The Upcoming Medicare Reimbursement Decision: What Will You Do?

As we draw closer to the end of yet another passing year, unfortunately the story remains the same. I finished my residency in 2003 and can remember reading about the looming reimbursement decline proposed by the flawed SGR formula.

Year after year, the same Medicare reimbursement problem persists, yet our lawmakers have neglected to mend the flawed SGR formula. Rather than to correct the problem, the Congress has only placed a temporary short term fix. Now that 2011 is drawing to the end, the story yet again remains the same. Some years have seen a small one percent increase, however the past few years have essentially kept the reimbursements static without a decline being observed.

Our economic woes are essentially unchanged from last year. Physicians now find themselves faced with the difficult choice of deciding whether or not to continue accepting the flat reimbursements from CMS or to withdraw from the program altogether. The problem with the flat reimbursements is that our costs of maintaining a practice increase annually. Medical supply costs increase, insurance costs increase, and employees must be given routine raises in order to be retained. For my solo practice in the rural south, withdrawing from Medicare would be a very difficult decision to make. I have a large panel of Medicare patients who depend on me for their care. However, the perception of physicians by the general population is that we are all independently wealthy and we should be able to tolerate a decline in reimbursements for the good of the national economy.

The proposed payment reduction for 2012 is a 27 percent decrease. For those of us in private practice this reimbursement decrease will be disastrous. Unfortunately, I have already begun making preparations for this payment decrease. My practice has been receiving a large increase in new patient applications due to another physician's upcoming retirement. At this point, all new patients with Medicare are being placed on hold until a decision regarding our reimbursements has been determined by the Congress. If the reimbursement decrease is allowed to take place, I will be unable to accept any new Medicare patients.

My existing Medicare patients have been asking me what I plan to do for the past several weeks now. My answer to them is that I will not ever completely withdraw from Medicare and will never withdraw as their treating physician. I have been in private practice for more than eight years now and a very large percentage of my Medicare patients have been with me since my first year in practice. However, my answer to them is that I will not be able to take on new Medicare patients if the decrease in reimbursements does come to pass.

Being both a practicing physician and head of a business is very complex. As physicians, we long to be able to treat our patients and not discriminate regarding payment status. However, running a business (private practice) requires that we pay attention to the bottom line so that we can not only pay our staff and our bills, but pay ourselves at the same time. There are several undecided decisions regarding medicine's future. Most notably the upcoming Supreme Court case of determining whether or not the Affordable Care Act is constitutional will have a very large impact. Further, the upcoming presidential election will also have a large emphasis on economics and healthcare in general. We do not know the outcome, however we still have the job of caring for our patients at hand. Until that time, we must make the best decisions not only for our patients but for our medical practice as well.

Find out more about J. Scott Litton, Jr., MD and our other Practice Notes bloggers.