Accepting Medicare is going to cost you

A new study pinpointing how much doctors will lose bolsters worry that practices will limit the number of patients on Medicare.

By Markian Hawryluk, amednews staff. April 22/29, 2002.

Washington -- The average solo physician practice will lose almost $8,000 in revenue this year unless cuts in the physician payment update are reversed, according to a new analysis by the American College of Physicians--American Society of Internal Medicine.

"The more Medicare patients a physician's practice treats, the more its income will fall under the program's reimbursement cuts," the college said. "This will create a clear incentive for medical practices to limit the number of Medicare patients for which it provides care."

An AMA-backed bill that would limit the current 5.4% cut to 0.9% continues to gain support, with 317 co-sponsors in the House and 71 in the Senate. Lawmakers have also expressed a desire for a longer-term fix to the update problem as part of a larger Medicare reform package to be considered later this year.

The analysis found that a typical solo general internal medicine practice, which derives about 30% of its revenues from Medicare, would experience a decline of $7,884.60, while a typical four-physician group practice would experience cuts of $31,538.40 this year. Although the exact payment updates for future years are not yet known, the Centers for Medicare & Medicaid Services expects continued cuts in physician reimbursement through 2005 under the current formula. [...]

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