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.Continue reading…