Medicare pay cut stopped again; doctors decry lack of permanent fix

Continued close calls over short-term pay patches are causing stress and administrative headaches for physicians.

By Chris Silva — Posted April 26, 2010

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Congress may have stemmed most of the damage from the latest 21% Medicare payment reduction by reversing the cut before any physicians actually could feel it. Still, physician organizations say the harm caused by lawmakers once again bringing doctors to the brink before pulling them back is another major reason why the next solution must be a permanent one.

Legislation to reverse the cut and postpone it until June 1 was signed into law by President Obama late on April 15. The cut technically had gone into effect April 1 as lawmakers fought over how to pay for the bill, which also extends various unemployment and health assistance programs. But the Centers for Medicare & Medicaid Services had instructed contractors to hold off on processing claims for 10 business days to give lawmakers more time to act -- a window that closed at the end of the day on April 14.

That meant nearly 24 hours elapsed from the time the deadline expired until the president signed the retroactive bill, allowing the small possibility that some claims could have been processed with the 21% cut applied.

In the aftermath of the legislative scramble, CMS was still trying to determine how many claims had been processed by contractors reflecting the reduced rate. Federal officials said the chance of any physician claims actually paying out at the lower amount is small.

Ellen B. Griffith, a CMS spokeswoman, explained that contractors on April 15 were instructed to begin processing claims with the negative update rate after their systems were fully tested to ensure proper claims payments. But with the bill being signed into law later that day, contractors likely did not have enough time to verify their systems before the rate cut was reversed.

"CMS expects that very few, if any, claims were paid at the reduced rate," Griffith said.

And even if they did, CMS said any claims that might have been processed by contractors at the lower payment rate would be reprocessed automatically without any further action required from physicians.

Pushing again for a long-term bill

The congressional action meant that the potential "Medicare meltdown" predicted by the American Medical Association was again temporarily averted. Still, physicians have complained that legislative bickering over short-term patches has prevented serious consideration of a permanent pay formula repeal and has done nothing to help pay keep up with physician practice expenses.

"Congress must now turn toward solving this problem once and for all through repeal of the broken payment formula that will hurt seniors, military families and the physicians who care for them," AMA President J. James Rohack, MD, said in an April 16 statement. "It is impossible for physicians to continue to care for all seniors when Medicare payments fall so far below the cost of providing care."

Also, even though pay wasn't cut for long, the latest situation created the potential for administrative problems for some practices, according to the American College of Physicians.

"There's the additional wrinkle that doctors may have to go back and re-bill patients for higher co-insurance once the payments are restored retroactively," said ACP President Joseph W. Stubbs, MD. Even with Congress approving a bill that pushes back the cut, the ACP still anticipated that some physicians would experience cash flow problems. Before the congressional action, CMS had suggested that some physicians might want to hold onto April claims until the situation had been resolved.

The payment uncertainties "will send an unfortunate message to Medicare beneficiaries," Dr. Stubbs said. He added that the only effective answer for patients and physicians "is a long-term solution to physician payments that provides predictable, positive and stable updates to keep pace with practice costs."

"Not sure how to plan"

Physicians are warning that lawmakers' infighting over increasingly shorter-term legislation to delay Medicare payment cuts is taking a large toll on doctors, at least psychologically.

"The uncertainly about the fee schedule is already impacting us regarding our willingness to take on new Medicare patients, because we're not sure how to plan for it," said Susan Crittenden, MD, an internist in Cary, N.C.

Dr. Crittenden said her group practice, the Raleigh Medical Group, already is considering switching from Medicare participation status to nonparticipation. If a cut as high as 21% were to take effect and actually impact claims, the practice probably would have to change its business plan.

Leslie Seiden, MD, is a psychiatrist who accepts Medicare as a service to her aging patients at practices in New York and Lords Valley, Pa. She said she would retire if the Medicare cuts were to reappear. "It will not be feasible for me to continue my practice if the fees are permanently lowered. It would be a severe disservice to patients and physicians alike."

Dr. Seiden wants Congress to fix the Medicare fee schedule permanently before June 1 so payments can become an adequate representation of physician costs.

"When I entered medical school in 1964, the smartest students were going into medicine," she said. "Now, most are avoiding it to make more money and have a better quality of life. What will the future hold?"

A state of decline

Medicare beneficiaries in at least one state already may be starting to see the strains of a payment system under stress. February survey results released by AARP on April 13 conclude that Idaho's documented problems with access to Medicare and Medicaid primary care are getting worse.

The state already ranks second-to-last in the nation in terms of doctor-to-patient ratio, and about 17% of all physicians aren't accepting any new Medicare patients, largely due to low payment rates, AARP said.

"We can't afford to have any more doctors in Idaho not taking Medicare patients," said David Irwin, an AARP spokesman. "A lot of doctors are retiring now, and we don't have other physicians to take their places."

A. Patrice Burgess, MD, is a family physician in Boise who also serves on the board of the Idaho Medical Assn. She said the survey findings accurately reflect the dire situation in the state.

"It's frustrating, because we want to take care of these folks," she said.

The vast majority of practices in Idaho are independent and operate in rural settings, Dr. Burgess explained. If Congress cannot come up with a permanent fix to the payment rate system, she fears that the number of physicians will continue to dwindle to the point where entire communities would have no doctors at all.

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The doctor is out in Idaho

According to a recent AARP survey, physicians in Idaho increasingly are closing their doors to new patients, especially those in Medicare.

  • Statewide, more than 1 in 5 primary care physicians (21%) say they no longer accept any new Medicare patients.
  • More than a quarter of primary care physicians in urban communities (28%) say they no longer accept any new Medicare patients.
  • While most rural primary care physicians (79%) are accepting all new Medicare patients, fewer than half of urban primary care physicians (47%) are doing the same.
  • Some rural primary care physicians (9%) and urban primary care physicians (24%) say they are accepting some new Medicare patients.
  • Payment is the No. 1 reason cited by physicians for not accepting new Medicare patients.

Source: "The Doctor is Out: An in-depth look at why some physicians' doors are closed to new patients in Idaho," AARP, February (link)

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