Orthopedic surgeons reassess their participation in Medicare

A new funding initiative may increase physician payments by $54 billion over 10 years, but some orthopedists remain concerned.

WASHINGTON — Despite Congress’ mid-February approval of a $397.4 billion appropriations package and a moderate reimbursement increase of 1.6% outlined for 2003, many physicians are reconsidering whether it is feasible for them to continue participating in the Medicare program.

In effect, physicians must choose one of three courses of action:

• continue to serve as a participating physician,
• be a nonparticipating physician, or
• opt out of the Medicare program completely.

For some veteran orthopedic surgeons like Stuart Hirsch, MD, of BioSport Orthopaedics and Sports Medicine Associates in Bridgewater, N.J., the decision whether to remain a participating Medicare provider is not based strictly on money.

“I have been in practice for 25 years and many of my patients who are now on Medicare were my patients when they were young. I feel very much a part of this community and a responsibility to care for these patients, who have depended on me for many years,” said Hirsch, who is the health policy, patient & practice issues section editor for Orthopedics Today.

“I feel a sense of commitment and community to serve them. It’s my sense that it would be a significant hardship for many of my patients if I were to limit the number of Medicare patients I saw or opted out of Medicare completely.”

Should I stay or should I go?

Participating physicians agree to accept Medicare payment based on a designated fee schedule that identifies all covered services as well as the approved payment that Medicare will pay for a specific service (ie, no “balance billing”). A participating orthopedic surgeon must also agree to accept all Medicare assignments.

Medicare pays 80% of the approved fee schedule charge directly to the participating orthopedic surgeon. The surgeon is then responsible for collecting the remaining 20% of the Medicare-approved charge from the patient.

Like their participating counterparts, nonparticipating orthopedic surgeons are restricted in the amount they can collect from Medicare for covered services furnished to patients. Nonparticipating physicians are subject to the Medicare fee schedule, but the fee schedule for nonparticipating physicians with assignment is 5% lower than that of participating providers.

The key advantage to choosing nonparticipation, or “non-par” status, is the freedom to decline Medicare assignment, said Robert P. Nirschl, MD, founder and chair of the Nirschl Orthopedic and Sportsmedicine Clinic in Arlington, Va.

If a nonparticipating physician does not accept assignment, Medicare pays the patient — not the physician — for the claimed benefit. Consequently, the physician faces the higher risk of collecting the entire payment for covered services directly from the patient.

Nonparticipating physicians who do not accept assignment can ultimately bill the patient for 115% of the nonparticipating fee schedule approved charge, or 9.25% more than participating physicians, according to the Centers for Medicare and Medicaid Services.

A growing trend?

Nirschl believes the number of orthopedic surgeons who are refusing to see new Medicare patients is growing for various reasons.

“We screen our new patient scheduling so that when patients call, we ask them, ‘What kind of [musculoskeletal] problem do you have?’ If it’s a problem outside our priority interest, we’ll communicate that we’re not really dealing with that kind of problem anymore. We can make some recommendations in terms of who else they could see, or we’ll suggest they ask their family doctor to make a recommendation,” he said.

“We are starting to limit access because the economics with certain patient problems just don’t make sense anymore. We made that decision about two years ago, but it’s been magnified over the last six months,” Nirschl said.

In light of declining Medicare reimbursement rates over the past year, physicians have had to reconsider the ideal payer mix for their practice. According to Colorado’s Division of Insurance, only 40% of that state’s physicians said they were accepting new Medicare patients shortly after the 2002 reimbursement rates were announced. And Colorado hasn’t been an exception.

Likewise, “There are some physicians out there whose caseloads are so full that there is no more room in their schedule to take new patients,” said David R. Mauerhan, MD, orthopedic surgeon at the Carolinas Medical Center in Charlotte, N.C., and a member of the Orthopedics Today editorial advisory board.

As the senior population continues to grow each year and as patients live longer, Medicare enrollment will continue to escalate dramatically over the next decade, placing an even greater stress on overburdened health care providers, he said.

Opting out

Orthopedic surgeons can also choose to opt out of Medicare completely. In doing so, a physician makes the decision not to accept payment from Medicare for any services performed on Medicare patients, except emergency and urgent care. Patients must also agree not to accept Medicare payment for those services.

Physicians who opt out of Medicare completely can only provide covered care to Medicare patients through a private contract signed by both the physician and patient prior to service. In such cases, the patient is billed for the entire negotiated rate.

Taking into account the 5.4% decrease in Medicare reimbursement last year and the possibility of a 4.4% percent decrease in 2003, Mike Pulaski, CEO of Peachtree Orthopedic Clinic in Atlanta, said he found himself in the unenviable position of recommending that his group drop from the Medicare program.

“It is a prudent business decision [at this point],” Pulaski stated in his commentary in a recent issue of Physicians Practice, prior to the announcement of the new appropriations package. “I just don’t know if it will be in 2003 or the next time physician reimbursement is cut.”

A recent survey sponsored by the American Medical Association of physicians from all specialties found that 42% plan to drop Medicare if there are further decreases in reimbursement after this year. If this prediction is true, “We will see a vicious cycle produced by the cost/access dichotomy,” Pulaski said. “Patients will seek care from a dwindling number of participating physicians, and physicians will see an increase of Medicare patients in their payer mix, which in turn will force them to severely restrict patient access or drop those patients altogether.”

A tough course to follow

While some orthopedic surgeons may opt out to avoid the aggravation of Medicare policy, those that do will not have an easy road, Mauerhan said.

“You can’t forget that a decision to opt out means you cannot accept any payment from Medicare for two years,” he told Orthopedics Today. “After two years, you might find that no one wants to see you anymore.”

Orthopedic surgeons must be practical about the situation, he said. “People like to talk about opting out of Medicare, and they’ll say, ‘I’m going to opt out and people are going to come see me anyway.’ But the reality is that there are still many orthopedic surgeons who will accept Medicare assignments. If you don’t continue to take those assignments, you’ll lose most of your patients to someone else.

“It’s unrealistic for most doctors to think that they’re going to opt out of Medicare and patients will continue to come see them,” said Mauerhan, whose caseload consists of 75% Medicare patients.

While a few orthopedic surgeons with a special niche or skill may be able to survive without Medicare by creating one of the new “boutique” medical clinics, they are the exception rather than the rule, he said. “There is only room for two or three practices like that here in Charlotte, and we’ve got 1.5 million [residents].”

To complicate matters, most other insurers’ fee schedules mimic those of Medicare, so drastic changes in Medicare reimbursement will eventually affect reimbursements from other payers.

Nirschl, whose caseload consists mostly of sports medicine injuries, said 10% to 15% of his clinic’s patients use Medicare, “but many of them are millionaires. The other aspect that we have here in the Washington, D.C., area is that we have many patients with PhDs and advanced degrees; nearly all of them are college-educated, which is different from a lot of places throughout the country. They ask a lot of questions, and they know what questions to ask, which is good communication. But it may also increase time spent, which in turn stresses financial viability.”

Surgeons within a group practice may also disagree on which path to choose. “Many younger physicians just starting out have larger financial obligations, like student loans, and may have a different outlook than someone who has been practicing for 20 or 30 years and doesn’t have those concerns,” said Hirsch, whose caseload consists of approximately 20% Medicare patients.

Younger physicians may also feel less obligated to see as many Medicare patients if they don’t share the same sense of “longstanding mutual commitment” with their patients, according to Hirsch. “I would feel very uncomfortable if I had to tell patients, whom I’ve taken care of for multiple generations, that I’m not taking care of them or their [parents] anymore.”

Specialty concerns

The decision to participate, not participate or opt out also depends on each physician’s specific caseload.

“I’m primarily a joint surgeon, so for me, a large part of caseload will always be Medicare patients,” Mauerhan said. “A sports medicine orthopedist, on the other hand, won’t be affected as much by the Medicare situation because he’ll see younger, more active patients.

“You also have to consider the differences between how primary care and internal medicine doctors approach the Medicare situation and how specialists, particularly orthopedic surgeons, view it.”

Ultimately, the most significant change in the Medicare situation has to come from legislation, Mauerhan said.

“I don’t think politicians see the need to drastically change the fee schedules [for orthopedic surgeons] because they don’t anticipate us dropping off en masse from seeing Medicare patients. It’s like the malpractice insurance crisis; people say that doctors are threatening to leave practice, but no one did anything until the doctors shut down the emergency rooms or quit taking call or seeing certain patients. That’s the only thing that gets people’s attention,” he said.