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Physician payment crunch: Medicare cuts hit Medicaid access

Many physician practices can't absorb losses from Medicaid any longer.

By Markian Hawryluk, amednews staff. Oct. 21, 2002.

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Washington -- Even as evidence of a physician access problem in Medicare begins to mount, many doctors and health care analysts are worried that Medicare payment cuts may lead practices to close their doors to many Medicaid patients as well.

The latest physician access study, released by the Medicare Payment Advisory Commission, found a seven percentage-point drop in the number of doctors taking all new Medicare patients from 1999 to 2002. But it also shows that the proportion of practices open to all new Medicaid patients dropped during the same period from 48% to 37%.

Many believe the two are linked.

"I don't know of any physicians that get to the point that they're restricting Medicare in their practice that they haven't either restricted or totally eliminated Medicaid out of their practice," said MedPAC Commissioner Ray Stowers, DO. "In a lot of practices, even though the [Medicare] reimbursement isn't that good, it still helps carry part of the Medicaid expenses in your practice."

With Medicare rates lagging behind the cost of treating a patient, Dr. Stowers fears, practices will no longer be able to absorb the losses they incur when they treat Medicaid patients.

Maureen Callaghan, MD, a neurologist from Olympia, Wash., said the access problem is evident in Thurston County. A survey in the county found that 77% of primary care practices have closed their doors to new Medicare patients, and 76% will no longer see new Medicaid patients. "In Washington, we're at the bottom of the [reimbursement] barrel on both," Dr. Callaghan said. "It's getting pretty grim here." [...]