The recently passed federal health care legislation will place more Florida seniors into the Medicare program, but it does nothing to fix the broken system that pays physicians to provide their care. And unless the payment formula is repaired, fewer doctors will accept Medicare recipients at all, and patients will have trouble getting access to the care they need — the exact opposite of the health bill's intent.
What is the Sustainable Growth Rate (SGR)?
The SGR is the formula used to establish how much physicians are paid for seeing Medicare patients. It is supposed to be updated every year to take into account rising health care costs, the ever-increasing number of Americans on the Medicare rolls and inflation. The federal government adjusts the SGR for changes in law and regulation. However, these adjustments simply do not reflect the increased services physicians provide, which are the products of technological innovation and Medicare benefit expansions (cancer screenings, diabetes management, etc.)
While Congress has been scheduled to cut the physician payment rate several times, it has repeatedly stepped in at the last minute to patch the system from month to month.
Florida has 3 million Medicare beneficiaries, more than any other state. Patients already have trouble finding a physician here: Currently, the state has only 15 practicing physicians per 1,000 Medicare beneficiaries.
How does the SGR affect patients?
Most Florida physicians are considering completely "opting out" of Medicare because they simply can't afford to pay more out of their own pocket than they are reimbursed for. This will result in Medicare patients experiencing major difficulties finding a physician to treat them and a tremendous increase in the wait to get an appointment with a physician. Seriously ill patients would be forced to seek care in emergency rooms.
Early this year, the rate-setting Center for Medicare and Medicaid Services (CMS) phased reductions into its practice expense calculation. That resulted in lower payment (10 to 11 percent) for many imaging specialists, such as cardiologists and interventional radiologists. For example, a doctor performing a left heart catheterization saw a drop in reimbursement from $248.86 in 2009 to $169.36 in 2010, on average.
With this change, CMS shifted payment away from specialty care toward primary care and prevention services. If the 21 percent payment cut occurs, primary care physicians will see a 12 percent drop in pay for office visits, but some specialty care doctors, such as radiation oncologists, could experience cuts of up to 40 percent for some services. Payment for a midlevel office visit would drop to $59, compared to $70 in 2009. Payment for an initial hospital care service would drop to $100, compared to $122 in 2009.
Many physicians simply cannot afford to keep their doors open if these cuts are implemented.
Broken system, looming crisis
From the mom-and-pop business down the street to a Fortune 500 company, most businesses can adjust their prices to keep up with rising costs. Physicians who treat Medicare patients can't do that, because they depend on the SGR to determine how — and even if —they will be paid. Even by Medicare's conservative measure, physicians' cost-of-care expenses have risen 22 percent since 2001. In contrast, Medicare payments to physicians have increased only about 1 percent in that time.
This patchwork method — avoiding reimbursement cuts from year to year, and most recently from month to month — is no way to run a budget. It is certainly no way to run the system that provides health care coverage to our nation's seniors. Worst of all, it sets the stage for an access-to-care crisis.
For many physicians, it is impossible to budget for even the short term, making it equally difficult to continue seeing Medicare patients. Business owners cannot plan for the future if they don't know what payment to expect for their goods and services.
What can we do?
The U.S. House passed a bill that would permanently repeal the SGR, eliminate pay cuts that have built up in the system, provide a 1.2 percent payment increase in 2010 and create two more generous targets for future years. Unfortunately, an attempt to pass a permanent SGR repeal failed in the Senate. For the past few months, Congress has instead enacted stopgap measures that temporarily suspend the cuts, but lawmakers must identify a long-term solution that ensures adequate payment for physicians and stability for the Medicare system. By repealing the SGR formula, Congress can avert these cuts.
As a Florida physician, I am concerned about what lies ahead. In the face of extreme payment cuts and a failing system, my colleagues in our state and across the nation may not be able to continue providing care for millions of Medicare patients.
President Barack Obama's promise that Americans can "keep their doctor" is in serious jeopardy.
Dr. James Dolan is president of the Florida Medical Association.