Medicare ‘doc fix’ debate in Congress less predictable this year

December 23, 2011

It’s become an unpleasant ritual for doctors who see patients with Medicare.

Every so often, they are threatened with a devastating cut to their Medicare reimbursements mandated by a rate-setting formula that leaders of both parties agree is flawed but would cost nearly $300 billion to permanently repeal.

Each time, doctors warn they are on the verge of dropping out of Medicare in droves, and the seniors they serve start to palpitate — even though health-industry lobbyists privately concede that there is virtually no chance Congress will actually let the pay cut take effect. And each time, after some down-to-the-wire haggling over how to cover the costs, lawmakers postpone the cuts.

On Friday, Congress passed the latest “doc fix,” delaying a looming 27.4 percent cut for two months as part of a larger deal to extend the payroll tax cut and unemployment benefits. But doctors, lobbyists and Medicare officials alike said this go-around seemed noticeably less predictable.

In an interview hours before congressional leaders announced the deal, Medicare’s deputy administrator, Jonathan Blum, observed that although the previous doc fix — a 13-month postponement agreed to in December 2010 — also was enacted perilously close to a deadline, “there were strong signals [beforehand] that Congress was coming together, and we were able to plan for that. But this, really to me, is a different scenario, where we don’t have clarity about what the timing of the ultimate policy will be.”

The heightened uncertainty surrounding this year’s negotiations eroded doctors’ long-term confidence in Congress, said Alan Wasserman, president of George Washington University Medical Faculty Associates, one of the largest practices in Washington.

“Physicians still think that the people in Congress are too intelligent to let [the pay cut] happen,” he said. “But we are concerned that as the rhetoric keeps getting turned up, and more and more, areas of compromise just aren’t there any more. Sooner or later, there is going to be an impasse.”

With this latest fix expiring on Feb. 29, doctors worry that moment could be around the corner.

“Congress now has to enact a real and fiscally responsible solution to this sorry cycle of scheduled cuts and short-term patches that compromises access to care for patients and drives up costs for taxpayers,” said Peter Carmel, president of the American Medical Association.

Doctors experienced a hair-raising run of short-term fixes in 2010 — when Congress enacted five separate postponements. And lawmakers actually missed the deadline twice that year, tech­nically allowing the cut to take effect for 14, and then 24 days.

Both times Medicare’s administrators were able to shield doctors by holding off on processing their claims until Congress had enacted the next fix, which then was applied retroactively. But the 24-day hold forced program officials and contractors to work overtime to get through the backlog of claims, Blum said.

That hold also stretched the finances of smaller practices, many of which had to take out loans, according to the AMA.

“Even if the cut only goes into effect for a brief period of time, physicians must make difficult decisions to keep their practices operating and meet overhead expenses, such as staff salaries and rent payments,” Carmel said.

Based on that experience, Blum said, Medicare officials have determined that if Congress were to miss another deadline, the longest the program would hold off on processing doctors payments would be 10 business days. After that, Medicare would begin paying claims at the lower rate with the expectation that officials could retroactively compensate doctors for the difference if a fix is passed.

With concern that the white-knuckle nature of recent negotiations could prompt some doctors to stop seeing Medicare patients, Blum said the program is extending the usual Dec. 31 deadline by which doctors must notify Medicare of their plans to participate in the coming year. Doctors now will have until Feb. 14.

“We want to ensure that physicians can make a well-informed decision,” Blum said.

For all the anxiety, government surveys of patients on Medicare suggest that, so far, there has not been a significant drop in the percentage of doctors willing to see Medicare patients.

The challenges seniors do face in getting medical care appear to be the result of a larger, nationwide physician shortage that has adults in their 50s with private insurance facing even greater difficulties. For example, in 2010, the most recent year for which data are available, about 17 percent of seniors reported some delay in seeing a doctor for an illness or injury, compared with 20 percent of patients 50 to 64 with private insurance.

Blum, however, said there still was cause for concern.

“I agree that on a national scale there continues to be high participation in Medicare. But we already hear concerns about certain pockets of the country and certain specialities,” he said. “And we really are very concerned that given the unpredictability of physician payments, more physicians will discontinue their participation with the Medicare program.”

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