Deep Medicare Cuts Set to Take Effect Tuesday, June 1, 2010

Senior Citizens Could Face New Obstacles to Getting Care, After Payments Are Cut 21%

For the third time this year, Congress has failed to prevent deep cuts in Medicare reimbursements from taking effect, jeopardizing senior citizens' access to healthcare and aggravating physicians who are doing their best to serve their patients but don't know if they can pay their bills month to month.

Senate leaders said Thursday the U.S. Senate would head home for the Memorial Day weekend before voting on legislation the House passed on May 28, 2010, to block the cuts. On Tuesday, June 1, 2010, a 21% reduction in Medicare payments will kick in. The lower payments will force physicians to make tough decisions about whether to subsidize care, quit taking new Medicare patients, or drop out of the program altogether.

"Doctors are outraged by Congress's inability to protect health care for senior citizens and provide stable funding for Medicare," said Brennan Cassidy, MD, president of CMA. "This is a recurring nightmare for seniors and the doctors who serve them. Physicians don't know what the government programs will pay and don't know if they can remain economically viable. This makes it very difficult to provide patients with the reliable quality and access they deserve."

The federal agency that oversees Medicare — the Centers for Medicare and Medicaid Services (CMS) — has instructed its contractors to hold physician claims for 10 business days. The hold, which will only affect claims with dates of service on or after June 1, 2010, gives Congress additional time to act before physician payments are impacted.

The cuts are mandated by the flawed Sustainable Growth Rate (SGR) formula, which Congress passed in 1997 but has proved to be an inaccurate and outdated predictor of healthcare industry trends. For years, the SGR has not kept pace with rising healthcare costs and has prescribed reductions in physician reimbursement rates, but Congress has routinely intervened to prevent the cuts.

This year, the cuts were originally scheduled for January 1, 2010. Unable to agree on how to resolve the underlying problem, Congress temporarily delayed the SGR mandate three times this year: until March 1, April 1, and June 1.

The lower pay would mean many doctors would not be able to operate in the black when treating Medicare patients. As a consequence, physicians may opt to quit taking new Medicare patients or drop out of the program, making it tougher for seniors to find doctors who will treat them.

The California Medical Association is calling on the Senate to pass the House legislation reversing the Medicare cuts as soon as possible and has joined with the American Medical Association, AARP, and other groups representing seniors and physicians to call for immediate intervention.

"Every senior and his or her doctor should contact their member of Congress today and demand action," Cassidy said. "Healthcare is meaningless if patients cannot get access to care."

Cassidy praised California's congressional leaders for working hard Friday, May 28, 2010, to pass legislation blocking the cuts but condemned the Senate for not following suit.

"California's physicians are grateful that the House has acted to provide temporary relief on Medicare rates, but it's a futile exercise if the Senate fails to act," Cassidy said. "Unfortunately, this legislation is only temporary. It's critical that Congress solves this problem once and for all with a stable funding system that ensures senior citizens can see a doctor not just this year, but in 2012 and beyond."

For physicians participating in Medicare, the House passed bills that would:

• Prevent cuts in reimbursements from occurring prior to 2012.
• Increase reimbursement rates 2.2% in 2010.
• Increase reimbursement rates 1% in 2011.
• Adjust Medicare rates in 14 rural and semi-rural California counties, where the cost of doing business has risen steadily for years, but where reimbursements have remained the same for over a decade. The counties are El Dorado, Marin, Monterey, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Luis Obispo, Santa Barbara, Santa Cruz, Sonoma, and Yolo.