Doctors again face steep Medicare cuts unless Congress acts before Jan. 1

From the Washington Post

It’s become a symbol of sorts for the federal government’s budget dysfunction: Unless Congress acts before Jan. 1, doctors will again face steep Medicare cuts that threaten to undermine health care for millions of seniors and disabled people.

This time it’s a 27.4 percent cut. Last year, it was about 20 percent. The cuts are the consequence of a 1990s budget law that failed to control spending but was never repealed. Congress passes a temporary fix each time, only to grow the size of reductions required next time around. Last week’s supercommittee breakdown leaves the so-called “doc fix” unresolved with time running out.

A thousand miles away in Harlan, Iowa, Dr. Don Klitgaard is trying to contain his frustration.

“I don’t see how primary care doctors could take anywhere near like a 27-percent pay cut and continue to function,” said Klitgaard, a family physician at a local medical center. “I assume there’s going to be a temporary fix, because the health care system is going to implode without it.”

Medicare patients account for about 45 percent of the visits to his clinic. Klitgaard said the irony is that he and his colleagues have been making improvements, keeping closer tabs on those with chronic illnesses in the hopes of avoiding needless hospitalizations. While that can save money for Medicare, it requires considerable upfront investment from the medical practice.

“The threat of a huge cut makes it very difficult to continue down this road,” said Klitgaard, adding “it’s almost comical” lawmakers would let the situation get so far out of hand.

There’s nothing to laugh about, says a senior Washington lobbyist closely involved with the secretive supercommittee deliberations. The health care industry lobbyist, who spoke on condition of anonymity because he is not authorized to make public statements, said lawmakers of both parties wanted to deal with the cuts to doctors, but a fundamental partisan divide over tax increases blocked progress of any kind.

The main options now before Congress include a one-year or two-year fix.

The problem is the cost. Congress used to add it to the federal deficit, but lawmakers can’t get away with that in these fiscally austere times. Instead, they must find about $22 billion in offsets for the one-year option, $35 billion for the two-year version. A permanent fix would cost about $300 billion over 10 years, making it much less likely.

“It’s going to be a real challenge, and there’s not a lot of time to play ping-pong,” said the lobbyist. “It’s entirely possible given past performance that Congress misses the deadline.”

Congressional leaders of both parties have said that won’t happen. Senate Finance Committee Chairman Max Baucus, D-Mont., says the Medicare fix is too important not to get done. But how? The endgame for a complex negotiation also involving expiring tax cuts, unemployment benefits and dozens of lesser issues remains unclear.

“They have to come up with a solution, and they will have to appear to pay for that solution, and that will be contentious,” said economist Robert Reischauer, one of the public trustees who oversees Medicare and Social Security financing. One option: cut other parts of Medicare. Another: trim back spending under the health care overhaul law. Either of those approaches would mobilize opposition.

A nonpartisan panel advising lawmakers is recommending that doctors share the pain of a permanent fix with a 10-year freeze for primary care physicians and cuts followed by a freeze for specialists. Doctors aren’t buying that.

The Obama administration says seniors and their doctors have nothing to fear.

But doctors are becoming increasingly irritated about dealing with Medicare. Surveys have shown that many physicians would consider not taking new Medicare patients if the cuts go through. Some primary care doctors are going into “concierge medicine,” limiting their practice to patients able to pay a fee of about $1,500 a year, a trend that worries advocates for the elderly.

Ultimately, the solution is an overhaul of Medicare’s payment system so that doctors are rewarded for providing quality, cost-effective care, said Mark McClellan, an economist and medical doctor who served as Medicare administrator for President George W. Bush. That continues to elude policymakers.

Instead, the threat of payment cuts has become a holiday tradition, said McClellan. “It’s just not a very enjoyable one.”


  1. Dr.Stephen Keister on December 1, 2011 at 5:03 pm

    At aged 90, and retired for some 20 years, I view this with two perspectives. One cannot countenance a cross the board cut in the fees of primary care physicians or we will lose the participation of many doctors who attend many Medicare patients, including myself. On the other hand the physicians doing specialized surgery or invasive procedures are greatly overpaid.

    An endocrinologist or thoracic surgeon spend an equal of number of years in training, yet the surgeon is paid 5-6 times more per hour than the endocrinologist. Why? Does merely working with ones hands deserve that much more compensation than working with ones brain? Does your plumber deserve a greater fee per hour than your accountant? It is time than all physicians are paid an hourly wage, regardless of speciality, as per present arrangements at the Mayo or Cleveland Clinics.

    I am a cancer patient and well understand the patients fears and anxieties in this discussion. Thus, it is time to convene a reasonable group in Washington from the ACP/College of Surgeons, Physicians For a National Health Plan, etc to work out a sane and reasonable plan of payment. I would not include the AMA in view of its many political ties to the health insurance industry and PhARMA.

  2. Marci on December 2, 2011 at 3:57 am

    Additional cuts to Medicare reimbursements are, to my mind, unconscionable. Dr. Keister, in his remarks above, makes some very good points which I believe the powers that be should take to heart. I am not one of the powers that be and I can only hope that I can continue to receive some care if this cut is allowed to go through. I fail to understand, I simply continue to fail to understand, why it is that our lawmakers are willing to spend untold sums to kill people in countries where no one asked us to be, yet cannot see their way clear to support minimal healthcare for our citizens in our own country. Why is that??? Is there something more cost-effective about killing strangers??? Really. I do not understand. And neither will most of the doctors in my small town.