Medicare's economic, noneconomic impact

Ethics Forum. Sept. 4, 2006.

Scenario: When can a practice discontinue accepting new Medicare patients?

The question of when is it economically prudent and ethically defensible for a physician practice to stop accepting new Medicare patients becomes critical as policy-makers and regulators intent on ensuring health care access for Medicare beneficiaries face reductions in payments to physicians.

Reply:

Every year since 2001, organized medicine has reacted to projected payment reductions with the claim that reduced payment would jeopardize access to services because a significant percentage of physicians would stop accepting new Medicare patients. These predictions have been based on physician surveys. Payment reductions are once again embedded in the final regulation announcement for physician payment in 2007. If they are actually implemented, physicians will confront a real choice, not the hypothetical one posed in surveys.

The decision whether to accept new Medicare patients is a function of economic and noneconomic factors. Economic factors include the physician's personal and practice income expectations; the number of active patients in the practice; current differences between Medicare and other payer rates; the opportunity to fill the practice with higher-paying patients; and the size of payment reductions and whether reductions are anticipated for future years. Dramatic payment reduction is more likely to cause refusal to accept new patients.