Will the new Congress allow the physician Medicare cuts to pass?

Well it’s that time of year again.

No, not Thanksgiving or Christmas, or even the venerable Interim Meeting of the AMA. It’s the time that physicians nationwide anticipate another mandatory cut in Medicare reimbursement rates.

This time the recurrent temporary fix will result in a cut of 23.6 percent on December 1st. Assuming political gridlock the rate will fall another fraction of 6.5 percent on January 1.

History dictates that there will be lobbying, bluffing, puffing and even some “take my toys and go to my room” childish attitude but in the end Congress will create another “fix”. In the past this has been to stabilize payment rates to a Victorian-era fee schedule (ok, 1997 or so) and set up an expiration schedule that again is measured in months.

But this year might be different. Or, at least it threatens to be.

American voters stampeded to the polls to vote out the status quo in favor of a new Republican House and a “lack of cloture” Democratically impotent Senate. Many of these new Republicans campaigned on the promise of fiscal responsibility (read: make the Bush tax cuts permanent and curb spending, including entitlement programs).

The Republicans have as a group pledged to cut $100 billion in January.

Now enter the AMA.

This association is again lobbying for a fix — though now it is not the “permanent fix” but rather a tempered 13-month patch to give physicians at least a year to worry until the next SGR induced armageddon.

But will this new Congress support the AMA proposal? I don’t think so.

Rumors abound to the cost of the AMA idea but it ranges between $17 billion to upwards of $20 billion. I’m certainly not an insider, but a new Republican congressman might find it challenging to explain to those tea party goers about why one of his first actions was to vote to support a double digit entitlement extension.

The other options are also mind stretching.

The lame duck Democratic controlled body could pass a 1 month extension and leave it up to the Republicans to spend the money in 2011. Or, they could use the pout strategy and just grind out the final month with the cut in place with Medicare physicians having to deal with a very arduous Christmas present.

So what will happen? It’s anybody’s guess but a likely outcome will be a compromise of sorts.

It would be fairly easy to disguise a three or four month fix as part of a January revenue bill to add some permanence to the Bush era tax cuts. This would of course create another type of March Madness, but it also would only cost a minuscule five or six billion. Chump change.

There is the issue of raising the debt ceiling that will have to survive a potential Senate filibuster by one of our new freshman Kentucky senators who will be calling for a balanced federal budget. This ophthalmologist turned tea drinker may not see eye to eye with adding more money to a spending bill — even if it would be good for patients.

But no one said it would be easy.

Dan McCoy is a dermatologist who blogs at

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  • family doc

    Allow balance billing. Then I can continue giving quality primary care to seniors and the government doesn’t have to borrow more money from China for this entitlement.

    Of course, the reformers are happy to have physicians forced out of independent practice and into employment in subsidized, easily controlled clinics. Likwise, the AARP won’t allow their members to pay the true cost of their care.

    Instead, we’ll get a prolonged fight which cuts off our business’ cash flow and many of us will either retire or have to fire our Medicare patients to survive..

  • family practitioner

    Good luck getting those entitled seniors to go along with balance billing.

    • Vox Rusticus

      Balance billing will be a forced choice if it ever comes to pass. We forget that before 1986, it was allowed. It can be allowed again.

      No matter what, shoving wholesale unsustainable cuts on a private practice will not work when the costs of service cannot be met. Medicare patients can be refused care and can in fact find it impossible to be accepted in a practice that has closed its enrollment of new Medicare patients. Some specialties may find themselves gravitating to cash-only terms as a widespread practice and the few who don’t will find themselves swamped with patients who don’t cover their costs. With rejection of Medicare come all sorts of other consequences. Gone is e-prescribing, gone is the “meaningful use” bullsh*t regarding imposing of crap EHRs that add expense but not value, and toothless goes HIPAA and its enforcement goon brigade.

      On terms of balance billing or nothing, we will again have balance billing.

      • family practitioner

        wishful thinking

  • http://drsynonymous.blogspot.com Dr Synonymous

    Mural Graphic Dyslexia consumes us. Just as we fail to see the handwriting on the wall, we may not notice that the wall is falling on us. Let’s get some better eyeglasses for our profession.
    Expect the cuts. Diversify our business model. Be prepared to quickly forgive those involved. Move ahead to the future we were wise enough to expect.
    Happy visioning!

  • gzuckier

    “the AARP won’t allow their members to pay the true cost of their care.”

    The majority of AARP members and/or Medicare patients and/or old folks in general absolutely cannot pay the true cost of their care, unless they started salting the cash away back when they got their first job and kept it up since. Since pretty much nobody does this, and since we don’t really want Granny to die from lack of MRI, we basically instituted the process of salting away the cash as Medicare. However since we then started using the salted away Medicare cash of the Baby Boomers to fund various expensive foreign wars, we are now in the same boat; so now the idea is to get everybody to salt away cash for their end of life medical needs by making them buy medical insurance, which has both the legal fiduciary responsibility to not squander such money and a history of being able to keep it safe, unlike the US population as individuals or as voters. Still too much deferred gratification for some folks, apparently.

    Medical insurance is not like car insurance; a lot of folks get through life without tens of thousands of dollars of automobile related expenses, so deciding to try your luck without coverage makes at least a little sense, so we make it illegal to discourage the few who get caught owing something they can’t pay. In contrast, pretty much nobody gets through life without actually running up tens of thousands of dollars of medical expenses (at least), so we naturally smile benignly at those who figure they’ll worry about it when it happens. The ACA is the moral equivalent of the Gulag because it authorizes that whopping $95 per year penalty for those who figure that there’s no sense in wasting their money buying medical insurance until they actually are scheduled for that triple bypass, in which case that $500 a month is pretty much a bargain.

  • http://www.BocaConciergeDoc.com Steven Reznick MD FACP

    I expect our dysfunctional legislative branch will remain dysfunctional regardless of which party( s) have the majority in that chamber. This means we will not the SGR cuts reversed. I further expect that Medicare may just stop accepting claims and paying them at the discounted level because the time and cost of restoring them and paying on the reduced claims if and when Congress comes up with an answer is excessive. The result will be a cash flow crunch for practices in Medicare rich areas .
    The fallout is already occurring. Last week I tried to find a patient with hypercalcemia due to hyperparathyroidism and endocrinologist and an experienced head and neck surgeon. I generally refer to physicians I would go to or send my loved ones to. I have already gone through the phone book, my medical society roster and have failed to come up with a practitioner who will accept Medicare payment for the service. Everyone wants to be paid up front and have the patient wait for reimbursement from Medicare and their secondary insurer. My patients are outraged. I have spent the last year educating them about this possibility through quarterly newsletters, blogs on my website, handouts when they visit the office and educational material around the office. The concept of a physician charging a fee and being paid for it is foreign to them. Most of my patients are not indigent or financially challenged.
    I expect the trend of doctors refusing to treat Medicare patients or demanding payment at the time of service for their services will increase if the cuts are not reversed.

    • Dr Im-Getting-Out-of-Here-While-I-Can

      The best thing I read in your thoughtful note is that the specialists are refusing to take Medicare. Why should they? Medicare pays lousy. Bravo to them.

      And your patients, who you report are not “financially challenged,” being “outraged” at having to pay out of pocket & wait to be reimbursed. How self-entitled is that?! I am impressed with how hard you looked for a specialist that took Medicare. I would have given 3 referrals & stopped. If the patient doesn’t want to utilize the referrals, that’s their problem.

      But this is what the public gets for treating docs so poorly. My only question, to myself as well as all my collegues: why do we continue to put up with this abuse? The more of us that cancel our Medicare contracts, the better.

  • Muddy Waters

    Wow! It never fails to amaze me how little value society today places on their healthcare. I guess it’s kinda like religion for some people…you don’t truly appreciate until you really need it. But wait – doctors are some of the MOST highly trained and brightest minds in the world, and yet we don’t even deserve to earn in accordance with our achievements (according to our government). These cuts will not even allow us to cover our overhead, much less turn a much deserved profit. Why don’t lesser-trained lawyers take a pay cut or suffer increased regulation of their livelihood? That’s right, I almost forgot – THEY are the ones MAKING the rules. No conflict of interest there.

    Be careful, people. Doctors are reaching their breaking point…there is only so much we can take. We deserve the money we make (and more). We have sacrificed more than you can ever imagine to get to this point. If you think otherwise, good luck finding healthcare in the future. Better start praying.

  • Maggie

    I want to know how many utility companies, landlords, medical device companies, clinical staff, professional staff, office supply companies, et al are open to taking a 23%++ cut from the physicians that pay them?

    Beuller? Anyone? Anyone?


    Voodoo economics.

  • sigmund

    The big elephant in the room here is the fact that physicians make much more money than they really should. Yes, I know that CEO’s, insurance administrators, etc. etc. make even more. But there is a huge number of doctors sucking the substance out of our country via outsize salaries. Other countries provide much better care with lower paid doctors (and lower paid healthcare administrators).

    Of course, a sudden cut of 23% will be extremely hard to absorb by the existing system. But that’s because the existing system is terrible. It is built to perpetuate exorbitant costs, including exorbitant salaries.

    We need a single payer system that totally eliminates insurance companies and a salary policy for physicians that makes it extremely rare for any doctor to make about $100K a year. That’s more than enough.

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