Medicare pay cuts, access problems linked

Many physicians are not taking new Medicare patients and are cutting costs to deal with reimbursement shortfalls.

By Markian Hawryluk, amednews staff. Sept. 9, 2002.

Washington -- Physicians have warned Congress that the prospect of four consecutive years of negative Medicare payments updates, which began this year, would impact patients' access to care. Now an independent survey of state Medicare counseling programs and advocacy groups has shown that doctors were right -- new Medicare beneficiaries are finding it increasingly difficult to find a physician.

The survey, conducted by the Medicare Rights Center, found that new Medicare patients in 15 of the 30 states surveyed and the District of Columbia reported difficulty in accessing physician care this year after payments were slashed 5.4%.

Still with the program
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"This may be a looming emergency," said Robert Hayes, president of the Medicare Rights Center. "When a patient can't find a physician who accepts Medicare, the patient often goes without needed care."

New Medicare patients in 15 of 30 states surveyed say it's harder to find doctors.

In eight states -- Arizona, Missouri, New Hampshire, New Mexico, Rhode Island, Tennessee, Texas and Virginia -- the survey found a higher number of calls to Medicare help lines from people who could not find doctors taking new Medicare patients. Officials from the Arizona State Health Insurance Program said many doctors considered patients they hadn't seen in the past year as new patients as well. In three states, respondents said lower payment rates drove doctors not to take new patients.

Representatives from Arizona, New Jersey, Tennessee and Virginia also reported getting a higher number of calls from patients unable to find specialists. Dermatologists, oral surgeons and psychiatrists were among the specialties most frequently cited.

The Medicare Rights Center called for a bipartisan panel to examine Medicare payment issues, including whether physician reimbursement rates used by the Federal Employees Health Benefits Program or Medicare managed care organizations might be extended to fee-for-service payments.

Physicians continue to lobby

The AMA said the survey was further validation of the argument doctors have made on Capitol Hill.

"It is absolutely essential to fix the Medicare payment for physicians, and surveys that show an increasing number of physicians who are not taking new Medicare patients should be the stimulus to sign into law the House-passed bill, which would fix this problem," said AMA President-elect Donald J. Palmisano, MD. "This is what the AMA has been predicting for some time now."

The survey data back the notion that physicians have taken the intermediate step of limiting their number of Medicare patients, rather than opting out of the program altogether. Only 1,100 of the 850,000 doctors nationwide have opted out, the center said.

29% of physicians plan to lay off staff or already have due to Medicare pay cuts.

A recent AMA member survey supports those findings. Conducted in the first half of 2002, it found that 92% of physicians are participating in Medicare this year, and that 83% would remain in 2003.

The vast majority of physicians surveyed (83%) said they accept all new Medicare patients, with only 4% taking no new Medicare patients. More than one-third of the doctors surveyed said they were contractually obligated to take all new Medicare patients by a hospital or another entity. But nearly a quarter of physician respondents said they have restricted or plan to restrict the number or type of Medicare patients they see.

Another big payment cut next year could result in many doctors refusing to sign agreements preventing them from charging patients more than the Medicare allowed rate, the AMA survey showed. Two out of every five physician respondents said they would take this step. Under the latest estimates, Medicare payments would be cut an additional 4.4% next year.

The AMA survey also found that practices were taking a variety of steps to deal with the payment shortfall. More than half had deferred purchases of equipment, and a third have stopped providing certain services because of the cuts.

Also, 27% have begun or plan to refer complex cases to other physicians or settings, and 29% plan to lay off staff or have already done so.