Doctors may be forced to accept Medicare rates to stay licensed

Massachusetts has a problem.

In April 2007, they became the first state to require residents to have health insurance. Reportedly this has resulted in 300,000 newly insured patients and lowered the uninsured population to 5%. But of course, given the relatively poor reimbursement rates for primary care providers, especially when it comes to government insurance, the state is facing a growing shortage of primary care providers.

Without an adequate supply of primary care physicians, however, the plan cannot guarantee timely access to care, creating a gap between coverage and actual provision of services. As a result, waiting times to see a primary care physician can amount to weeks and even months in some instances.

It’s ironic since the health care reform bill in Massachusetts was supposed to stress the importance of preventative care but because of the relative shortage of doctors to deliver preventative care, many patients are seeking primary care from specialists. Unfortunately, specialists also specialize in expensive care. Thus, health reform in Massachusetts has resulted in decreased access to primary care and higher costs.

This is what happens when you call an expansion of government health care spending, health care “reform” instead of legislation that actually reforms a broken system. This may be a bad harbinger of what is to come for the rest of the nation.

What can Massachusetts do to actually reform their primary care system? Well, they can improve primary care reimbursement or revamp the reimbursement system to reward overall care and good outcomes rather then only rewarding physicians for visits (quantity over quality) or medical school debt repayment. But why pay doctors more for better care when you can just force them to accept lower reimbursement rates (as low as 110% of Medicare rates) “as a condition of their licensure” that would effectively make these physicians employees of the state?

[Senate bill 2170 and house bill 4452] would require physicians and all other health care providers to accept 110% of Medicare rates for health insurance for small businesses. For physicians, acceptance of set rates would be as a condition of licensure! Moreover, physicians would have to accept all such patients – and such rates – if they participate in any other plan offered by that insurer.

The stated purpose of such a misguided bill is to try to decrease health care costs for small businesses but all it does is show how little the sponsors of these bills understand medical economics. These bills make no distinction between primary care providers who are in the best position to decrease costs and specialists who tend to increase costs. Both are penalized equally. Nor do these bills require private insurers to pass on savings to employers. The end result is likely to be a net loss of physicians to nearby states and many who join the increasing ranks of physicians who have cash only practices.

Even from a practical standpoint, these bills are confusing. What does “as a condition of their licensure” mean? Does this apply only to new applicants or to re-applicants? Are physicians who refuse to accept lower rates going to be stripped of their licenses? What about physicians who are employees of private health clinics who do not have control over the rates that are accepted? Will they be forced to quit or risk losing their licenses? Aren’t people in the Northeast supposed to be generally smarter or does that not apply to their state legislators? Is this the beginning of the nationalization of health care in this country? Is this a good time to get out of the profession of medical care?

Chris Rangel is an internal medicine physician who blogs at

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  • Rob

    This is the nuclear option – i.e. Mutually Assured Destruction. The specter of being forced to accept Medicare rates terrifies docs, and it should. The repercussions for Mass if the do this is obvious: docs will leave the state.

    I do wonder about the constitutional repercussions of a law that forces us to work for low rates.


  • ZMD

    The solution is very simple. You can accept the state insurance but that doesn’t mean you have to clear your schedule for them. Take a page from the airlines’ frequent flyer programs. Ever try to redeem your miles? There are only a limited number of seats on each plane for these cheapskates. The same principle can apply to patient scheduling. State insurance? Sure we take it. Our next opening will be in two months.

    • MatthewBowdish

      That would be a simple solution except, of course, it’s also illegal. Physicians who take Medicare/Medicaid have to offer the exact same services and accessibility as non-Medicare/Medicaid patients receiving. Many physician friends I know already do this, but they are risking federal charges if anyone finds out about such practices.

      • David Allen, MD

        See my full comment later in the comment section, but just be it known that you cannot force the mind to think. Again, nothing prevents me from seeing a patient, doing a physical, writing a note, and even billing, with the conclusion: “this complicated Medicare patient presents with symptoms and/or signs which simply baffle this lowly serf of the state.”

  • Anonymous

    Ha!, I’d like to see the same restrictions placed on lawyers. Why are physicians the only professional which the public seems to believe does not deserve the right of autonomy.

  • Doc99

    Many of the same states’ challenging the Insurance Mandate will welcome those fugitive docs from other states with open arms. Unless the federal government wishes to override the tenth amendment, this issue will be a nonstarter.

  • Ed

    “For every problem there is a solution which is simple, clean and wrong.” HL Mencken

  • McLerranMD

    When healthcare as an education system sees no value in education physicians to do primary care, of course there are going to be major shortages in treating patients in years to come. In some parts of America, however, patients are already dealing with these shortages and any chance that physicians will not see Medicare patients due to government legal wrangling will leave the elderly and disabled of the inner city and rural America facing critical shortages in care, and how can we in medicine let these laws be passed. I have no stomach to tell my patients to wait 2 months whatever type of insurance they have.

  • Brad

    Price controls cause scarcity.

  • KP Internist

    Although the bill misses it’s mark, it is targeting the right thing. There is a problem with “cherry picking” out there. Doctors who have the good fortune of sound finances are opting out of taking care of these patients. This makes great sense to the individual doctor, but really just pushes the problem down the street and onto the doorstep of a more financially taxed and perhaps a more stressed provider or worse the ER staff.

  • Doc99

    If the docs are forced to accept a pay scale, then perhaps the door opens for the German solution.

  • SarahW

    How about “no.” I’d move before becoming a slave.

  • Martin Young

    The beginning of the end….. plain and simple!!

  • Vox Rusticus

    Goodbye Free Market! Hello Black Market!

  • Steffan Lozinak

    I honestly am completely OK with the state being controlling wages and prices. This might get rid of the doctors that are working just to make money in the first place. Most doctors live far better lives than the majority of people in this country and will continue to even if they are “forced to accept Medicare wages”. Seriously, what about the people who are on Medicare in the first place? Let’s compare their lifestyle to that of these doctors. I am sick of doctors complaining about not making enough money, seriously.

    Arrogant and money hungry should not be the way of the people treating the sick and injured.

    I do however agree that our country is far from being fixed, however the fact that things are at least attempting to be done is a step in the right direction.

    • brad

      communist. OK then, maybe docs should be hired right out of high school? As it is right now, the master plan of the feds is to control all physicians through controlling their student loans, directives into a particular type and area of practice, and reimbursement. Would you give 13 years of your life in study and 100hr. work weeks in training to have the government control every aspect of your profession? Good luck finding suckers to do that. We will be flooded with ‘suckers’ from oversees to do just that.

  • stargirl65

    After going to school for 25 years of my life and racking up huge educational loans I expect to paid well. Being on call and assuming the huge risk of being responsible for someone’s life should be well compensated. That being said, I am the lowliest paid of all physicians – primary care. My take home pay has not increased in 15 years. I take only 2 weeks vacation and get no retirement, health insurance coverage or other fancy benefits.

    I think if the insurance industry was out of all of this then payments and prices would be more reasonable. Patients are insulated from the prices of medicine. Doctor are tired of wrangling with insurance companies to get paid. They have to hire an army of employees just to file the papers to get paid. If we got rid of insurance then we could decrease the overhead of care significantly. Many physicians would have to learn how to practice more efficiently if patients had to pay, but it would eventually work its way out.

    If Massachusetts wants to increase the number of primary care doctors then simply offer an amazing pay schedule and they will come.

  • paul

    what would stop docs from “accepting” medicare/caid and never actually seeing medicare/caid patients?

  • Jenga

    Nothing at all Paul, except while on call. The constitutional issues will make this null and void. It does not occur with any parallel in any other field. The government can’t make a contractor build low income homes as a condition of him obtaining a building permit elsewhere. It can’t force an attorney to be a public defender as a condition of licensure. It can’t make an accountant do taxes for the poor as a condition of licensure. When Missouri passes their referendum that states no provider will be forced to take any private or public insurance plan more like minded states will follow and Mass will have no physicians and like it until it gets ruled unconstitutional.

  • jsmith

    Legal/constitutional issues aside, it would be tough for MA to make this stick if other states or the whole country don’t follow suit. Docs could just leave, worsening an already bad PC shortage and making the ERs more crowded and costing the state more money. Maybe even a quick spinning physician-supply death spiral could result. It’s really hard to know what the guys who came up with this are thinking. That docs so love MA they would never leave? Puzzling.

  • Vox Rusticus

    Will they do the same to dentists, physical therapists, equipment dealers, psychologists and nurse anesthetists?

    Or will only doctors be singled out for price controls on the pain of withholding a professional license?

  • TrenchDoc

    I think the bill is a wonderful idea! In fact we should use 110 percent of Medicare as a basis for valuing everything in our society. Just use the RVUs (relative value units) concept and calculate the value of everything we consume. That is a fair way and it would apply to all of us, atheletes, lawyers,business owners ” Each according to his efforts”. We all agree that harder work equals more pay. We just disagree on how to value the effort.

  • Doc D

    As the government increases its control over medical practice, physicians will have less opportunity to contribute to what constitutes good medical care.

    That’s the reason for the Herceptin scandals in Canada and New Zealand, and the drug-eluting stent scandal in Great Britain. In each of these the govt denied care on the basis of cost in the face of good evidence of benefit. Doctors had little influence over the decision.


    Nothing comes to consciesness without pain and nothing changes until you say, “no”.

    Be prepared to say, “no”.

  • docguy

    this already happened in Tennessee I believe when they tried this and caused major problems..

  • brad

    Price controls never work, whether artificially fixed high or low. And if you docs out there believe, for one second, that the feds won’t step in to control the licensing process, like they now control the student loan process for medical students, you are dead wrong.

  • David Allen

    This is a perfect moment to bring in Ayn Rand. She knew full well that you cannot force the mind. The intricate connections made within one’s mind cannot be legislated!

    As already pointed out by others, what is to prevent physicians from ‘agreeing’ to accept Medicare patients without actually scheduling any of them? What is to prevent them from canceling scheduled patients and forever rescheduling them? What is to prevent them from ‘seeing’ such patients, but providing them with no advice? I can see a patient, do a physical, write a note, and conclude “this complicated Medicare patient presents with symptoms and/or signs which simply baffle this lowly serf of the state.”

    Do people who see doctors under these circumstances honestly believe that they deserve the best, finest, most earnest, effort on the part of their doctor when they are treating said physician as a slave? It is simply idiocy to think that! Those who use Medicare, if legislation like this goes into effect, better learn to pay physicians in a different manner (concierge, retainer, or otherwise) if they want to get high quality care.

    • Susan

      David…your writings reflect much anger at the Medicare patients – they are not the ones proposing these changes – please redirect your anger to the appropriate persons or agencies – are you going to punish these patients? your comments are very disturbing from a patient perspective – maybe you are just writing this to prove your point and show your anger but a better way is the identify the real culprit.

      How many of you still are fortunate to have parents living? Would you want them to be treated as suggested by David? I know several physicians who are now in Medicare range and running into the same problem…ouch…..and it does not feel good. They are fortunate to have the means and network to pay out of pocket…for now.

      The solutions will be very difficult and painful.

      I thought physicians were suppose to render the same type of care (or at least make the same effort) regardless of ability to pay or payor ??

      • David Allen, MD


        After re-reading what I wrote, I can see how you would interpret it as angry – but it really wasn’t. Strident might better reflect the intended tone. I’m not really angry at these patients (only the one’s that do in fact view physicians as serfs). I’m just pointing out that a system that views physicians as automatons will, in fact, produce automatons. Just apply the logic to your own job and perhaps you will see the injustice of the approach. If you offer a service to someone, you should be able to choose your customers and come to an agreement regarding price.

        “I thought physicians were suppose to render the same type of care (or at least make the same effort) regardless of ability to pay or payor ??”

        Physicians are people, and so should have the same ethical standards applied to them as you apply to yourself. It should be up to the physician, not the state or anyone else, whether, how, and under what conditions they are willing to treat a patient.

        By the way, a law was just passed stating that you (Susan) must go down to the homeless shelter every weekday from 9am till 12 noon to change the bed linens. Please don’t be try to assert your own values and conditions on this service – it is mandatory. Please do not punish the homeless, or try to do a bad job of it. The homeless are not the ones who put you in this unfortunate position.

  • ninguem

    What *IS* the status of that bill in the Mass. Legislature?

    I’ve been hearing about this for months now.


    Last week I was told by folks at Mass Med Soc that it was not yet law. I am not certain as to what the status is at this time.

  • Susan

    accepting Medicare as a payment standard may not be as bad you think…….think about how many employees you hire just to deal with the commercial insurance – this increases your operating expenses….need to see more patients to pay these salaries – Medicare billing is pretty straight forward… least you could give a straight answer on what something costs when a patient asks……instead of “something somewhere between Medicare and 200%, 300% or higher”

    • David Allen, MD

      Its true. On the other hand, the other insurances won’t be sending you to jail if you miscode something (they call if fraud). And, I don’t know if you heard, but Medicare is bankrupting the country! So how long do you expect the gravy train to continue?

  • Bruce

    Although Medicare billing is straightforward, the recordkeeping requirements more than offset the savings on the frontend. This also applied to Medicaid. Audits can be extremely time consuming to support. And if the paperwork isn’t 100% correct, they will pull the $$$ back in a heartbeat. This is becoming more evident as states and the Medicare program seeks ways of controlling costs – they will question everything. This means additional paperwork, meaning more overhead to support reimbursement. In all of the discussions I have heard regarding reducing healthcare costs, the recordkeeping burden is one that I have not heard being addressed. I suspect the just passed heathcare bill will add more requirements.

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