Doctors have been threatened with cuts to their Medicare fees every year for nearly a decade. And every year, many tell the American Medical Association they will stop accepting Medicare patients or stop practicing altogether if the reductions go through.
This year’s AMA survey, to be released today, will show much the same thing. If Congress doesn’t act soon to forestall cuts to Medicare physician payments, the AMA says, Arizona seniors likely will have fewer doctors willing to take their Medicare cards.
That’s pretty scary stuff for retirees living on fixed incomes. But it’s also likely that Congress will find the money — as it has every year — to prevent the fee reduction, which this year is pegged at 10 percent.
“Unfortunately, it’s a threat that doctors make every year so that Congress will do the right thing,” said Dr. Andrew Carroll, a Chandler family practitioner. “What other profession looks at a pay cut every year? And it’s always so lastminute.”
The problem is a 10-year-old formula that underestimates the growth and expense of Medicare, a gap that will only worsen as the leading edge of the baby boomers starts qualifying for the program in the next few years.
Each year, doctors are overspending what the formula says they should spend while also looking at higher costs due to inflation.
The AMA says the costs of running a medical practice have gone up 20 percent since 2001.
Rather than raise premiums or cut benefits, both politically unpalatable options, Congress approved a plan that cuts the amount of money physicians are reimbursed for treating Medicare patients.
“The formula is clearly flawed,” said Dr. Leonard Kirschner, president of the Arizona AARP and former director of the Arizona Health Care Cost Containment System. “If you fix the formula to fix what’s happening with utilization, you blow the budget. So you’ve got to find it somewhere else.”
Estimates vary, but it could cost as much as $60 billion over five years to rewrite the formula so that it corresponds to actual costs, usage and inflation.
Doctors say that’s what needs to happen, or they’ll have no choice but to stop accepting Medicare.
“Congress made a commitment to senior citizens to pay for medical care,” said Dr. Cecil Wilson, a Florida family practitioner and chairman of the AMA board. “If these cuts go through, physicians will find they just cannot afford to provide the care.”
Already, some doctors are opting out of Medicare.
Carroll does not accept new Medicare patients, but continues to treat existing patients after they qualify. He gets frequent calls from people who say they’re having trouble finding an East Valley physician who accepts Medicare.
“Their paperwork is much more onerous than any of the health plans, and they don’t pay very well,” Carroll said.
A congressional study last summer, however, showed most Medicare beneficiaries weren’t having trouble finding care.
Concerns “were heightened in 2002 when Medicare’s formula for setting physician fees required a 5.4 percent reduction,” according to the report by the General Accountability Office, the nonpartisan investigative arm of Congress. “Only a small fraction — less than 4 percent — of physicians responded that they did not accept any new Medicare patients.”
But Wilson said another study by the Medicare Payment Advisory Commission found one-quarter of seniors reported having trouble getting access to Medicare doctors.
“Physicians have said that they will find it hard to pay salaries and turn on the lights,” Wilson said. “It certainly is counterintuitive to think that a small business can take cuts of 5 percent a year and continue to do what it’s doing.”
Studies show fewer new physicians are choosing family practice, and Carroll said it’s not as lucrative a career as people may think.
“I’m still paying student loans, and I graduated in 1996,” he said. In addition, costs are going up for everything from nurses to gowns and table paper, to converting offices to electronic medical records.
“I don’t think doctors are going to say: Medicare patients get out. Doctors are much more compassionate than that,” Carroll said. “But they will say: No more.”