MEDICARE CUTS

A contentious Congress finally averted a catastrophic government default but it did not calm the financial markets, undermining the credit worthiness of Uncle Sam.   It is troubling to the physicians and the hospital executives, who could see their Medicare reimbursements trimmed in the process. Those potential cuts would come at a time when providers already face other major Medicare reductions. The bill did not include a "doc fix" to the Medicare reimbursement crisis and physicians have been “double crossed” by our self-centered politicians once again. Physicians are scheduled for a 29.5% decrease on January 1, 2012, unless Congress intervenes and with the current hostilities it is unlikely that it will.

The debt legislation lays out a complex path to additional Medicare pay cuts.  A summary of the bill posted on the White House Web site explains that potential Medicare cuts would be "limited to the provider side” while the providers had sought reimbursement relief.  The end result is disheartening as lower Medicare pay would cause many physicians to limit the number of Medicare patients they treat — thus reducing access to care.

The debt ceiling/deficit reduction plan offers a potentially false promise to the patients, it guarantees benefits but, by ignoring Medicare physician payment issues, it potentially denies the actual medical care Medicare beneficiaries will be able to access.  What dials up the anxiety factor further is that the bill passed by Congress does not specify how automatic cuts would be applied to Medicare, likely it will be applied to Part A and Part B (provider services).

The potential for Medicare provider cuts was not lost on The Wall Street. Stocks for healthcare companies, including those that operate hospitals.  The AHA (American Hospital Association) worries that the reimbursement would be sacrificed for the sake of physicians while the physicians worry that the hospitals (a larger lobby) will take over the division and distribution of Medicare payments to the physicians as proposed by Obama Care advocates. The hospitals are proactive in opening their “own clinics” to control the healthcare “pie”.  We are seeing a greater trend in the hospitals owning sub-specialty clinics to compete for the “Medicare pie.” The hospitals, with the advent of Hospitalists do not see primary care physicians being a threat and most PCP’s are being replaced by mid-level providers such as the ANP’s and the PA’s who feed the business to the hospital by utilizing their lab and radiology services.

Organized medicine has not given up petitioning Congress for the elusive doc fix, which almost became a part of the 2010 healthcare reform law before Democrats erased it because of its high cost.  However AMA has repeatedly proven to be ineffective in lobbying for the profession it represents.  Instead of trying to tame runaway costs through "futile" price-control solutions such as the sustainable growth rate formula we ought to encourage our Senators to introduce reforms to promote and reward quality and efficiency.  Such an indirect approach to cost control would have a better chance of succeeding and would weed out the “high rolling” providers who abuse the system by providing sub-standard care by employing mid-level providers who due to lack of confidence and training over use the system and refer patients for unnecessary sub-specialty care.  

What Congress needs to do is to fix the Medicare reimbursement formula that heavily favors procedures over cognitive evaluation.  In the current reimbursement situation Primary Care specialists will be soon extinct and you can expect more and more healthcare dollars being wasted by mid-levels who lack the training, diagnostic skills and experience of a good Primary Care Physician. 

 Harbir Makin, MD