Sunday, February 9, 2003

Medicare trims cutting docs' options

Services will suffer, they say

By Tim Bonfield
The Cincinnati Enquirer

Medicare rate cuts imposed last year cost Wellington Orthopaedic & Sports Medicine about $130,000. If proposed cuts for 2003 actually occur, they would cost another $150,000.

Cranley Surgical Associates, a group of vascular surgeons, already is down to two medical offices after closing seven offices since 2000.

"We're as lean as we can be," says Cranley's executive director Karen Palatchi. "Any new cuts in Medicare would be a big concern for our group because, as a vascular surgery practice, Medicare patients comprise over 50 percent of our patients."

Even though President Bush called in his State of the Union Address for putting more money into the Medicare system to pay for a prescription drug benefit, the rates doctors and hospitals will be paid through the federal health plan for the elderly remain uncertain.

That uncertainty has doctor groups nationwide warning Congress that tough cutbacks loom if Medicare rates continue to dwindle.

A survey of more than 230 physician groups by the Medical Group Management Association reports that more than half of physician groups are reacting to Medicare fee cuts by limiting how many Medicare patients they serve. More than 60 percent also have made or plan to make cuts in physician pay, postpone investment in new technology and limit expansion plans.

"Congress and the president must work with providers to find a permanent fix to the flawed payment formula and include it in Medicare reform legislation this year," says Dr. William Jesse, president and chief executive of MGMA.

"For us in Cincinnati, this is just a continuation of the saga we've been living with the past couple of years," says Don Jansen, Wellington's chief operating officer.

While doctors here remain reluctant to say they will directly ration appointments for Medicare patients, they warn that any further erosion of Medicare pay could lead to other undesirable changes.

Patients who need surgery for nonemergency problems may face longer waits. Doctor offices that cut support staff or close offices may become less convenient and less responsive to patients. And perhaps most importantly, weak payment rates will make it that much harder to recruit and retain top-shelf experts in many specialties, from orthopedics to cardiology.

If the current climate continues, doctors who see significant numbers of charity cases may even start fighting for a share of local tax levy support that currently supports only hospital expenses for indigent care only at University Hospital and Cincinnati Children's Hospital Medical Center.

"You've already seen TriHealth start fighting for some of the tax levy money. Physicians may have to do the same thing," Jansen said.

The Medicare system cut pay rates to doctors by about 5 percent in 2002 - the amounts vary by specialty. In December, the Centers for Medicare & Medicaid Services (CMS) announced plans to make another 4.4 percent cut for 2003, effective March 1.

Since then, the House has approved pushing the rate cut back to September. But the Senate has not acted, so the fate of the 2003 cuts remains uncertain.

"CMS recognizes that this will be the second year in a row in which physician fees will be affected by a negative update for the conversion factor," said CMS Administrator Tom Scully in a statement. "The reduction in physician fee schedule rates results from a formula specified in the Medicare law, and we believe that formula is flawed and must be fixed. CMS has done everything it can to shore up physician payments for 2003, but only Congress has the authority to fix the formula."

For Cincinnati doctors, the Medicare concerns come on top of complaints that private insurers pay unusually low rates, that rising medical malpractice insurance rates have become a serious burden, and that even more cuts may come on the Medicaid front as lawmakers cope with Ohio's budget crisis.

At Cranley Surgical, the group does not see denying access to Medicare patients as a realistic option.

"We can't tell a person with a cold foot to wait 30 to 60 days for an appointment. That could result in the person needing an amputation," Palatchi said.

Yet the weak financial picture has impeded the group's ability to hire new doctors to replace retiring ones. As a result, the group's physicians are working 70 to 100 hours a week to keep up with patient demands.

"That's not sustainable," Palatchi said.


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