Medicare Is Already Rationing Care

by Dr. C.L. Gray

Rationing Medicare will not require clandestine meetings in smoke filled rooms. Simply reduce physician reimbursement to below the cost of delivering quality care, and free market forces will take care of the rest.

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Medicare has already begun the process of backdoor rationing. Facing overwhelming budget shortfalls, Medicare needs to trim its books. Washington found a clever solution: eliminate the billing code for “physician consults.”

As a hospital physician, I often admit Medicare patients with chest pain or shortness of breath. If my patient needs urgent help from a cardiologist, I call a colleague for assistance.

Until December 31, 2009 the cardiologist could charge a “physician consult” fee for getting out of bed, coming to the hospital, and evaluating a patient with a potentially life threatening problem. Medicare paid $195.76 for this middle-of-the-night work (the same rate as when done during the day).

By eliminating the “physician consult” billing code, Medicare now advises the specialist to charge for a “hospital admission.” For two more months, Medicare will pay $175.67 for this service. However, without a change in current law, the physician’s reimbursement for a “hospital admission” will drop to $141.63 on March 1. This is why the “Doc Fix” is so important for working physicians and their Medicare patients.

Other recent and obscure changes in Medicare guidelines are potentially even worse.

As of January 1, Medicare will not pay the consultant at all unless the admitting physician uses an “HI modifier” when billing Medicare for the initial admission. This means in order to get paid, the consulting physician must rely on another physician’s billing practice. Many physicians remain unaware of this obscure change (Medicare guidelines were altered as recently as December 17). The result? Many consultants will be denied payment altogether—yet another way to “save” Medicare dollars.

Most physicians function as small business owners. Consider what becomes of this $141 per consultation (assuming they are lucky enough to receive that):

Interventional cardiologists pay approximately $50,000 a year for malpractice insurance. If they work 40 hours a week, 50 weeks a year this means they pay $25 an hour for malpractice coverage. If they spend two hours in middle of the night coming in to see my patient, this effectively cuts their salary by $50. Earning $91 for middle of the night work simply does not cover the rent, utilities, and salaries for office staff that must be paid each month to keep the office doors open.

Why should seniors care?

Even before these cuts, Medicare already underpaid physicians by 15 to 25 percent compared to traditional insurance companies. No business can survive when expenses exceed revenue—no matter how well intentioned the physician.

When the pending $500 billion cut to Medicare (used pay for healthcare reform) is added to the cuts outlined above, physicians will be forced to limit their exposure to patients on Medicare. They will shift their work to younger, healthier patients who are less complex, require less time, and have traditional insurance. This kind of “reform,” even as millions of baby boomers enter the system, will only exacerbate the physician shortage for Medicare patients.

There are ways to “bend the curve” without sacrificing our seniors. But sadly, Washington chose another path. Politicians chose to reward political allies and pay off key Senators rather than protect American seniors.

Several common sense reforms would “bend the curve” without backdoor rationing. But Washington continues to ignore these ideas. These solutions include:

  1. End abusive medical litigation by passing patient-centered tort reform.
  2. Let businesses purchase insurance across state lines.
  3. Give younger, healthier Americans tax incentives to purchase low cost/high deductible plans and let them put pre-tax dollars into a healthcare savings accounts.

If Washington continues to protect political allies and buy Senate votes rather than pursue patient-centered reform, then let backdoor rationing begin. This is not overheated rhetoric. This is reality. Mayo Family Clinic in Glendale Arizona just announced it will stop accepting Medicare as of January 1.


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Posted Jan 4th 2010 at 8:13 am in Healthcare | 117 Comments