Why Are So Many Doctors Leaving Medicare?

The view many doctors have on Medicare funding has certainly been noted by politicians, and there have been attempts to find payment solutions satisfactory to both doctors and politicians. However, in situations where politicians had to scramble in order to resolve funding issues, Forbes reports that, since the balanced budget law was passed in 1997, “only short-term fixes—14 of them since 2002—have been passed as a stopgap measure.”

As Robert Wah, an endocrinologist at the National Institutes of Health and the Walter Reed Army Medical Center, declared at NPR.org, “In 2010, Congress did this to us five times. There were five patches put in place” to stop scheduled Medicare cuts, “and a couple of times they actually waited until after the deadline”—meaning, payment to doctors was delayed.

Uncertainty of this sort explains why many doctors are opting out of Medicare. Even when payments are not in jeopardy, many doctors nationwide simply seem convinced that the Medicare payment formula is not allowing them fair compensation for their services.

According to Dr. C.L. Gray’s January 2010 guest article at FoxNews.com, during the first decade of the 2000s Medicare paid physicians 20% less than traditional insurance companies for the same service. And, remember, many doctors were already dissatisfied with what those traditional insurance companies were paying them.

The most recent cuts in Medicare payment to doctors took effect on April 1 of this year as a result of sequestration cuts. With many doctors arguing that their practices are small businesses and their fixed costs are not reduced in proportion to reductions in what Medicare pays them, an ever-increasing number of providers and practices seem to be washing their hands of dealing with Medicare. Gray reports that even the world-renowned Mayo Clinic’s facility in Arizona stopped accepting Medicare in 2010, two years after posting an $840 million loss in caring for Medicare patients.

Reporting on a survey of about 700 doctors, Townhall.com says two-thirds of those doctors indicated they were either in debt or just getting by financially. While acknowledging that they generally make healthy incomes compared to the majority of Americans, many doctors are quick to point out that they also face a barrage of costs most other people don’t have to worry about—from medical school expenses to the costs of setting up and maintaining practices. Some argue that, given their large expenses, they simply cannot afford to accept Medicare patients, or even patients who belong to many private insurance plans.

Some doctors also argue that participating in Medicare places them under unfair scrutiny. Gray, who is also President of Physicians for Reform, makes the case that, with increasing pressure on politicians to reduce Medicare spending, “one way to do this is to intimidate physicians into under-billing.” How is this done? According to Gray, Washington is able to intimidate doctors through “physician audits using Recovery Audit Contractors (RAC audits) to randomly investigate private physicians’ Medicare billing.”

Describing the experience of some of his colleagues who had been audited, Gray says, “For a year Medicare auditors made their practice a living hell, making them question if it was worth caring for Medicare patients at all.” According to Gray, as a result of the audit his colleagues were wrongly charged with fraudulently billing Medicare before being vindicated—and stuck with legal defense bills totaling over $100,000. The auditors, according to Gray, were “bounty hunters” who were “clearly after money, not justice,” and given legal immunity in the event they were countersued.

While other parties may not share Gray’s view, clearly there are doctors across the country who do. To a growing number, when it comes to taking on Medicare patients under current conditions, the drawbacks outweigh the benefits. This is likely to remain the case until Washington introduces incentives attractive enough to draw doctors who’ve opted out of Medicare back into the system. With the number of Medicare recipients expected to grow substantially in coming years, nearly everyone agrees that the sooner responsible incentives are introduced, the better. As things stand now, far too many Medicare recipients are being deprived of the opportunity to take full advantage of the Medicare benefits they were promised—and millions of Americans are tired of waiting for Washington to figure out a long-term solution, and not just one more quick fix, to the Medicare payment formula problem that is contributing to the departure of so many doctors from Medicare.

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Where do you stand on this issue? Do doctors leaving Medicare have a legitimate reason for doing so?

Congress is making moves to fix doctors’ Medicare pay; check out our link.

Also, more doctors are accepting Medicare patients; check out this link.