Doctors and Medicare
Many concerns about Medicare and doctors can be traced to provisions of the Affordable Care Act—specifically to those calling for cuts in Medicare funding.
Those cuts are not insubstantial. They total over $700 billion—or over $14,000 for each person currently on Medicare.
According to Pres. Obama, ACA cuts to Medicare funding will not have a negative impact on Medicare recipients. Speaking out during last year’s presidential candidate debates, Pres. Obama declared the cuts were the result of “no longer overpaying insurance companies” and “making sure we weren’t overpaying providers.” Defending the cuts, the President said, “We were actually able to lower prescription drug costs for seniors by an average of $600, and we were also able to make a significant dent in providing them the kind of preventive care that will ultimately save money throughout the system.”
Opponent Mitt Romney and many Romney supporters viewed the cuts another way, however. Offering a rebuttal similar to the position put forth earlier in the campaign by his running mate Paul Ryan, Romney said, “Some 15 percent of hospitals and nursing homes say they won’t take any more Medicare patients. We also have 50 percent of doctors who say they won’t take Medicare patients.”
Many opponents of Obamacare, including Ryan, see cuts to Medicare as the inevitable result of shortcomings of the Affordable Care Act. In short, their position is that the ACA is not financially viable, and requires funding from another source if the President’s vision of government-mandated health coverage is to come true.
And what is that source?
As Ryan described it last year, “The planners in Washington didn’t have enough money. They needed more. They needed hundreds of billions more, so they just took it all away from Medicare. $716 billion funneled out of Medicare by Pres. Obama.”
During the first of last year’s three televised presidential debates, Romney attacked “the idea of cutting $716 billion from Medicare to be able to balance the additional cost of Obamacare.”
Wherever you stand on Obamacare, the cuts to Medicare are real. Whether you agree or disagree with the President about the need to be on guard against overpaying insurers and providers, it seems hard to argue with his opponents’ view that those cuts are in fact putting increased stress on Medicare recipients across the country.
Many doctors—already frustrated in their dealings with health insurers—report that they find it doubly frustrating to deal with Medicare.
Much of that frustration dates back to 1988, when Congress introduced a system of price controls called the Resource-Based Relative Value Scale (RBRVS). According to Forbes, the RBRVS did not achieve its aims of controlling Medicare spending largely because “doctors, especially specialists, compensated for being paid less per-service by performing more services.”
Hoping to establish a more effective way to control Medicare spending, Congress in 1997 passed a balanced-budget law which included a new payment formula for Medicare. According to Forbes, the new formula, called Sustainable Growth Rate (SGR), sought to tie “growth in physician fees to growth in the size of the nation’s economy, as measured by GDP.” However, the Houston Chronicle reports “the formula assumed low growth rates, and cuts expected to be modest turned out to be large.” The SGR has guided Medicare payments ever since, and the result is that many doctors feel they are grossly underpaid for the services they provide Medicare recipients.