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Medicare Reimbursement Update

Oct 28, 2011

In yet another warning to lawmakers, a new survey of group practices shows that 51% will reduce the number of available appointment slots for new Medicare patients if Congress does not avert a 29.5% Medicare pay cut set for January 1.

Another 30.9% of group practices would stop seeing new Medicare patients altogether, according to the survey conducted by the Medical Group Management Association (MGMA). And 34.8% would reduce access to existing Medicare patients.


The MGMA says it intends to impress these findings on the Congressional Joint Select Committee on Deficit Reduction, the “super committee” tasked with recommending $1.5 trillion in savings that Congress must enact by December 23. Organized medicine is strenuously lobbying the super committee to repeal the sustainable growth rate (SGR) formula for physician reimbursement, which is triggering the scheduled reduction in 2012.

Physicians have faced SGR-mandated pay cuts each year since 2002. Except for a 4.8% reduction that went through in 2002, Congress has always postponed them, but postponement has caused them to accumulate to the point of catastrophe. Last year Congress voted no fewer than 5 times to stave off a reduction topping 20%.

Life on the edge of the SGR cliff has taken its toll on physicians. Sixty-five percent of respondents to the MGMA survey, released Monday, reported that they have delayed buying new clinical equipment and facilities because of the uncertainty over Medicare reimbursement. Roughly half said they have had to reduce charity care, the size of their administrative staff, and staff salaries and benefits.

“Our data reflects a dire Medicare environment for physician practices,” said Susan Turney, MD, president and chief executive officer of the MGMA, in a press release. “The 5 short-term congressional patches last year substantially diminished practices’ faith in Congress and the stability of the Medicare program. This time, practices are not waiting to implement tough business decisions. The SGR is a runaway train that threatens the future of Medicare.”

A repeal of the SGR would not necessarily end the Medicare reimbursement crisis. Earlier this month, the Medicare Payment Advisory Commission (MedPac) recommended a “doc fix” for the SGR problem that would freeze reimbursement rates for primary care physicians for 10 years while cutting rates for specialists by 5.9% for 3 straight years, followed by zero growth over the next 7 years. Organized medicine has warned that these draconian measures, if approved by Congress, also would drive physicians out of Medicare and make it harder for seniors to get the care they need.

Medscape Today