As Congress once again wrestles with “the doctor fix”—yet another postponement of the 21% cut in Medicare reimbursement that went into effect this month—the media has been swirling with stories warning of a mass exodus of doctors out of the federal program. The reason: In 2008 Medicare paid doctors 78% of what they get from private insurers; with the 21% cut they fear that their income will drop even lower.
The reports hit their peak late last week—USA Today wrote that “[t]he number of doctors refusing new Medicare patients because of low government payment rates is setting a new high,” while the American Medical Association announced that 31% of primary care doctors are restricting the number of Medicare patients they take. In a recent survey, the American Academy of Family Physicians found that 13% of respondents didn’t participate in Medicare last year, up from 8% in 2008 and 6% in 2004. Chic Older, executive director of the Arizona Medical Association told the Seattle Times ; “If the 21 percent cut goes into effect, we’re going to have a very severe problem in the state of Arizona.”
The question is: Will Medicare beneficiaries really face a shortage of providers and restrictions on their access to care? Or is this a scare tactic being used for political reasons?
First off, all this is happening against the backdrop of a major political fight in Congress over how much the government should invest in economic recovery. On Friday, the Senate passed a “doc fix” that would postpone the 21% cut in Medicare payments for another six months and provides a 2% increase in reimbursement instead. Unfortunately for doctors—and the seniors they count as patients—Nancy Pelosi has signaled that she may not be willing to settle for such a short-term solution. According to Politico, Pelosi was “caught off guard last week when Reid suddenly opted to pull the Medicare issue out of a jobs and economic relief bill on which the two leaders have been working for months.” For more background on the long history of the “sustainable growth rate” formula that mandates the Medicare cuts (enacted in 1997 by a Republican administration) and the unlikelihood of it ever being instituted long-term, see Maggie’s recent post here.
Still, the reality of the situation is that until the House votes to reverse the cut (which it will surely do), the Center for Medicare and Medicaid Services (CMS) must process claims with the 21% reduction. This has spooked doctors and given health care reform opponents a scare tactic to use in their campaign to paint the legislation as posing a serious risk to Medicare. Even though the SGR cuts have nothing to do with Medicare reform—which promises to increase payments to primary care doctors by 10% among other actions—the confusion has heightened the concern of providers.
The American Medical Association and some state-based medical societies have been warning of a growing boycott of Medicare by their members; releasing alarming statistics about doctors dropping out of Medicare or refusing to accept new patients who are covered under the program. They also warn of a huge onslaught of new Medicare enrollees as the more baby boomers become eligible for the program (something that won’t really peak until 2020).
What is the real story here?
The Centers for Medicare and Medicaid Services says that 97% of doctors accept Medicare. The agency doesn’t know how many have refused to take new Medicare patients, Deputy Administrator Jonathan Blum told USA Today. “Medicare beneficiaries have good access to physician services. We do have concerns about access to primary care physicians.” This is not a new problem, but an ongoing workforce issue—the need to increase the number of primary care practitioners available, especially as 31 million more Americans obtain health care benefits under reform legislation, is pressing.
A survey released last September by the Center for Studying Health System Change found that 75 percent of physicians it surveyed accepted all or most new Medicare patients in 2008. In that same survey, some 87% of doctors said they were accepting most if not all new patients who were privately insured. And in its annual report to Congress in March, MedPac found that Medicare patients actually have an easier time finding doctors than their privately insured counterparts who are age 50 to 64. Only 6 percent of Medicare beneficiaries looked for a new primary-care physician in 2009. Within that group, just 12 percent said finding a doctor to treat them proved to be a big problem, the study found.
That compares with 8 percent of privately insured people ages 50 to 64 who looked for a new primary-care doctor last year, 21 percent of whom said finding one was a big problem. Clearly, the shortage of primary care physicians is has not reached a crisis point for Medicare recipients. (Those Americans covered under Medicaid, on the other hand, do have a serious problem accessing care: In the CSHSC survey, only 56% of physicians indicated that they were accepting most if not all new patients who had Medicaid; 28% reported accepting no new Medicaid patients.)
Kaiser Health News spoke with several doctors around the country about their frustration with the constant threat of the Medicare pay cut and in these vignettes you catch a more of the real story: Many physicians—especially those in primary care—are tired of worrying about the significant income loss they’ll face if the pay cuts go into effect. They are too busy with their practices to analyze the political posturing going on in Congress, and not yet convinced that the new health care legislation will lead to beneficial reforms and an increase in compensation from Medicare. In reality, leaving Medicare completely is not an option for most of these doctors, including those who work for hospitals and those like many cardiologists and geriatricians whose practices are predominantly made up of senior citizens. Also, once physicians choose to drop out of Medicare all together, they cannot submit any claims to the program for two years—even if payment policies change.
Still the panic and unease among many doctors remains palpable. In some cases they may be responding to urgent communications from their state medical societies about doctors leaving Medicare. For example, last month the Houston Chronicle reported; “Two years after a survey found nearly half of Texas doctors weren’t taking some new Medicare patients, new data shows 100 to 200 a year are now ending all involvement with the program. Before 2007, the number of doctors opting out averaged less than a handful a year.”
Dr. Susan Bailey, president of the Texas Medical Association told the Chronicle, “This new data shows the Medicare system is beginning to implode. If Congress doesn’t fix Medicare soon, there’ll be more and more doctors dropping out and Congress’ promise to provide medical care to seniors will be broken.”
The Texas Medical Association says that their survey also had these alarming findings: “In 2008, 42 percent of Texas doctors participating in the survey said they were no longer accepting all new Medicare patients. Among primary-care doctors, the percentage was 62 percent.”
Of course, the Texas Medical Association and its powerful political action arm (TexPac) broke ranks with the American Medical Association and opposed health care reform efforts throughout 2009. According to the Chronicle article, “TMA President Dr. William Fleming said ‘reform is doomed to failure’ without Medicare reform and called Congress’ failure to devise a rational payment plan ‘an insult to seniors, people with disabilities and military families.’”
It makes you wonder if the TMA’s reports of doctors boycotting Medicare are being used to sway public opinion on two distinct fronts. Like some fifty-one state medical societies who have signed a petition calling for Congress to abolish the SGR, the Texas chapter is lobbying to eliminate this balky and unworkable formula. But the group’s efforts may also be aimed at heightening opposition—especially among senior citizens—to health reform legislation in general.
After all, two hundred doctors opting out of Medicare in Texas is really just a drop in the bucket: There are nearly 60,000 non-federal physicians practicing in the state already. And according to the Wall Street Journal, in the first three years after Texas passed malpractice tort reform, some 7,000 new doctors “flocked” to the state—many of them practicing in obstetrics and primary care medicine.
In New York, the state medical society announced that about 1,100 doctors have left Medicare. As a matter of principle and to draw attention to the low reimbursement paid by Medicare, the president of the society announced that she will no longer take new Medicare patients. This also is little cause for alarm—there are over 88,000 total physicians practicing in New York State. And Leah McCormack, the president of the Medical Society of New York is a dermatologist in Forest Hills, Queens—a specialty practice where there are likely enough non-Medicare patients coming in to the office for cosmetic and other work to keep her practice profitable.
In the end, the battle over ending the SGR cuts to Medicare reimbursement is an emotional one for doctors. Even though primary care doctors earn an average of $186,044, many report that they struggle to keep their practices profitable and are forced to see more patients and reduce the time they spend with them. Much has been written about stemming the projected shortages in primary care; the need to better compensate such practitioners for preventive and other care; and fundamental changes that are needed in medical education. These are important issues that will be tackled as we begin to implement health reform over the next several years. The take-away message is that while the 21% cuts doctors are now facing are an administrative nightmare, they will be fleeting. And reports of a mass exodus by doctors from Medicare are overblown. Everyone agrees that Medicare needs an overhaul—but a misguided formula from a Republican Congress in 1997 will have no part in it.
Naomi Freundlich writes for the Century Foundation, where she works with THCB author Maggie Mahar on the HealthBeat project. Prior to joining the Century Foundation, she served as Science and Medicine Editor at Business Week from 1989 – 1997. Her work has appeared in numerous publications, including the New York Times, Business Week, Real Simple and Parents magazine.