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Medicare physician payment cut pushed back, physicians remain cautious
As delays mount and stopgap solutions are set up, many are looking for a long-term solution
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A recently passed 6-month reversal of a 21.1% reduction in Medicare physician payments will do little to fix the problem in the long run, according to several physicians.
On June 18, the Senate voted to approve legislation that temporarily reversed the cut and raised payments 2.2% until Nov. 30. On June 24 the House of Representatives voted 417 to 1 to pass the same legislation, and President Barack Obama signed the bill into law on the morning of June 25. Many are cautioning this only delays an even more troublesome circumstance, as the cut is now scheduled to take place by Dec. 1 – and be higher than 21%.
The focus of the debate grew less medical and more political as the legislation saw more and more delays, with Democrats reportedly being displeased with the current bill’s lack of scope.
The cut took effect June 1, after a 19-month deferment was passed in the House of Representatives but failed to come up for a vote in Senate prior to their Memorial Day recess. The House voted 245 to 171 to pass the deferment, which would have delayed the reductions through 2011.
The Medicare payment cut was originally scheduled to take place on Jan. 1 of this year. This was the third time since February that the bill had been stalled.
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Physicians now wary
Prior to the House vote, many surgeons voiced concern over patient access to care without a long-term fix of the system.
“The failure of Congress to stop a 21% Medicare fee cut for physicians seriously impairs the ability of our seniors to receive timely, high-quality care,” said David A. Wong, MD. “As we saw on the front page of USA Today on Friday, June 18, many physicians can no longer afford to see Medicare patients and have opted out or are restricting the number of Medicare patients in their practices.
“A less recognized secondary effect of the cuts is the necessity for practices to reduce overhead,” he added. “This is mainly accomplished by staff reductions – at a time when the economy is poor and unemployment is high.”
Following the June 24 vote, The Centers for Medicare & Medicaid Services (CMS) has directed Medicare claims administration contractors to discontinue processing claims at the negative update rates and to temporarily hold all claims for services rendered June 1, and later, until the new 2.2% update rates are tested and loaded into the Medicare contractors’ claims processing systems.
“Effective testing of the new 2.2% update will ensure that claims are correctly paid at the new rates,” a CMS statement read. “We expect to begin processing claims at the new rates no later than July 1, 2010. Claims for services rendered prior to June 1, will continue to be processed and paid as usual.”
Sustainable growth rate
The physician payment cut stems from the sustainable growth rate (SGR), a key factor in annual Medicare physician payment updates. The SGR has produced negative payment updates for several consecutive years.
According to the American Medical Association (AMA), the 6-month Medicare payment fix would cost about $6.5 billion over 10 years; the original 19-month fix would have cost $22.9 billion over the same period.
Prior to the Senate passage, House leadership it would not act on a 6-month fix to the flawed SGR until the Senate passed an extended package that would include long-term unemployment benefits and state funding to address layoffs and furloughs. It did, however, vote for the Senate bill without those extensions 6 days later.
“The inadequate legislation on physicians’ fees that Senate Republicans allowed to pass today is a great disappointment,” said House Speaker Nancy Pelosi (D-Calif.) prior to the House passage.
A public campaign
The Senate’s trepidation angered the AMA, which has made numerous attempts at urging the public to become involved in the effort to oppose the reduction.
Starting June 3, the AMA released a campaign of television, radio and newspaper ads imploring citizens to put pressure on the U.S. Senate.
“Delaying the problem is not a solution,” stated Cecil B. Wilson, MD, president of the AMA, in a release. “Continued short-term actions are creating severe instability that harms seniors as physicians make decisions to protect their practices from Medicare’s volatility.”
In late 2009, members of the Senate voted 53 to 47 against a bill that would have repealed the SGR formula and provided Medicare physicians with a 0% payment update for 2010.
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International reflection
“Obviously everyone’s concern is what will happen if the cuts occur, and the answer is there will be a lot of people limiting the number of Medicare patients that they see,” said Jack M. Bert, MD. “Having recently spoken with orthopedists from England, Switzerland, Italy, Germany and France while attending a meeting in Europe, when patients are part of a severely discounted government-reimbursed program, they simply limit the number of patients they see from that system.”
“Wait times are significant for the discounted, government-associated patients, whereas those with private insurance are seen relatively quickly and treated more rapidly,” he added. “Thus, this response is universal to discounted government care.” – by Robert Press and Lee Beadling
Jack M. Bert, MD, can be reached at 17 W Exchange St., 307 Gallery Medical Building, Saint Paul, MN 55102; 651-223-9204; bertx001@tc.umn.edu.
David A. Wong, MD, can be reached at Denver Spine Center, 7800 E. Orchard Road, Suite 100, Greenwood Village, CO 80111; 303-783-1300; e-mail: ddaw@denverspine.com.