Cuts to Medicare Payments Would Greatly Restrict Patient Access to Physicians

Caroline Helwick

October 27, 2010

October 27, 2010 (New Orleans, Louisiana) — More than 67% of medical practices are likely to limit the number of new Medicare patients they accept, and half would refuse them altogether unless Congress halts the upcoming Medicare reimbursement cuts, according to a survey conducted by the Medical Group Management Association (MGMA) and presented here at the MGMA 2010 Annual Conference.

The action would stem from Congress's repeated failure to address the flawed sustainable growth rate formula. A 23.6% cut could occur on December 1, followed by an another 6.5% reduction January 1 to the Medicare Part B conversion factor.

On June 2, when a payment cut was expected (but delayed), 29.5% of practices began reducing appointments for new Medicare patients, the study found.

"In November, Congress will again be taking up the issue of Medicare reimbursement cuts totaling 30.1%. This would be very painful for medical practices that are trying to determine their budgets for 2011, not knowing if their revenue rates will be down by 30%. That is challenging to say the least," said William F. Jessee, MD, president and CEO of the MGMA, who presented the results at a press briefing.

Without Congressional action to halt the payment reductions, medical practices would alter their day-to-day operations and make other changes that would affect patient access to care, survey respondents indicated.

"Uncertainty about the future is creating an unsustainable environment for many who practice in areas with large Medicare populations. Congress must take action to block these pending cuts and provide an update that lasts at least through the end of 2011," Dr. Jessee said.

Most important, he added, a long-term solution must be found to ensure that beneficiaries have continued access to quality care.

63,000 Physicians Weighed In

The findings were based on responses to the survey from 2,860 medical practices involving 63,000 physicians, conducted in August 2010. The research was designed to determine how practices responded to anticipated cuts in June 2010 (averted by Congressional action) and how they anticipate responding to pending reductions at the end of this year. The authors hypothesized that reaction to anticipated cuts last June will indicate how practices will respond to upcoming Congressional action.

Among the practices responding to the survey, 92% are currently accepting new Medicare patients and established patients aging into Medicare, 6.5% accept only established patients, and 1.1% do not accept Medicare patients (acceptance was unknown in 0.4% of responses).

Respondents indicated that in reaction to the June 2010 Congressional delay:

  • 37.3% delayed purchasing electronic health record systems

  • 31.7% cut the number of administrative staff

  • 29.5% cut the number of appointments for new Medicare patients

  • 27.5% cut the number of clinical staff.

In response to the question, "Which business considerations are currently under discussion by your practice due to the Medicare reimbursement uncertainty?":

  • 67.2% would limit the number of new Medicare patients

  • 49.5% would refuse to accept new Medicare patients

  • 27.5% would cease treating all Medicare patients

  • 56.3% would reduce the number of appointments for current Medicare patients.

In addition, practices indicated that they might make the following changes in their operations:

  • 60.5% would reduce the number of administrative support staff

  • 54.0% would reduce the number of clinical staff

  • 71.6% would delay increases in physician salaries and/or benefits

  • 79.1% would delay the purchase of electronic health record systems

  • 45.3% would delay the purchase of electronic prescribing technologies

  • 76.6% would delay the purchase of new clinical equipment and/or facilities.

"Our read on this one is that Congress has played kick the can with [the sustainable growth rate formula] for quite some time, but the environment is very, very different this time around," Dr. Jessee said. "It's a lame duck Congress; the action is timed to occur when Medicare sends out its annual letter asking physicians to declare their participation status for the coming year, and the [fiscal] hole is deeper than ever and there is growing concern over the national debt. Acting on something that will add $330 billion to the debt is not likely to be popular."

Additionally, Dr. Jessee predicted that although the cuts pertain to Medicare only, it is only a matter of time before private insurers follow suit. "They will probably look for opportunities to make 'adjustments' in their reimbursement rates, too, and these payments will go south as well," he said.

Pat Smith, senior vice president of government affairs for the MGMA, said he believes the findings are reliable because they mirror responses observed in a similar survey conducted in 2007, when a pending 9.9% cut was blocked. "People start taking hard-core measures," he noted. "Practices are at the end of their ropes now."

Dave Gans, vice president for innovation and research for the MGMA, pointed out that "anticipating the possibility of a 30% reduction in payments when practice expenses are going up would be catastrophic to practices."

The situation becomes even more alarming, he added, in light of the shortage of physicians and, thus, the limited access to care in many areas of the country. "In Massachusetts, for example, over half the primary care practices are closed to all new patients, not just Medicare patients," he said.

"The uncertainty of the Medicare payment cuts is a reality, and that reality will be reflected in which patients a practice will choose to have as its base. They may continue to see Medicare patients, but — if they are closing the practice to new patients — for how long?"

Medical Group Management Association (MGMA) 2010 Annual Conference. Presented October 25, 2010.


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