Medicare woes could grow without Congressional action

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BY MARK ANDERSEN / Lincoln Journal Star

People with supplementary Medicare could find it more difficult to see a doctor if Congress doesn’t act to avert a physician pay cut in the coming weeks.

Doctors say millions of those enrolled in the federal health program for elderly and disabled people already may have hit the first barriers raised by a series of slim Medicare pay hikes to doctors in recent years.

Physicians say the congressional fight over Medicare Part B, which pays doctors, amounts to a choice of continuing to boil the frog 1 degree at a time, or plunge it into scalding water.

With the first option, Congress averts a 10.6 percent cut, but physician reimbursement falls farther behind medical inflation.

With the second, it’s the pay cut on top of  medical inflation.

In this political year, health care insiders expect Congress will work out yet another last-minute compromise to halt the 10.6 percent Medicare cut that otherwise kicks in  automatically on July 1.

A Lincoln family physician calls that pay cut a tipping point.

“Where you simply say the issue is, ‘Hey, if my overhead is now higher than what I’m being reimbursed, then I can’t continue to do that,’” Dale Michels said.

Since 2003, Congress has staved off all automated cuts to Part B, but each time without altering the underlying Sustainable Growth Rate formula — thereby setting a new deadline with even bigger automatic cuts due in six or 18 months.

Pay cuts to physicians totaling 40 percent are scheduled to kick in automatically over the next seven years. Health care inflation, meanwhile, hovers around 6 percent in the opposite direction.

Few believe those cuts will happen, said Les Spry, a Lincoln kidney doctor.

“The statute in the law doesn’t hold any reality for the present,” he said.

But it’s not so simple as Congress waving a bill, saying: Let there be Medicare Part B funds.

Under provisions Congress enacted in the 1990s, lawmakers can’t repeal the Sustainable Growth Rate without determining how to finance the estimated $70 billion to $400 billion in extra pay to doctors over the next decade.

The only options involve cuts to other programs, tax increases or higher Part B premiums.

The plan that stalled in the Senate illustrates the elusiveness of a solution. It would have transferred $20 billion to Part B from Medicare Advantage — private insurance that replaces Medicare. It failed because President George W. Bush threatened to veto any measure cutting Medicare Advantage.

The Part B fight fits into the even larger crises over reshaping Medicare Part A, which pays hospitals. The $370 billion Part A trust fund is headed toward insolvency by 2019, causing U.S. Treasury Secretary Henry Paulson to warn in February that the country faces a fiscal train wreck with the leading edge of the baby boomer generation hitting retirement age in 2010.

The latest proposal to stall in the Senate would have delayed physician pay cuts another 18 months, instead giving doctors a 1 percent raise. Presumably, lawmakers are now haggling over a revised deal that, like in recent years, will increase Medicare doctor pay by a half or full percent.

Physicians warn that after years of stagnant reimbursement rates, Part B Medicare has begun edging closer to the undesirable class of Medicaid — the often-hard-to-find service provided for the poor.

Medicaid patients sometimes search hard for a physician willing to accept pay that can be less than the cost of care.

Doctors in different specialties feel the anemic Part B pay hikes differently. Medicare tends to pay better for procedures, said Spry, who as a kidney doctor makes up for losses from office visits through dialysis.

An internist, on the other hand, is in trouble if half of his or her patients have Part B, Spry said. For family doctors, he said, anything above 30 percent spells trouble.

“When you talk to (doctors), they all know what percentage of their practice is Medicare,” he said.

Spry said a private insurer pays about $100 for an office visit, Medicare Part B pays about $60 and Medicaid pays about $40.

Michels, a family doctor, estimated his overhead costs per patient — malpractice insurance, rent, staff — equal or fall below reimbursement from Part B.

Medicare patients, because they’re older, often have complex health problems, requiring longer office visits, Michels said. It’s hard to make up in volume what’s lost in rates.

He foresees a time when physicians say “enough.”

“In the past,” he said, “especially for those of us in primary care or family medicine, we really liked caring for people. We tried our best to care for those people. The problem comes … it’s just no longer economically possible that we can continue to do that.”

Doctors in Omaha already have begun limiting patients to one or two problems, Spry said. If they have more problems, they must make another appointment, which means another bill.

Michels predicts that if the July 1 deadline for the 10.6 percent cut arrives without a solution, Congress will pay physicians retroactively.

In the meantime, he said, some offices are making plans to continue seeing existing Part B patients but not accept new ones.

“Come July 1,” Michels said, “More and more people may not be able to find a physician.”

Reach Mark Andersen at 473-7238 or mandersen@journalstar.com.