Nevada doctors fear fallout from planned Medicare cuts
Planned reductions in Medicare that could affect access to treatment for patients of all ages have sparked opposition from a trade group and raised concerns among Nevada doctors.
The American Medical Association is lobbying against a series of cuts in the payments Medicare makes to doctors who treat seniors. The drop in reimbursements would begin at 10 percent in January and reach nearly 40 percent through 2015.
Nevada, with its low doctor-to-patient ratio and its high proportion of retirees, could especially suffer from the physician shortages that might follow the cuts, health professionals said.
Local doctors said the slashed reimbursements would further pinch their practices, which are struggling from previous cuts and pay freezes.
About 55 percent of general internist Sarah Heiner’s practice at Nevada Internal Medicine in Las Vegas consists of Medicare recipients.
To cover her costs, Heiner charges $92 to $103.50 for a 15-minute office visit — an appointment for which Medicare pays $46. With a $12 patient copay, Heiner is reimbursed $58 for the consultation. An hour-long physical, complete with an analysis of family health histories and tests, costs $210, while Medicare reimburses less than $100.
"Nobody is covering the cost of care," Heiner said.
The expense crunch is the same at Generations Medical Center in Las Vegas, where owner, internist and pediatrician Arezo Fathie averages $300 per hour in overhead, including employees’ salaries, rent and liability insurance. Her reimbursements from Medicare, which covers 70 percent of her patients, and private insurers often fall short of her business outlays, she said.
The proposed cuts come from the 1997 Balanced Budget Act. The law’s drafters added measures to contain increases in Medicare’s costs, which were jumping about 8 percent a year, or almost three times the rate of inflation, in the mid-’90s.
Following reimbursement cuts in the late ’90s and early ’00s, Congress nixed a 4 percent pay decrease in 2002. Federal lawmakers froze pay declines in 2003, 2004 and 2005 in lieu of 1.5 percent annual increases.
Medicare pay to doctors didn’t increase in 2006 or 2007, but it didn’t drop 5 percent a year according to plan, either. Now, to stay on schedule with payment reductions legally mandated through 2015, deeper cuts are on tap starting in January.
Dr. Cecil Wilson, chairman of the board of the American Medical Association, said pay cuts, freezes and small increases in the past five years mean physicians are essentially earning the same Medicare pay as they were netting in 2001.
"Reimbursements are not even accounting for inflation," Wilson said.
The difference between Medicare payments and costs is already affecting patients, Wilson said. He pointed to a recent study from MedPAC, a congressional advisory committee on Medicare, that found 25 percent of seniors now have trouble finding a primary-care doctor willing to take on new Medicare patients.
That percentage could rise if January’s 10 percent cut takes effect, Wilson said.
In an American Medical Association survey of 9,000 doctors released Monday, 60 percent of respondents said they would limit the number of new Medicare patients they treat, and 40 percent said they would let go of existing Medicare patients as well. More than three-quarters of doctors would take fewer new Medicare patients if reimbursements fell 40 percent by 2015, and 68 percent of respondents would see fewer established Medicare patients.
But the effects of lower reimbursement will extend well beyond Medicare recipients, officials of the medical association said.
First, because many private insurers peg their reimbursement rates to federal levels, a decline in Medicare pay also could mean lower payments from managed-care companies.
Second, more than two-thirds of the physicians who answered the medical association’s questionnaire said January’s 10 percent cut in Medicare pay would lead them to defer investments in their practices, including the purchase of new equipment and information technology. More than half would let go of staffers and discontinue visits to nursing homes, and 14 percent would leave private practice altogether.
Nevada in particular can’t risk losing more ground in patient access, Heiner said.
The Silver State is No. 45 in the nation in its number of doctors per capita, according to the U.S. Department of Health and Human Services. Nevada is also a top destination for retirees; the state already harbors more than 275,000 Medicare recipients out of a population of 2.45 million.
"We can’t afford (to lose doctors) in Nevada, because we’re already so understaffed across the board," Heiner said. "We might see patients start leaving the state for care."
Nevada’s congressional delegation is working to stop the January cuts. Reps. Shelley Berkley, a Democrat, and Jon Porter, a Republican, are on the House Ways and Means Committee, which oversees taxes, revenue increases and entitlement programs such as Medicare. Spokesmen for both said they each support the medical association’s efforts to halt the coming pay cuts, just as they favored a December moratorium on a 5 percent drop scheduled to take effect in January.
U.S. Sen. John Ensign also supports the freeze, said spokesman Tory Mazzola.
All three legislators would like to see a permanent fix. Among the suggestions is a system that would index annual Medicare pay increases to inflation.
Unless Congress establishes such an index, local doctors said they’ll change their practices to adjust to the lagging Medicare payments.
Fathie is considering switching to a cash-based payment system that deals directly with patients rather than accepting reimbursements from insurance companies, and she’s also weighing a nonprofit model for her business.
She’s added cosmetic goods and services including laser skin rejuvenation and Botox injections — cash-based services that insurance doesn’t cover — to supplement the medical side of her practice. She also might merge operations with other doctors to share expenses. She’ll even entertain closing her practice if Medicare payments drop too much.
One move Fathie said she doesn’t plan to adopt: the 10-minute model that shuffles doctors through visits with at least five to six patients an hour to maximize income.
"I’m going to do everything in my power to keep my practice open," Fathie said. "But if you want to give good health care, you need to be able to develop a relationship with your patients and become an ally to them and their families. That takes time. Health care is almost treated like a fast-food business these days, but we’re not like the fast-food industry.
"I started out feeling like I wanted to save the world. But every day, I feel like I’m getting further and further away from doing that."
