Bruce Japsen, Contributor | January 2013 | With Congress and the White House once again waiting until the 11th hour to come up with an agreement to avoid the so-called fiscal cliff as well as the so-called “doc fix” on Medicare payments, a flood of frustrated physicians are likely to abandon the health insurance program for the elderly, doctors and medical groups say.
Doctors are upset at the lack of a permanent solution for dramatic cuts to doctor payments from the Medicare health insurance program for the elderly under the so-called sustainable growth rate, or “SGR” formula or so-called “doc fix.” There was still no final Congressional action as of this morning with U.S. House votes pending, meaning doctors enter this New Year with a cut in Medicare payments of nearly 27 percent.
And even if Congress does head off the cut temporarily as it has in the past, doctors are increasingly leaving the Medicare program given its unpredictable funding.
In a pre-New Year’s alert to member doctors, the American Medical Association said it is “inexcusable that Congress is once again putting the 47 million Medicare patients and the practices of physicians who provide them needed health care at significant risk.”
Already, one in five physicians are restricting the number of Medicare patients in their practice and one in three primary care doctors – the providers on the front lines of keeping the cost of seniors’ care low – are restricting Medicare patients, according to a 2010 AMA survey of more than 9,000 doctors who care for Medicare patients.
But this latest gridlock had the AMA on high alert, because the federal government had already said it would not hold claims and Medicare carriers were expected today to begin processing payments for physicians services after Dec. 31 under the typical 14-day cycle required by law. “Payment for these claims would be based on the new, lower fee schedule conversion factor of $25.0008, as opposed to the current rate of $34.0376,” the AMA said in its alert.
Thus, the AMA was advising doctors to do what they had to do to mitigate their losses given the latest Congressional impasse as well as continuous delays and short-term fixes to Medicare payment.
“For those physicians who are forced into the untenable position of limiting their involvement with the Medicare program because it threatens the viability of their practices, we urge that patients be notified promptly so that they, too, can explore other options to seek health care and medical treatment,” the AMA added. “The Medicare program has become unreliable and its instability undermines efforts by physicians to implement new health care delivery models that stand to improve value for seniors and other beneficiaries through better care coordination, chronic disease management, and keeping patients healthy.”
It’s also not good news to the health insurance industry with companies like UnitedHealth Group (UNH), Humana (HUM), Aetna (AET) and others seeing greater numbers of seniors flocking to their Advantage plans that contract with the Medicare program to provide seniors with health benefits. They need doctors to participate if they are going to provide seniors with adequate medical care provider networks.
Only short-term fixes – 14 of them since 2002 – have been passed as a stopgap measure to prevent major cuts in physician Medicare reimbursement. The payment formula came to be as part of the Balanced Budget Act of 1997 and has never been corrected permanently by Congress.