Medicare insurers not paying, doctors complain to AMA

The House of Delegates also dealt with Medicare issues from payment cuts to balance billing.

By Joel B. Finkelstein, amednews staff. July 7, 2003.

Chicago -- It's hard to make much money off Medicare, but physicians say health insurance companies have figured out one way: Stiff patients and their doctors.

The problem is with secondary insurers, AMA delegates said at last month's Annual Meeting. Beneficiaries pay into these plans on top of paying their regular Medicare cost sharing. The trouble is, they aren't getting any benefit from the extra spending, physicians said.

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Some of these insurers are telling physicians that because Medicare reimburses what the plan would normally pay for a service, they do not have to pay anything for that care.

The physicians argue, however, that patients are paying the plans a premium and should get some benefits for their money. They passed a resolution calling for the AMA to push for legislation requiring secondary insurers to reimburse toward patients' deductibles or co-pays as much as the insurer would have paid for any other plan member. The resolution specifies that the problem is not related to medigap plans.

The companies are "getting a terrific windfall by not providing insurance," said John A. Ostuni, MD, an internist from Freeport, N.Y.

Frederick L. Merian, MD, a family physician from Victoria, Texas, described it as Insurance 101: Collect insurance premiums and don't pay out anything.

Doctors in Michigan are seeing a similar problem with one of their insurers, said Alan M. Mindlin, MD, an ophthalmologist from Pontiac. He said he hoped the loophole was closed before other insurers decided to adopt the strategy.

Currently, plans make coverage policies on an individual basis, according to a spokeswoman from the BlueCross BlueShield Assn.

"The coverage would vary greatly depending on the group that was being covered and the specific plan that group has an arrangement with," she said. "There is no one-size-fits-all ... statement or guideline."

Another strategy the companies have devised for denying payment is to tell patients that they did not get plan authorization for a service, although Medicare already authorized it, doctors said.

Dennis L. Galinsky, MD, a delegate from the American College of Radiation Oncology, said this is a big problem, especially for specialties reliant on new technology.

Insurers argue that high-tech services, such as focused radiation, are experimental, even when they are not, he said.

When insurers deny reimbursement, patients are not always able to pay for their care, leaving doctors holding the bag. This is particularly a problem when a Medicaid managed care plan is the secondary insurer, physicians said.

The Medicare fix and more

Medicare can stimulate many complaints from physicians, but near the top of the list in any given year is falling reimbursement due to the flawed formula created by the Balanced Budget Act of 1997.

Heavy physician lobbying of Congress has led to temporary fixes for the present. In a resolution adopted by the House of Delegates, physicians reiterated the need to continue seeking a permanent solution to the problem.

"I think it's interesting that in a democracy we are lobbying our senators and representatives on this issue, and these are people who have voted themselves and enjoy automatic cost-of-living increases," said Gregor K. Emmert, MD, chair of the Ohio Organized Medical Staff Section.

Physicians are being forced out of practice by what amounts to national price controls, said Bohn Allen, MD, a general surgeon from Arlington, Texas. Private insurers use Medicare rates as a guide for setting their own reimbursement.

A ban on balance billing is also a hardship for physicians serving Medicare patients, physicians said. The reduced revenue from providing services to these patients is forcing practices to ration care.

"We have many Medicare beneficiaries who say, 'Doc, let me pay you,' " Dr. Allen said. "Well, you can't pay me. Only in the United States of America, the land of free enterprise, can you not pay to get health care."

Delegates voted to ask the AMA to advocate for physicians' ability to bill Medicare beneficiaries the full amount for a service, with the patient responsible for the difference between Medicare payment and physician charges.

But several physicians voiced concern that pushing for balance billing could fuel a perception that doctors are trying to line their pockets. Others noted that balanced billing would not be any help because their Medicare patients don't have enough money for their deductibles and copays, much less added costs.

The doctors acknowledged that politicians are unlikely to support a Medicare change that would add to seniors' out-of-pocket costs.

Meanwhile, legislation to establish a Medicare prescription drug benefit has taken off, giving physicians little time to react to the current proposals.

Physicians attending the meeting agreed that the benefit should be tied to beneficiary income, it should be fully funded by additional budgetary allocations and it should be offered to patients both in the traditional fee-for-service program and Medicare managed care plans.

Other issues considered

In other matters, delegates asked the AMA to:

Work to reduce the burden of a proposed federal rule that would require physicians to register their Medicare participation every three years.
Look at the Federal Employees Health Benefit Program as a model for Medicare reform.
Assess the need for policy changes to allow physicians who provide care to residents of skilled nursing facilities to bill Medicare directly for the technical component of services provided in their offices.