Medicare pay patches persist as medicine demands long-term fix

The latest plan would delay the pay cut until Oct. 1. Some physicians say they are getting tired of repeatedly being taken to the brink.

By Chris Silva — Posted March 15, 2010

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Even before President Obama signed an extension bill that reverses until April 1 an unprecedented 21% Medicare physician pay cut, the Senate had begun work on the next short-term patch -- this one to delay the rate reduction until Oct. 1.

The Tax Extenders Act, which essentially is a longer-term version of the Temporary Extension Act from March 2, was approved by the Senate on March 10 with a vote of 62-36, sending the measure to the House.

The roughly $148 billion bill also would extend a number of other unemployment and health care assistance programs through the end of the year.

The pursuit of yet another short-term reprieve, again for less than a year, runs counter to the American Medical Association's call for a permanent repeal of the sustainable growth rate formula that helps determine Medicare physician pay rates.

The AMA and other physician organizations urged the Senate to use the one-month opportunity provided by the Temporary Extension Act to take up a House-passed bill to overhaul the SGR.

"We are opposed to further short-term patches of any duration," AMA President J. James Rohack, MD, said in a March 5 letter to the Senate. "It is time for Congress to finally stop this growing threat to Medicare and Tricare, and move immediately to repeal the SGR formula, replacing it with a system that ensures payments keep pace with the rising costs of the care Medicare beneficiaries and military families need and deserve."

Every time Congress keeps physicians on the edge until the last possible moment, only to implement another short-term patch, the size of the next cut and the cost of enacting the necessary solution only gets larger, Dr. Rohack said. The 10-year price tag for an SGR repeal is projected at more than $200 billion.

Running out of patience

Amid the continued uncertainty over Medicare pay, some physicians are starting to show their fatigue over the seemingly constant threat of rate cuts.

"I nearly decided to stop seeing new Medicare patients until they extended the SGR again," said Kevin C. Gaffney, MD, a neurologist with The Woodlands Neurology and Sleep, in The Woodlands, Texas.

Dr. Gaffney said he still plans to decrease his inpatient work by as much as half now that Medicare has stopped accepting consultation codes, a move that also could have an impact on non-Medicare patients.

If the Medicare payment system is not overhauled soon, Dr. Gaffney plans to take a more drastic step. "If there are no changes by 2011 and Congress cannot get its act together, I plan to opt out of Medicare," he said.

The prospect of future Medicare pay cuts even larger than 21% has Henry S. Levine, MD, also reviewing his options.

Dr. Levine, a geriatric psychiatrist in Bellingham, Wash., sees about 500 patients, roughly half of whom are Medicare beneficiaries.

If the specter of huge rate cuts keeps coming up every few months, Dr. Levine said he will have to start refusing new Medicare referrals.

"We cannot in good conscience abandon our current Medicare patients, so I will not cut them from my practice," he said. "However, I certainly cannot afford to be successful with new Medicare patients under the proposed payment system. Refusing new Medicare patients would be a very painful but an unequivocally necessary step for me to take."

Having worked in his field for 31 years, Dr. Levine said he's seen many elderly patients who have serious psychiatric difficulties.

Moreover, he estimates that several other practices in the Bellingham area have even greater percentages of Medicare patients, and he wonders how they will make out in the current environment of political and payment uncertainty.

"There are certainly others who are worse off than I am," Dr. Levine said.

Still, most physicians do not yet appear to be walking away from Medicare. In recommending only a 1% payment update for physicians in 2011 in its annual March report to Congress, the Medicare Payment Advisory Commission said overall beneficiary access to physician services remains good. The access is actually better than that reported by privately insured patients age 50 to 64, MedPAC reported.

Therapy caps exceptions extended

Among the provisions enacted in the Temporary Extension Act was a short-term reinstatement of the exceptions process for caps on Medicare-paid therapy.

Medicare cuts off coverage for outpatient physical therapy and speech-language pathology services once the patient has incurred a combined $1,860 in spending on the services. A separate annual cap of $1,860 is in place for occupational therapy. An exceptions process for the caps expired at the beginning of the year but is now reinstated until April 1.

As long as the exceptions process is in place, some beneficiaries can receive coverage beyond the caps, when it is deemed medically necessary. The exception to therapy caps is more likely to be granted in some situations, such as after hip replacement or stroke.

Representatives of the Therapy Cap Coalition, made up of patient and physician organizations, held a March 3 news conference in Washington, D.C., to call for the exemptions process to be extended further.

Eric Aldrich, MD, a stroke and rehabilitation neurologist, said most stroke patients are Medicare beneficiaries whose recovery depends on access to therapy.

"I want to thank the Senate for bipartisan action to temporarily protect Medicare beneficiaries from the rationing of therapy services," said Dr. Aldrich, an associate professor of neurology and physical medicine and rehabilitation at Johns Hopkins University in Baltimore. "But the job is not yet done until Medicare beneficiaries are protected from these therapy caps longer-term, or even permanently."

The Tax Extenders Act would keep the exceptions process in place through the end of the year.

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Other extensions

The Temporary Extension Act of 2010 halted an across-the-board physician pay cut and froze current rates through March 31. Other short-term extensions in the package included:

  • Enhanced unemployment benefits
  • Enhanced COBRA subsidies
  • Medicare therapy caps exceptions
  • Surface transportation programs
  • Flood insurance programs
  • Rural satellite TV provisions
  • Federal poverty guidelines
  • Small business administration loan guarantees

Source: Temporary Extension Act of 2010 (link)

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