare patients.

The threat of physicians closing their doors to incoming or existing Medicare patients, although worsening, is not a new one. But Congress has rarely stood by to find out how many of these doctors would actually restrict their Medicare caseloads. In each year since 2003, physician pay has stayed steady or has slightly increased due to the enactment of short-term revisions to the Medicare statute.

The AMA does not have any information about how many physicians stopped seeing new or existing Medicare patients in 2002, the last time Congress allowed a scheduled cut to take effect. The current situation, however, is a much more dire one than doctors and their patients faced then, Dr. Wilson said.

"That one time clearly did not result in a catastrophe. What we're reporting to you is what physicians say they will do. No one knows until it happens," he said. "But it is counterintuitive to think that a small business can take a 10% cut in payment and not look at that group of patients for whom that cut applies and say ... 'I'm going to have to make some adjustments.' "

Combine SCHIP and pay reform?

The year-end deadline and the potential implications that inaction would have on a vulnerable patient population are similar to the elements of the debate over the State Children's Health Insurance Program, which is up for reauthorization this year. Because of this commonality, the AMA would be happy to see both SCHIP reauthorization and physician pay reform move forward as part of the same bill, Dr. Wilson said.

Such a strategy could increase the likelihood that a payment correction will advance this year, because many lawmakers from both sides of the aisle consider the children's health bill "must-pass" legislation.

But congressional aides said that competition for the inclusion of other health care priorities on the popular SCHIP bill would be fierce. Disagreements about whether the program should be expanded on top of being reauthorized has already prompted some lawmakers to warn their colleagues against producing a bill that is bogged down with too much new spending.

Some consumer groups warned that boosting doctors' pay could hit seniors in their pocketbooks.

Increases in physician reimbursement can result in higher premiums for beneficiaries, who foot a percentage of Medicare's total expected outpatient spending for the year. The AARP expressed wariness about pay revisions that don't protect beneficiaries from the corresponding rise in Medicare Part B premiums.

The AMA would support Congress in doing what it can to safeguard seniors from any wild premium hikes that could occur as a result of reversing the reductions, Dr. Wilson said.

Lawmakers could foot a large part of the cost of physician payment reform by equalizing Medicare Advantage payments with the program's traditional fee-for-service arm.

Private plans in Medicare, on average, were paid 12% more last year per patient than the program spent on fee-for-service beneficiaries. The estimated $65 billion over five years that this move would free up would be roughly the same amount required over that time to replace the physician cuts with annual increases based on the rise in practice costs, Dr. Wilson said. Some lawmakers, however, have already identified SCHIP as the most appropriate recipient of those savings.

Better use for the money

The majority of AMA survey respondents said the additional money paid to Medicare Advantage plans would be better spent reversing physician pay cuts or assisting all low-income Medicare beneficiaries with their out-of-pocket costs -- not just those in private health plans. Even after being told that some insurers use the extra dollars to pay for added benefits or low-income subsidies, only 17% of doctors said that the additional payments to plans should continue.

Juxtaposing the Medicare Advantage payment issue with physician reimbursement poses a false choice to doctors, said Mohit Ghose, an America's Health Insurance Plans spokesman. The trade group supports paying doctors fairly and reauthorizing SCHIP, but, he said, neither one should be accomplished at the expense of the roughly 8 million Medicare Advantage enrollees who count on the extra benefits and cost savings offered by the plans.

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ADDITIONAL INFORMATION

Impact on patient access

Many doctors say they would limit their acceptance of Medicare patients if anticipated physician payment cuts occur.

New patients Established patients
Decrease Stop accepting Decrease Stop treating
Payments cut by 10% in 2008 32% 28% 32% 8%
Payments cut by 40% by 2015 13% 64% 24% 44%

Source: American Medical Association Member Connect Survey, May

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Impact on physician practices

If anticipated Medicare payment cuts go forward, physicians say they would have to make some difficult practice choices. Percentages indicate physicians who plan to make changes to their practices.

Payments cut 10% in 2008 Payments cut 40% by 2015
Defer medical equipment purchase 72% 84%
Defer health IT purchase 67% 78%
Begin referring complex cases 67% 80%
Discontinue nursing home visits 58% 72%
Stop providing certain services 65% 85%
Discontinue rural outreach 57% 72%
Reduce staff 54% 77%
Close satellite office 41% 60%
Shift more services to hospital 40% 55%
Reduce workload/hours 36% 68%
Leave the office setting or retire 14% 59%

Source: American Medical Association Member Connect Survey, May

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