AMA: Senate fails to stop a Medicare meltdown

A guest column by the American Medical Association, exclusive to

by J. James Rohack, MD

Unbelievable as it is, for the third time this year the Senate failed to act on time to stop this year’s 21 percent Medicare physician payment cut. Senators cut and ran on America’s seniors and their physicians, heading home for the Memorial Day recess before taking action. Now the Senate is back in Washington, but they still have not voted to stop the cut, which began on June 1.

The AMA will not sit silent as the Senate turns its back on our nation’s seniors, military families and the physicians who care for them by failing to stop a 21 percent Medicare cut to physicians before the June 1 deadline. We’re turning up the heat with a multi-million dollar ad campaign focusing attention on the Senate’s failure to stop the Medicare cut in time over Congress’ Memorial Day recess. The TV, radio and print ads encourage the public to contact their Senators and say: Tell your Senators to get back to work and fix Medicare now.

At the AMA’s annual meeting this weekend, physicians will participate in a White Coat Rally – signing their outrage on white coats that will be delivered to congressional offices in Washington.

The Center for Medicare and Medicaid Services (CMS) again put a hold on claims for 10 business days to give the Senate time to vote, but that hold expires on Tuesday, June 15. It’s unclear if the Senate will meet that deadline as well. And frankly, this hold is just a minor stop-gap measure. The uncertainty is already taking its toll. Physicians are frustrated and they are making practice changes.

Our new online survey of 9,000 physicians who care for Medicare patients finds that seniors are already being hurt by Congress’ mismanagement of the Medicare program. About one in five physicians say they are already limiting the number of Medicare patients in their practice. In primary care the numbers are even worse, with nearly one-third of primary care physicians already forced to limit the number of Medicare patients they can treat. The top two reasons physicians gave for having to limit the number of Medicare patients is the ongoing threat of future cuts and low Medicare payment rates.

Last week, the AMA held a news conference on this crisis and I shared the following true story: The day before the news conference, the AMA received a call from Joan, a retired nurse. She was looking for a physician in Maryland for her 72 year-old sister and could not find one that took Medicare. Both physician offices she called said that as of this June 1 they were no longer accepting new Medicare patients.

I’m sure Joan’s experience is not unique, and it jibes with what we found in our new survey. In response to this year’s two previous short-term delays to the 21% Medicare physician payment cut, nearly two-thirds of physicians looked into opting out of Medicare and treating patients through the private contracting option. Physicians also: delayed payments for supplies, rent and/or other expenses (39%), took out a loan or line of credit in order to continue paying bills (17%), held up paychecks or laid off/furloughed staff (17%), cancelled or postponed scheduled services to Medicare patients (14%) and temporarily closed practice to new appointments with Medicare patients (13%).

Medicare payment rates are already far below the cost of providing medical care. In fact, payments are about where they were in 2001 while costs are up over 20 percent. Congress cannot expect physicians to adopt health information technology, engage in quality improvement and care coordination initiatives with payments far below the cost of providing medical care. It costs a physician anywhere from $30,000 – $44,000 to purchase and implement an electronic medical records (EMR) system. Ongoing costs to keep the system up and running are about $8,500 annually.

Everyone recognizes that the formula Medicare uses to calculate physician payments is hopelessly broken and in need of repeal. The temporary band-aids that Congress has grown accustomed to applying to this issue have grown the problem. The cost of a temporary solution now significantly exceeds what it would have cost to implement a permanent solution just a few years ago. Today, we are dealing with a 21 percent cut, and the bill passed only y the House that delays the cut 19 months would result in a 33 percent cut in 2012.

President Obama, Republicans and Democrats in Congress, MedPAC and other health policy experts have all said the current payment system is broken. In fact, President Obama repeated the need for a permanent fix and quick action to stop this year’s cut at a town hall event with seniors earlier this week. We will keep up the pressure on Congress until the Medicare physician payment problem is fixed once and for all so that dedicated physicians can continue to care for seniors now and well into the future.

J. James Rohack is President of the American Medical Association.