Are Doctors Really Boycotting Medicare?

As Congress once again wrestles with “the doctor fix”—yet another postponement of the 21% cut in Medicare reimbursement that went into effect this month—the media has been swirling with stories warning of a mass exodus of doctors out of the federal program. The reason: In 2008 Medicare paid doctors 78% of what they get from private insurers; with the 21% cut they fear that their income will drop even lower.

The reports hit their peak late last week—USA Today wrote that “[t]he number of doctors refusing new Medicare patients because of low government payment rates is setting a new high,” while the American Medical Association announced that 31% of primary care doctors are restricting the number of Medicare patients they take. In a recent survey, the American Academy of Family Physicians found that 13% of respondents didn't participate in Medicare last year, up from 8% in 2008 and 6% in 2004. Chic Older, executive director of the Arizona Medical Association told the Seattle Times ; "If the 21 percent cut goes into effect, we're going to have a very severe problem in the state of Arizona."

The question is: Will Medicare beneficiaries really face a shortage of providers and restrictions on their access to care? Or is this a scare tactic being used for political reasons?

First off, all this is happening against the backdrop of a major political fight in Congress over how much the government should invest in economic recovery. On Friday, the Senate passed a “doc fix” that would postpone the 21% cut in Medicare payments for another six months and provides a 2% increase in reimbursement instead. Unfortunately for doctors—and the seniors they count as patients—Nancy Pelosi has signaled that she may not be willing to settle for such a short-term solution. According to Politico, Pelosi was “caught off guard last week when Reid suddenly opted to pull the Medicare issue out of a jobs and economic relief bill on which the two leaders have been working for months.” For more background on the long history of the “sustainable growth rate” formula that mandates the Medicare cuts (enacted in 1997 by a Republican administration) and the unlikelihood of it ever being instituted long-term, see Maggie’s recent post here.

Still, the reality of the situation is that until the House votes to reverse the cut (which it will surely do), the Center for Medicare and Medicaid Services (CMS) must process claims with the 21% reduction. This has spooked doctors and given health care reform opponents a scare tactic to use in their campaign to paint the legislation as posing a serious risk to Medicare. Even though the SGR cuts have nothing to do with Medicare reform—which promises to increase payments to primary care doctors by 10% among other actions—the confusion has heightened the concern of providers.

The American Medical Association and some state-based medical societies have been warning of a growing boycott of Medicare by their members; releasing alarming statistics about doctors dropping out of Medicare or refusing to accept new patients who are covered under the program. They also warn of a huge onslaught of new Medicare enrollees as the more baby boomers become eligible for the program (something that won't really peak  until 2020).

What is the real story here?

The Centers for Medicare and Medicaid Services says that 97% of doctors accept Medicare. The agency doesn't know how many have refused to take new Medicare patients, Deputy Administrator Jonathan Blum told USA Today. "Medicare beneficiaries have good access to physician services. We do have concerns about access to primary care physicians." This is not a new problem, but an ongoing workforce issue—the need to increase the number of primary care practitioners available, especially as 31 million more Americans obtain health care benefits under reform legislation, is pressing.

A survey released last September by the Center for Studying Health System Change found that 75 percent of physicians it surveyed accepted all or most new Medicare patients in 2008. In that same survey, some 87% of doctors said they were accepting most if not all new patients who were privately insured. And in its annual report to Congress in March, MedPac found that Medicare patients actually have an easier time finding doctors than their privately insured counterparts who are age 50 to 64. Only 6 percent of Medicare beneficiaries looked for a new primary-care physician in 2009. Within that group, just 12 percent said finding a doctor to treat them proved to be a big problem, the study found.

That compares with 8 percent of privately insured people ages 50 to 64 who looked for a new primary-care doctor last year, 21 percent of whom said finding one was a big problem. Clearly, the shortage of primary care physicians is has not reached a crisis point for Medicare recipients. (Those Americans covered under Medicaid, on the other hand, do have a serious problem accessing care: In the CSHSC survey, only 56% of physicians indicated that they were accepting most if not all new patients who had Medicaid; 28% reported accepting no new Medicaid patients.)

Kaiser Health News spoke with several doctors around the country about their frustration with the constant threat of the Medicare pay cut and in these vignettes you catch a more of the real story: Many physicians—especially those in primary care—are tired of worrying about the significant income loss they’ll face if the pay cuts go into effect. They are too busy with their practices to analyze the political posturing going on in Congress, and not yet convinced that the new health care legislation will lead to beneficial reforms and an increase in compensation from Medicare. In reality, leaving Medicare completely is not an option for most of these doctors, including those who work for hospitals and those like many cardiologists and geriatricians whose practices are predominantly made up of senior citizens. Also, once physicians choose to drop out of Medicare all together, they cannot submit any claims to the program for two years—even if payment policies change.

Still the panic and unease among many doctors remains palpable. In some cases they may be responding to urgent communications from their state medical societies about doctors leaving Medicare. For example, last month the Houston Chronicle reported; “Two years after a survey found nearly half of Texas doctors weren't taking some new Medicare patients, new data shows 100 to 200 a year are now ending all involvement with the program. Before 2007, the number of doctors opting out averaged less than a handful a year.”

Dr. Susan Bailey, president of the Texas Medical Association told the Chronicle, “This new data shows the Medicare system is beginning to implode. If Congress doesn't fix Medicare soon, there'll be more and more doctors dropping out and Congress' promise to provide medical care to seniors will be broken.”

The Texas Medical Association says that their survey also had these alarming findings: “In 2008, 42 percent of Texas doctors participating in the survey said they were no longer accepting all new Medicare patients. Among primary-care doctors, the percentage was 62 percent.”

Of course, the Texas Medical Association and its powerful political action arm (TexPac) broke ranks with the American Medical Association and opposed health care reform efforts throughout 2009. According to the Chronicle article, “TMA President Dr. William Fleming said ‘reform is doomed to failure’ without Medicare reform and called Congress' failure to devise a rational payment plan ‘an insult to seniors, people with disabilities and military families.’”

It makes you wonder if the TMA’s reports of doctors boycotting Medicare are being used to sway public opinion on two distinct fronts. Like some fifty-one state medical societies who have signed a petition calling for Congress to abolish the SGR, the Texas chapter is lobbying to eliminate this balky and unworkable formula. But the group’s efforts may also be aimed at heightening opposition—especially among senior citizens—to health reform legislation in general.

After all, two hundred doctors opting out of Medicare in Texas is really just a drop in the bucket: There are nearly 60,000 non-federal physicians practicing in the state already. And according to the Wall Street Journal, in the first three years after Texas passed malpractice tort reform, some 7,000 new doctors “flocked” to the state—many of them practicing in obstetrics and primary care medicine.

In New York, the state medical society announced that about 1,100 doctors have left Medicare. As a matter of principle and to draw attention to the low reimbursement paid by Medicare, the president of the society announced that she will no longer take new Medicare patients. This also is little cause for alarm—there are over 88,000 total physicians practicing in New York State. And Leah McCormack, the president of the Medical Society of New York is a dermatologist in Forest Hills, Queens—a specialty practice where there are likely enough non-Medicare patients coming in to the office for cosmetic and other work to keep her practice profitable.

In the end, the battle over ending the SGR cuts to Medicare reimbursement is an emotional one for doctors. Even though primary care doctors earn an average of $186,044, many report that they struggle to keep their practices profitable and are forced to see more patients and reduce the time they spend with them. Much has been written about stemming the projected shortages in primary care; the need to better compensate such practitioners for preventive and other care; and fundamental changes that are needed in medical education. These are important issues that will be tackled as we begin to implement health reform over the next several years. The take-away message is that while the 21% cuts doctors are now facing are an administrative nightmare, they will be fleeting. And reports of a mass exodus by doctors from Medicare are overblown. Everyone agrees that Medicare needs an overhaul—but a misguided formula from a Republican Congress in 1997 will have no part in it.

28 thoughts on “Are Doctors Really Boycotting Medicare?

  1. I am not sure about a “boycott,” but those of us PCP’s who pay our own bills (private practice physicians) do have to make a business/financial decision. Medicare is already borderline for us in terms of reimbursement – after paying overhead, if we were previously taking home 5% of our charges, we were doing well, so you can see what a 21% cut means.
    We docs do realize the propensity of congress to get to the edge and then pull back, and most of us understand that this has nothing to do with the HCR bill. I am not scared because of what the AMA says, or because of conservative politicians – well, maybe the latter scares me some, but for a different reason – I am scared because I don’t want to decide between a 21% paycut and seeing my patients. Until the paycut is erased and the SGR is eliminated, I will be thinking about dropping Medicare.
    Be careful not to put physicians in a box. The AMA is only slightly more trusted than congress (maybe less so by PCP’s). See my post, “When Good Conscience is Bad Business,” if you want to understand more from the trenches (face to face, doctors with patients).

  2. Sometimes things don’t appear as they seem, in many aspects of life. Good job Naomi.

  3. I agree there is no real problem but these stats are more for creating news. In current situation many doctors will respond that they are ‘thinking’ of dropping medicare but very few will follow through. Honestly no one can practice without Medicare in real medicine unless it is cosmetic etc

  4. Naomi-
    Thanks so much for this important reality check. I’m tired of doctors crying the financial blues.
    Put them all on a good salary so that they can get back to practicing medicine instead of running a business.
    If they don’t like that – good riddance!
    Dr. Rick Lippin

  5. I find that salaried doctor’s tend not to give the best customer service and that is why I only go to private doctors. I wonder if salaried docs are jealous of those in private practice.

  6. Naomi
    Then you and Maggie should be advocating for the 21% cut like myself. Consider your bluff called. I am more than willing to see what happens.. Let us finally see what healthcare reform is really about. It’s not about cost, or patients, or outcomes, or anything tangentially related to healthcare, for that matter. It has always been about one thing and one thing only, CONTROL. Thanks for proving my point Rick.

  7. Thanks to all for your comments. Rob, I think you put it well when you describe the pressures, both financial and personal, facing the private practice physician. And I agree that the 21% paycut is a distraction that prevents long-term thinking about real Medicare reform.
    I’m not really sure what”bluff” you are calling by challenging me to support the 21% paycut. I don’t believe that it has anything to do with true health care or Medicare reform which will involve prioritizing primary care and reducing the current emphasis on interventions and procedures that leads to over-treatment and waste. Control may be the issue you have identified but I see health reform as promoting standardization of the most effective care and the most comprehensive care for all Americans.

  8. “I find that salaried doctor’s tend not to give the best customer service and that is why I only go to private doctors. I wonder if salaried docs are jealous of those in private practice.”
    Not this salaried doc, or any of my salaried colleagues, either.

  9. In my practice I am “boycotting Medicare” until I see whether the drop in payments will be rescinded. We have canceled about 20 Medicare appointment this week, and will reschedule them only when the payment rate is restored. Of course, I will not turn away any patient with an emergency.
    Why the work stoppage? I do not choose to work for 42.6% less than I made last month. Even if I did, I don’t know what to charge the Medicare patients. If I over- or under-charge them, I could be accused of wire fraud and fined $50,000 per occurrence. Why do I say 42.6 percent? Our overhead is about 50%. Congress didn’t reduce my rent, phone or supply bill, or employees salary and benefits by 21.3%. So the entire cut comes out of my hip pocket. Then I would be earning about what my receptionist and billing person makes.

  10. Dare I say — “Money Driven Medicine”? I believe Maggie has documented that salaried physicians have higher job satisfaction and certainly must have lower job-related stress rates. There’s no reason why a PCP shouldn’t make $150,000+ a year, sans the overhead and frustration of running a business. The business of doctors should be doctoring patients, not accounts.

  11. from the patients perspective it is frustrating to wait 4 weeks to see a dermatologist then drive 15 miles to the appointment to find that they just stopped seeing medicare patients and be told to just go some where else. This is especially iritating when you have a lesion on your foot that hurts.
    If Doctors do not want to treat people they need to find another job.

  12. Who says they don’t want to treat people? They just simply don’t want to work at a price the government has deemed their effort, risk and time away from their family to be worth.

  13. Naomi Maggie,
    A recent article in Health Affairs (Bryan T. Vaughn, Steven R. DeVrieze, Shelby D. Reed, and Kevin A. Schulman
    Can We Close The Income And Wealth Gap Between Specialists And Primary Care Physicians?
    Health Affairs, May 2010; 29(5): 933-940.) finds that the increases in payment rates to primary care physicians within the health reform legislation “will do little” to narrow the gap in compensation between specialists and primary care physicians. They conclude that equalizing the rates of returns to primary care would require a combination of reduction in specialist comp or increase in primary comp in the neighborhood of $100,000 per year. Do you agree with this result? If so, it seems clear that health reform is going to run into serious problems with implementation. Even if there is not currently an exodus from Medicare, given that the incentives continue to discourage physicians from entering primary care, both Medicare and Medicaid patients are likely to see serious access problems as PPACA expands private coverage. Surely the highest payers (private) are likely to attract the scarce supply? Even if SGR is permanently “fixed” Medicare and Medicaid fees remain below private health insurance. Not only does this imply access problems, it implies difficulties in implementing pilot programs for bundling and accountable care, as the real-world prototypes on which these programs are based rely on an expanded role for primary care. Even given the greater flexibility in relative payment rates within bundled payments (so Medicare could in theory pay more for primary care than it does under FFS) any increase for primary care would require a decrease in the use and price of specialty care. Since participation in the pilots is voluntary – why would specialists opt in if they get paid less than under fee-for-service?

  14. Old Doc–
    This is Naomi’s excellent post, but I feel compelled to reply to your comment.
    You write: “We have canceled about 20 Medicare appointment this week, and will reschedule them only when the payment rate is restored.”
    It’s one thing to decide not to take more Medicare patients, another to cancel appointments for 20 patients in one week.
    Can you begin to imagine the amount of anxiety that these patients must be experiencing?
    You deemed their appointments “not an emergency.”
    But I’m sure that many of these older patients felt that their appt. was necesary.
    Given how hard it is for anyone to find a new primary care doctor these days (young, or old–this has little to do with Medicare, much to do with the shortage of PCPs due to poor working conditions, and low payments from private insurers as well as Meidcare), just how panicked do you think your patients are?
    You offer a very clear example of “doctor-centered medicine” vs. “patient-centered medicine.”
    Now that the cut has been postponed, I hope that at least some of your patients are wise enough not to return to you.

  15. Really sustainable report, but this is more for creating news , i think AMA is more trusted than congress. At the patient end this is frustrating to wait several weeks to see a Physician then drive 20 miles to the appointment to find that they just stopped seeing medicare patients and be told to just go some where else. This is especially irritating when you are unable to travel due to your condition.

  16. I agree. Many physicians have to look at there decision from a business standpoint. They have to endure a pay cut but their staff, bills, rent, and etc does not have a price cut. They still have to provide them with their salaries and benefits. Many may want to stop seeing Medicare patients so they don’t have to worry about the headache that comes along with this decision but can their business sutstain if they decide to do that. Medicare patients make up the bulk of patients in a private practice. Do you think they can afford to not see them? They may not want to accept the payment amounts but I do not think they will turm them all away.

  17. This is proof that there is no doctor shortage. The USA has plenty of doctors — in fact we have so many that they are competing against each other to see who can ring up the highest bill. Doctors dont lower prices when they “compete” instead they search around and fish for new patients that dont need any workups done.
    There are about 3 times too many doctors in the big cities and about 25% fewer than we need in the rural areas. Building new med schools or increasing residency spots wont do a freakin thing to change that–neither will adding more NPs or PAs. Everybody loves the big cities over the rural areas.

  18. I have found so many interesting articles & information on various topics in your blog especially its discussion. I guess I am not the only one having all the enjoyment here! keep up the good work. I like your presentation.

  19. I learned during the last Presidential election that there were more retirees in Pennsylvania than any other state. This came from CNN when discussion began about the weight of voters in what state and how retirees were likely to vote.
    From a reluctant Arizonan

  20. In response to Dr Lippin’s statement “put them all on a salary and if they don’t like it good riddance.”
    Try putting everyone on a salary and you will get the most inefficient healthcare system in the world. If I were a doctor paid a salary and not a business owner as well why should work hard to find ways to make a practice more efficient, decrease costs, streamline a process to maximize my time so that I can see the most patients effectively. Who cares, I’ll see 20 patients a day and go home to my wife and kids.
    That’s what happens in our government, the mentality shifts from entrepreneur to employee. As an employee I have no incentive to find ways to reduce costs, streamline a process, or work harder and longer. You have a communist medical model, patients will wait 6 months to see their primary care physician and 9-12 months to see a specialist. Look up wait times for appointments Canada. Outcomes are much worse as serious medical conditions go untreated for a longer period of time, possibly even death, but I guess as more patients die from untimely care that will reduce costs significantly. That is if they die, if they don’t the serious complications that arise in such a scenario will lead to significant cost for the healthcare system and disability for the patient. It’s akin to penalizing those who are the most productive and rewarding the average. In short it promotes mediocrity.