Senate reaches tentative deal to delay Medicare physician pay cuts for one year
The Senate has reached a tentative deal to delay scheduled 25 percent Medicare pay cuts to physicians for one year, a deal that is expected to cost more than $19 billion. A vote on the measure could happen as early as today.
If passed by both the Senate and the House, the deal would mark the fifth time this year – including a one-month delay approved late last month – that Congress has acted to stave off pay cuts.
The uncertainty of looming pay cuts to doctors has weighed heavily on physicians and patients alike.
"This creates a lot of physician anxiety, but more importantly a lot of patient anxiety," said Scott Nelson, MD, a family physician in Cleveland, Miss. "Medicare patients are quite acutely aware of this problem, too, and there is significant concern that their patients will stop seeing them."
A recent study conducted by the American Academy of Family Physicians found that nearly 13 percent of respondents would consider discontinuing seeing Medicare patients if payment cuts were enacted, 62 percent indicated they would be forced to stop accepting new patients and 73 percent indicated they would limit the number of Medicare appointments in their practices.
"We have reached a point where all patients – children, their parents and their grandparents – face the real prospect of losing their doctors," said Roland Goertz, MD, president of the AAFP. "Medicare – the program designed to ensure that our elderly have access to healthcare – could force the very doctors who care for them out of business. And if that happens, all patients in that community – regardless of their insurance coverage – would lose access to needed healthcare."
The one-year patch will keep Medicare payments at current rates through the end of 2011 and is expected to cost roughly $19 billion. There is hope that Congress can use the 12 months to fix the badly broken Sustainable Growth Rate Formula (SGR) that has been used to calculate Medicare payments to physicians since enacted in the Balanced Budget Act of 1997.
But that has been promised before. In 2008, Congress delayed Medicare SGR payment cuts for 18 months with the same promise to use the time to develop legislation that would permanently fix the payment formula.
Meanwhile, the cost of the so-called "doc fix" continues to rise. Earlier in the decade the estimated cost to create a new payment formula was about $50 billion. Now, the Congressional Budget Office estimates it will cost well in excess of $300 billion.
Under the proposed Senate deal, the one-year stopgap will be paid for by adjusting tax credits that some individuals and families would receive for buying their insurance through the health insurance exchanges, beginning in 2014.
Even with the one-year deferment of the scheduled cut, Medicare payments continue to fall behind the pace of cost increases borne by physicians. According to the American Medical Association, there is already a 20 percent gap in Medicare payments and the increasing cost of caring for seniors, and that gap continues to widen.
As a result, Nelson said he limits which services he provides to patients based on what he knows will lose money versus what will allow him to break even.
"I have considered curtailing the number of Medicare patients I am seeing," he said. "I am becoming increasingly frustrated with what I am getting reimbursed for in an office setting with my Medicare patients, so I am trying to find ways to maintain my income by diversifying. The bottom line is I am going to have no choice but to limit some of the services I've offered historically to my patients."
