Physicians turning away Medicare patients

UNION-TRIBUNE STAFF WRITER January 8, 2006

Medicare patients seeking their first appointment with family practitioner James Hay in Encinitas are being told to find another doctor.

EDUARDO CONTRERAS / Union-Tribune Dr. James Hay spoke with Medicare patient Anne Geis after an examination at the North Coast Family Medical Group in Encinitas. Hay is one of a number of doctors who say they will no longer accept new Medicare patients because of government reimbursement-rate cuts. Same thing for Medicare enrollees trying to become patients of Dr. Carol Young, a rheumatologist in Escondido.

Hay and Young are among doctors nationwide who are rejecting new fee-for-service Medicare patients because they're fed up with the government's reimbursement rates. A 4.4 percent cut went into effect Jan. 1.

The reduced pay is compounded by a 5 percent drop in California's reimbursement rate for doctors treating Medi-Cal patients. That cut also took effect at the start of the year.

Even before the latest cut, Medi-Cal's per-patient reimbursement rate was the lowest of equivalent programs nationwide. And San Diego County's Medicare reimbursement rate for physicians is much lower than that of most other counties in California, especially considering this county's high cost of living.

"We already run with a very narrow margin because of low reimbursement," Hay said.

The cost of operating his practice has risen at a rate substantially higher than Medicare's 1.5 percent reimbursement increases in each of the past three years, he explained.

The doctors’ protests come at a time of confusion and frustration for tens of millions of Medicare beneficiaries who are paying higher premiums this year and grappling with complex choices for Medicare's new Part D prescription drug plan.

"I want to keep taking care of these patients, but my staff doesn't expect to be paid less in 2006 and my lease goes up every year," Young said.

Medicare beneficiaries make up one-third of her patients.

Based on calls to his Tupelo, Miss., office in the past few days, American Medical Association President Dr. Edward Hill said a significant percentage of physicians nationwide is also moving toward rejecting new Medicare patients.

"The problem is not (pay cuts) this year, but year after year after year," said Hill, a family practitioner. "Now, the frustration across the country is generalized."

From this year to 2011, physicians' expenses will increase 15 percent while Medicare reimbursement will decline 26 percent, according to AMA projections.

The San Diego County Medical Society, which represents physicians, says this may exacerbate a local shortage of doctors. It has said many of them are retiring early or have found other lines of work because of disenchantment with their pay.

Hay said the situation continues to worsen, with fewer specialists willing to practice in the county.

In Escondido, internist Dr. Akber Safi said he quit his practice in June because the "Medicare, Medi-Cal and insurance company bureaucracy wouldn't allow me to do what I'm trained to do ^ take care of patients." He has opened an import-export business.

Greg Knoll, an attorney who directs the Consumer Center for Health Education and Advocacy in San Diego, said he often can't find physicians to treat poor patients.

"Unless you're in a managed-care plan where doctors are contractually obligated to see you, we can't find an orthopedic specialist to see Medi-Cal patients now," Knoll said. "If the government thinks Medicare cuts won't have the same disastrous effect on elderly and sick people that (past) cuts in Medi-Cal have had, it is sorely mistaken."

Many San Diego County doctors who were interviewed last week said they hope that federal legislation to cancel the 4.4 percent Medicare cut ^ which fell apart in late December because of political squabbling in Congress ^ will eventually be passed.

So do Medicare officials, who are counting on Congress to pass the Deficit Reduction Act soon after it reconvenes Jan. 31. Unless that one-year waiver is enacted, "we have no choice but to implement" the 4.4 percent reduction, said Herb Kuhn, director of Medicare's Center for Medicare Management in Washington, D.C.

Medicare leaders are very concerned about the cut's impact on doctors and patients, Kuhn said. "We need stability and predictability in payments. We do know the current system is offering neither," he added.

But some system is necessary to control what Kuhn called "rapid growth in the volume of (health) services and spending increases," which have prompted ongoing government efforts to standardize medical care and introduce stricter cost-control measures.

Although Congress and the Center for Medicare and Medicaid Services agree that the federal government's formula for setting reimbursement rates is flawed, efforts to change it have been a political hot potato. The formula assumes that health expenses have kept pace with a cost-of-living measure called the gross domestic product.

In reality, health-care costs have risen much faster than the GDP.

The problem may affect care provided to privately insured patients in managed-care organizations, which enroll millions of Californians. That's because many HMOs tie their reimbursement rates to those set by Medicare.

"Doctors in California are on the brink," said Elizabeth McNeil, director of federal issues for the California Medical Association. "Our private payment rates from private HMOs are 30 percent less than national averages, and Medi-Cal rates rank in the bottom third to last, depending on where you are in the state. So we've been hit from all sides."

Many doctors are limiting their practices but doing so quietly, because they don't want to be stigmatized as abandoning patients, McNeil added.

But physicians' concerns aside, "there's another side to this story ^ the impact on the Medicare beneficiary," said Kirsten Sloan, a spokeswoman for the American Association for Retired Persons in Washington, D.C.

This year's 4.4 percent Medicare cut will translate into $10.8 billion in reduced payments to doctors during the next five years, according to Medicare estimates. If Congress passes the Federal Reduction Act to override the cut, Medicare beneficiaries would absorb $3 billion to $4 billion of the total amount by 2011. That translates to higher co-payments for each visit to the doctor and more expensive Medicare Part B premiums, which are usually deducted from beneficiaries' Social Security checks.

AARP representatives say that physicians should not back down from taking Medicare patients because of this year's Medicare cut.

"We think this is an unfortunate orchestrated campaign on behalf of the physician community that is trying to make a point," Sloan said. "Well, they're making that point at the expense of Medicare beneficiaries and their health."

Knoll, the health advocate, said any decision to trim physicians' fees that brings about reduced access to health care only spurs more patients to wait until they are severely ill and need to visit an emergency room. There, the medical care can cost thousands of dollars per day.

The American and California medical associations, both representing physicians, conducted separate surveys last year asking whether their members would accept new Medicare patients if the 4.4 percent Medicare cut went through. Forty percent of AMA members said they would reject such patients, as did 38 percent of the California group's members.

"We're being used as a playing card, being traded back and forth by the House and Senate, who don't recognize that what they're doing is a total abandonment of the patient," said Dr. Ted Mazer, president of the San Diego County Medical Society.

Mazer offered two examples to show how Medicare payments to doctors have fallen.

In 1988, he received $2,300 for an operation involving microsurgery of the ear. Today, he gets $1,100 for the same procedure.

Similarly, Medicare paid Mazer $500 for a tonsillectomy in 1988. Now, it reimburses him $287, he said.

"And there's no change in the amount of work, time or liability" shouldered by the physician, Mazer said.