September 7, 2010 | Comments Off on Physician Payment Rates
Posted by Frank Ciesla
Congress has restored the 21% pay cut in Medicare physician payment rates that recently occurred, but only on a temporary basis.
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Earlier this year, the Medicare program initially withheld payments to physicians for services provided, then halted payments temporarily to all physicians, when Congress failed to enact legislation that would postpone or eliminate the reduction in Medicare payment rates to physicians. Of course, physicians still had to pay the bills and compensate their employees, even without this cash flow. Obviously, a permanent resolution of this issue is critical. If the 21% reduction in Medicare payments to physicians is not permanently resolved, it will have a significant adverse impact upon physician compensation, and may also adversely impact the ability of physicians to continue to even maintain their offices. If this scenario occurs, the physicians will have no alternative but to determine whether or not they can continue to provide services to the Medicare population.
While Congress has implemented a temporary fix for the reduction in Medicare reimbursement, the current solution only delays the cut until the end of November. The current legislative fix will expire after the upcoming elections, and will require further action by a lame duck Congress.
While the voting power of physicians would not necessarily influence the outcome of a Congressional vote on the issue, the voting power of the Medicare population clearly would be powerful.
The cost associated with addressing this 21% pay cut is obviously enormous. It appears that the 21% pay cut may not have been addressed in the initial health reform bill out of a concern that the inclusion of the costs associated with the correction or modification of the 21% pay cut may have the unwanted effect of significantly increasing the federal deficit.
As each day goes by it is clear that the non-inclusion of the physician fee cut was not only essential to justify the passage of the healthcare reform legislation, but has no agreed upon resolution. If the doctors have learned one lesson out of this fiasco, it is the fact that they cannot permit our elected officials, to the extent that they have the power, and must verbally object to, those slight of hand tricks engaged in to justify the passage of healthcare reform and the continuing delays in resolving this issue at the expense of the physicians.
To separate the resolution of the pay cut issue from the healthcare reform bill does not magically make the negative impact upon the federal deficit disappear. In light of the various legislative maneuvers that had been occurring it is painfully clear that the negative impact on the deficit is significant, which appears to be the reason why a more permanent resolution is not being considered. The present solution went from a 3 ½ year resolution, clearly a short term proposal, to a six month solution, a political band aid.
As noted by Dr. Rohack in the American Medical News of June 7, 2010, “Congress could have permanently solved the problem five years ago at an estimated 10-year cost of $49 billion. The price tag now, according to a recent score from the Congressional Budget Office, would be $276 billion over 10 years. If not fixed, the AMA warns, the cost of a full overhaul would top the $500 billion mark within the next five years.”
However, if a permanent fix to the pay cut issue is not developed, physicians may determine from an economic standpoint that they will be unable to continue to provide care to the Medicare population. In New Jersey, few physicians currently provide care in their private office to the Medicaid population. That lack of access may expand to the Medicare population.
One of the goals of healthcare reform legislation is to rectify the negative impact of physicians electing not to become primary care practitioners. Historically, a major reason for medical students failing to pursue a career path as primary care physicians is the lack of reimbursement that such practitioners receive both from governmental payors and commercial payors. In many instances, the commercial payors follow the lead of the governmental payors with respect to the level of payments for certain physician specialties. It can only be reasonably concluded that the problem with the lack of primary care physicians is a problem caused by the government in its election of payments for the services provided. So out of one side of its mouth the government is talking about the need for primary care doctors, while on the other hand, its actions belie its ability and willingness to pay for those services. The shortage of physicians in primary care specialties will not be addressed unless primary care physicians obtain sufficient reimbursement to maintain a viable practice. If Medicare payments continue to be reduced, the difficulty of developing and recruiting physicians in the primary care specialty areas is likely to continue.