Payment Limbo: Medical societies take on SGR reform

In June, Congress gave physicians relief from the scheduled 21 percent Medicare pay cut, but only until the end of November. The payment patch, which briefly increases reimbursement by 2.2 percent, leaves doctors in limbo.

If Congress doesn’t intervene by Nov. 30, a 23 percent cut will go into effect in December and increase to nearly 30 percent in January. Now that health reform has passed, medical societies are doubling their efforts to get Congress to repeal the physician payment formula, based on the sustainable growth rate (SGR), and to introduce a system in which annual payment updates reflect changes in the cost of practicing medicine.

Many physicians are still upset that the law did not include permanent Medicare payment reform. “The most sweeping health care reform in a generation has just been passed this year. It’s interesting that the [Medicare payment] formula was not even addressed in this massive health reform legislation,” said Pete S. Batra, MD, associate professor and co-director of the Comprehensive Skull Base Program at the University of Texas Southwestern Medical Center at Dallas.

The June 24 temporary payment measure passed three weeks after the 21 percent pay cut went into effect. The patch was retroactive to June 1, but many physicians experienced cash-flow problems in the interim, according to J. James Rohack, MD, immediate past president of the American Medical Association (AMA). Some limited the number of Medicare patients they saw, and others had to take out loans to meet payroll.

A May 2010 AMA survey of 9,000 doctors found that 17 percent of physicians are restricting the number of Medicare patients in their practice. The top two reasons given: Payment rates are too low (85 percent), and the ongoing threat of payment cuts makes Medicare an unreliable payer (78 percent).

If cuts go through in December, more doctors will be forced to make tough decisions about Medicare, Dr. Rohack said. The survey found that 54 percent of physicians would restrict the number of Medicare patients they treat, 50 percent would stop taking new Medicare patients and 31 percent would stop taking any Medicare patients.

“A physician doesn’t need to have an MBA to say, ‘Do I want to participate in this insurance product that isn’t going to cover my costs and is going to require me to do a whole bunch of other things like the physician quality reporting initiative and investing in health information technology?’” Dr. Rohack said.