Medicare Payments To Doctors Could Drop 25 Percent

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Update: (AP) - Congress has agreed to a delay Medicare payment cuts to doctors. The House approved a bill postponing a 23 percent cut in doctors' pay that had been scheduled to take effect on Dec. 1. The Senate had already passed the short-term reprieve.

All doctors could see the reimbursement they receive for Medicare patients drop in December. These cuts are the latest installment of the 1997 Balanced Budget Act and attempts to rein in spending on health care for the elderly. This issue is on the agenda for the lame duck session of Congress that begins Monday.

When the boss poked his head out of the office and said, "Martha, you should take a look at these Medicare cuts," I grimaced. Not that story again: Congress tries to reduce payments to doctors, doctors say they’ll cut services or stop seeing Medicare patients and Congress backs down. "OK," I said, "but let’s start with why this has become an annual, if not seasonal, story." For that, I turned to Medicare expert Stuart Altman, a professor of national health policy at Brandeis University.

"Back in 1997, as part of the Balanced Budget Act, the Congress said total physician income — which is prices times quantity — cannot go up by more than the increase in our national income," Altman said. "In principle it sounded like a good idea: why should physician income go up more than anybody else?"

But in reality, Altman said, the number of services, especially MRIs and other diagnostic tests, were increasing 10 to 12 percent a year — at least double the national income. Congress started telling doctors they had to take a cut to make the formula work. The annual fights began, with Congress postponing the adjustment year after year. The accumulated effect this year is 23 percent. The Balanced Budget Act would trigger another 2 percent on Jan. 1.

The American Medical Association is asking Congress to postpone these Medicare cuts until January 2012, giving doctors and lawmakers just over a year to work on a remedy.

"This is a bit much, don't you think, like, that's nuts," said Robert Lebow, a geriatrician and internist in Southbridge, who breaks down "nuts" in two ways.

"No. 1 is, my income will go down a huge amount. Seventy-five percent of my people are on Medicare. The second thing is I am now 66-years-old, so I've had Medicare for a little over a year, and I'm going to have a lot of trouble finding doctors, a lot of doctors are going to drop out," Lebow said.

Other doctors are talking about seeing Medicare patients less often.

"I’m starting to call it elder cleansing. Let’s get rid of the elders," said Cora Pucci at the Newton Senior Center. Pucci said the Medicare cuts are part of a pattern she sees to pressure doctors and squeeze health care for elderly people like herself.

"There’s rush and I don’t like the rush in hospitals because we’re not — I’m really scared to get sick," Pucci said. Pucci had a one-word response to the question of why she's afraid of getting sick: "Rush."

Some patients and doctors have become numb to this repeated debate about Medicare cuts and expect Congress will postpone them again, as it has done for the last decade. Altman said that seems the likely scenario, with House leaders pledging to reduce, not add to, the national deficit. The estimated cost of clearing the backlog of postponed cuts and funding a formula more in line with health care spending is $350 billion.

"Fixing this problem adds $350 billion to the deficit, unless you find other monies to pay for it. Well that means either huge cuts in other parts of the program or a tax increase," Altman said. "And of course, we don’t have either."

The American Medical Association is asking Congress to postpone these Medicare cuts until January 2012, giving doctors and lawmakers just over a year to work on a remedy.

There are a number of plans on the table and physicians around the country are weighing in. Chief of Geriatrics at Tufts Medical Center, Richard Dupee, said it’s time to start increasing the fees we all pay into Medicare.

"I don’t know any other way to support a system that is basically running out of money," Dupee said.

"Now alternatively, it’s time the physicians sit back and find a way to reduce the cost of medical care in this country, by stopping the ordering of unnecessary tests, communicating through the electronic health record, and being a little more judicious in the kind of things that we do. So not every back pain or headache needs an MRI."

In the meantime, many physicians are preparing for a short-term cut in Medicare payments, in case Congress does not address the issue in the lame duck session and waits until early next year.

This program aired on November 10, 2010.

Martha Bebinger Reporter
Martha Bebinger covers health care and other general assignments for WBUR.



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