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Medicare Pay Cut to Doctors at Impasse. Result: More Doctors Will Drop Medicare

Every year since the late 1990′s, Congress has ‘balanced’ the budget by declaring a pay cut to doctors’ Medicare services.  Every year, after the budget is published, this cut is rescinded.  This year, to reach its budget target, the Health Reform bill called for a 21% pay cut to doctors for Medicare services starting June 1.  It was assumed then, that this cut, like the others before it, would be temporarily rescinded in  separate legislation.  We are now 22 days past this start date and the House and Senate have yet to agree on a bill to do this. Meanwhile, CMS (Centers for Medicare and Medicaid Services), has been holding up payments to doctors hoping this will be resolved soon. (Re-processing the claims would literally cost millions of dollars)

We like to see doctors in a caring altruistic light, but they are in a business and like all businesses, they have to pay office personnel and rent, buy equipment and supplies and continue their own education.  What’s left, their profit, enables them to support their own families and pay off the debts they incurred getting a medical education.

Right now, even without a 21% pay cut, Medicare pays only 78% of what doctors would charge.  The difference is made up by charging everyone else more.   But this has its limits and as a result, according to USA Today, an increasing number of physicians are refusing to see new Medicare patients or dropping out of Medicare altogether.   The American Academy of Family Physicians says 13% of respondents didn’t participate in Medicare last year, up from 8% in 2008 and 6% in 2004.  The American Medical Association says 17% of more than 9,000 doctors surveyed in May restrict the number of Medicare patients in their practice.  Of the primary care physicians responding to the survey, an incredible 31% are restricting Medicare patients.  Also, the American Osteopathic Association says 15% of its members don’t participate in Medicare and 19% don’t accept new Medicare patients. Unless the cut is reversed, it says, the numbers will double.

As for the legislation required to do this, the House has already passed a bill which includes not only a 18 month postponement to the pay cut, but other benefits for individuals and financial support for states’ Medicaid programs.  Senate efforts to pass a similar bill have stumbled over the high costs.  In a compromise, the doctors’ pay cut issue was pulled out into a separate bill which limited the postponement to just 6 months to ensure its passage.  However, House Speaker Nancy Pelosi said she would not consider deliberating over anything less than the entire benefit package.

There will be consequences to this delay.  Robert Berenson a former physician and now a vice chairman of the independent Medicare Payment Advisory Commission warns that this situation is encouraging the doctors who are ‘on the fence’ to move forward with their decision, adding still more to the growing numbers of doctors leaving Medicare.

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