Letters to the Editor

Cuts in Medicare Physician Reimbursement Threatens Patients' Access

The Medicare program has enjoyed overwhelming support by beneficiaries since its beginning, largely due to the fact that they can choose to receive care from just about any physician. To make Medicare attractive to physicians, the program historically has guaranteed that payments for services are at least adequate to cover the costs of providing the medical care. This resulted in almost universal participation of physicians in the Medicare program and unparalleled choices for patients.

Unfortunately, Medicare slashed payments to physicians by 5.4 percent this year, the fourth such cut in ten years. Unless Congress steps in and changes the way that Medicare calculates future payments, Medicare payments will be cut by as much as 17% over the next three years. After inflation, Medicare payments will fall as much as 25 percent below the rising costs of delivering care to beneficiaries.

As a result, the almost four million Californians who depend on Medicare may soon find that the wide availability and choice of physicians has become a thing of the past.

I see a large number of Medicare patients in my practice and I am dedicated to their care. Dedication alone, however, cannot suspend the laws of economics.

A medical practice is essentially a small business. Like any business, my practice must receive more money than it pays in expenses, or else face bankruptcy. The payments that Medicare makes to physicians cover a broad range of practice expenses, everything from office staff salaries to energy costs to professional liability insurance. Costs for almost all of these expenses, especially California energy costs, are rapidly rising.

If total Medicare reimbursement falls by as much as 25% over the next four years, doctors will be forced to implement practice changes detrimental to the best interests of patients. These changes include actions such as laying off nurses or office staff. We might not be able to replace out-of-date medical equipment with more modern, accurate, and patient-friendly technology. It could force us not to accept any new Medicare patients. Some physicians may even close their practices or move to communities free of large number of Medicare patients.

The access problem will grow worse as rapid growth in the number of beneficiaries chases a smaller pool of doctors able to treat them. In 1990, 34 million Americans depended on Medicare. By 2010 that number will grow to 40 million and by 2030 to 68 million. To deal with this enormous increase, Medicare must ensure a sufficient number of practicing physicians are available, especially in specialties such as internal medicine and geriatrics that concentrate on the care of the elderly. This will not happen if Medicare is viewed as an undependable payer, and if physicians who specialize in care of aging patients are financially penalized by inadequate payments.

Several immediate steps need to be taken. First, Congress should halt the 5.4 cut. Second, Congress should adopt the recommendation of a blue-ribbon congressionally appointed commission to replace the current faulty formula for determining annual payment updates. The proposed formula allows for predictable increases based on how much practice expenses increase each year. The commission has said that such a change is necessary to achieve the goal of "achieving consistent payment polices" for physicians and their practices.

Some may argue that the nation cannot afford to institute a more fair, accurate, and predictable method of updating payments to physicians. The price of doing nothing, however, will paid by Medicare beneficiaries as they encounter increasing difficulties in finding a physician of their choice. Or, as they are subject to a reduction in services as physicians are forced to trim expenses.

Dr. Melvyn L. Sterling, FACP
California Representative
Board of Governors
American College of Physicians- American Society of Internal Medicine

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