Payment cuts could mean patient access problems

AMA Leader Commentary. By Timothy T. Flaherty, MD March 4, 2002.

AMA LEADER COMMENTARY

A few words about current events in medical practice

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A message to all physicians from Timothy T. Flaherty, MD, chair of the AMA Board of Trustees.

What do you get when you add skyrocketing practice costs to dwindling Medicare payments? Answer: Physicians who can't afford to treat new Medicare patients.

Unfortunately, this isn't a hypothetical question. On Jan. 1, Medicare reimbursements to physicians were slashed by 5.4%. This precipitous drop in physician payment, combined with rapidly rising practice costs, could limit access to care for Medicare patients -- just as it did in 1992. That year, Medicare physician payments were cut by 3% and the percentage of physicians accepting new Medicare patients dropped from 79% to 75%.

This time around, we need to get to the root of the problem: the fatally flawed formula for determining the physician payment update. This formula pegs Medicare physician payment to the gross domestic product, but it doesn't take into account the cost of running a practice. More than two-thirds of Congress agree the problem needs to be fixed, and President Bush has said he will work the Congress to do just that. In testifying on the matter, Health and Human Services Secretary Tommy Thompson said, "We agree that changes should be made."

Unfortunately, legislation that would correct the update formula -- and modify the payment cut -- got sidelined before the holiday recess. We want to see this legislation brought to the floor for a vote -- and quickly. Otherwise, states with high concentrations of Medicare patients will pay the price.

Consider the case of Florida, home state of Representative Michael Bilirakis, the leading Republican sponsor of the House bill on Medicare payment.

In the coming year, Florida physicians will see Medicare payments plunge by $206 million -- second only to New York in total physician losses. That averages out to a whopping $6,260 per physician.

Florida patients will soon be feeling the aftershock. Today, 18% of Florida's citizens are Medicare beneficiaries -- the second highest concentration in the nation. Yet for every thousand Medicare patients in Florida, there are only 13.4 physicians -- well below the national average of 15.7. We predict the access situation will get worse. Here's why.

In addition to the Medicare payment cut, physicians in Florida are getting squeezed by double-digit increases in liability insurance premiums, with costs in some counties escalating by 45%. At the same time, they're still paying for unfunded Medicare mandates -- and spending too many hours on uncompensated paperwork.

Given this environment, it is likely that many Florida physicians will be unable to afford new Medicare patients. Others may stop taking them altogether. Still other physicians may simply close shop. In Florida, nearly 60% of family physicians are 50 or older. Recent surveys show that many physicians in this age bracket are considering early retirement.

That's a lot of Florida physicians who may be watching the exits. And a lot more patients who stand to lose access to care. It's no wonder Bilirakis is leading the charge to fix this problem.

The payment cuts aren't just an issue for Florida, either. According to news reports, Medicare patients are already having problems finding physicians in cities like Atlanta; Phoenix; Albuquerque, N.M.; Denver, Austin, Texas; Annapolis, Md.; and Spokane, Wash., as well as in the states of California and Idaho. We expect to hear more such reports in the days to come.

In the meantime, we continue to lobby aggressively in Washington, D.C. Before Congress reconvened in January, we joined forces with the specialty societies and other health professional groups. Together we sent letters to every member of Congress, urging them to get this issue out front.

More recently, we conducted an aggressive advertising campaign in select areas of the country. Throughout this time, we have relied on our champions in Congress, such as Reps. Sherrod Brown (D, Ohio), Ernest Fletcher, MD (R, Ky.), John Dingell (D, Mich.), Nancy Johnson (R, Conn.), Billy Tauzin (R, La.), Mike Bilirakis (R, Fla.), Bill Thomas (R, Calif.), Lois Capps (D, Calif.) and Greg Ganske, MD (R, Iowa), as well as Sens. James Jeffords (I, Vt.), Jon Kyl (R, Ariz.) and John Breaux (D, La.).

Even with their support, however, we can't get the job done -- unless we get help from you. More than 30,000 physicians have already contacted their representatives about how the cut to physician payment will impact patient care. Most of our leaders have gotten the message. But not all.

We need your voice to bring the message home. Urge your representatives to call on their leaders in the House and Senate -- and demand that a floor vote be scheduled. And quickly. Write, phone, or e-mail them through the AMA grassroots action center Web site (http://www.ama-assn.org/go/grassroots).

The practice you save may be your own.

Dr. Flaherty, a board certified radiologist from Neenah, Wis., was AMA board chair during 2001-02.