Rheumatologists React to Looming Medicare Payment Reductions

In the midst of flat reimbursement rates and growing expenses, rheumatologists and other physicians are facing yet another potential cut to Medicare reimbursement rates on January 1, 2012: an unimaginable 29.5% across-the-board cut because of the sustainable growth rate (SGR) formula that currently determines reimbursements.

The Medicare Payment Advisory Commission (MedPAC), established by Congress to provide guidance on issues affecting the Medicare program, has approved a recommendation for paying for a permanent SGR repeal. Their plan would repeal the SGR’s annual reductions in Medicare payments and the need for Congress to intervene to avert those cuts. However, in order to pay for the repeal, MedPAC has recommended that Congress freeze reimbursement rates for a small group of primary-care physicians, and cut all other reimbursements, including those for rheumatologists, by 5.9% each year for three years, followed by a freeze in rates. MedPAC’s plan, while arguably well intended, may be just as threatening to physicians’ ability to see Medicare patients as the immediate cut that the SGR would impose.

Another issue of concern is an additional 2% cut to Medicare payments beginning in January 2013 if the congressional “supercommittee” does not come to an agreement on an acceptable package of deficit reduction measures by November 23rd.

It seems obvious these looming cuts, which get larger each year, threaten Medicare patients’ access to care. But what are rheumatologists saying? We asked practicing rheumatologists: “How would the SGR or MedPAC cuts affect you? How would these cuts affect your patients?” Here are some of their responses.

Kelly Weselman, MD, Wellstar Rheumatology,
Sandy Springs, Georgia

“A 29.5% cut to physicians’ pay will have an immediate effect on our ability to see and care for Medicare patients. These patients are generally the sickest and require the most time and resources to care for, due to their multiple comorbidities. In addition, stricter formulary restrictions and more stringent prior-approval processes for Medicare make it even harder to care for this at-risk population. Physicians will simply not be able to provide the necessary care and still run a high-quality medical practice. The proposal by MedPAC to cut specialists 18% over three years is not an acceptable alternative.

“The cost to run a medical practice increases significantly every year. To maintain offices, retain quality staff, and cover employee benefits requires ever increasing resources. In addition, mandated technology services and new required administrative processes chip away at ever tighter office budgets. To think that any rheumatologist can continue to practice with any proposed pay cut is unrealistic. As more providers close to Medicare due to these issues, fewer physicians are left to care for patients with fewer resources. The resulting lack of providers will lead to an increased utilization of emergency and hospital services and an overall increase in the cost of care.”

Herbert S. B. Baraf, MD, Arthritis and Rheumatism
Associates, P.C., Wheaton, Maryland

“The 29.5% SGR reimbursement cut, if it goes through, will be devastating for many practices. Many cognitive practices, like primary care and rheumatology, run overheads in the 70% to 75% range. This cut, plus the additional 2% cut slated if the ‘supercommittee’ cannot reach an agreement on additional budget cuts, would force many practices to take a significant loss in providing patient care. In regions where there are shortages of rheumatologists, I would anticipate physicians closing their practices to new patients covered in the Medicare program as a means of survival.

“The MedPac ‘fix’ is equally unacceptable. Even if rheumatologists were treated in the primary-care category, a freeze over 10 years in reimbursements is unrealistic. The cost of rent, staff, postage, electricity, and IT support will not be frozen. At a time of significant physician shortages, access to care is already threatened nationwide. The SGR and the MedPAC fix flies in the face of reality.”

Cindy Weaver, MD, Rheumatology Associates,
St. Luke’s Hospital, Duluth, Minnesota

“MedPac’s recommendations will have unintended consequences. Many cognitive subspecialties, such as endocrinology, infectious disease, and rheumatology, are very poorly reimbursed and survive only through subsidies from other departments. To further reduce their reimbursement will jeopardize these specialties.

“For instance, in my hometown there were for several years three rheumatologists in two separate groups. One group was employed by a private practice model orthopedic group. The other doctor worked for a multispecialty practice. The orthopedic group decided, from a business standpoint, they could no longer continue to support their rheumatology group. After considerable scrambling and negotiation, these two rheumatologists were able to find employment with their local hospital. But one of the doctors left the city. There is now an eight- to nine-month wait for a new rheumatology patient appointment. If declining reimbursements for these types of specialists continues, I expect this kind of business decision will be repeated time and time again.”

Sharad Lakhanpal, MB, MD, Rheumatology Associates,
Dallas, Texas

“Physicians have the only profession in which professional fee rates are set by the government. Members of Congress also do not often realize that the government is also setting our fees across the board, because many private insurance rates are also based upon Medicare rates.

“Over the last seven to eight years, physician fees have basically been kept the same, without any inflationary or cost-of-living adjustments. This means that, effectively, with the cost of inflation over that time period, in terms of 2004/05 dollars, we have already had a 25% to 28% pay cut. When you are looking at MedPAC’s proposal to cut 18% over three years followed by a freeze, with the cost-of-living allowance this would ultimately be around another 25% cut. So in the end it would be around a 35% to 40% cut over the next eight to 10 years, which will not be tenable.

“If these cuts happen, the biggest impact will be to Medicare patients, who may not have access to quality medicine. Some physicians are not going to see Medicare patients, or they will stop seeing new Medicare patients. Other doctors, who may be thinking of retirement, will go ahead and retire. There is a shortage of doctors already, the population is increasing, baby boomers are hitting the Medicare age, and senior citizens are living longer. This is a challenging scenario. If cuts continue, there will be reduced access to patients and decreased quality of care for patients.”

Taraneh Mehrani, MD, Premier
Medical Group of Mississippi, Pearl, Mississippi

“MedPAC’s proposal to cut specialists 6% each year for three years cumulatively directly impacts access of our aging population to specialized care, in which early detection of rheumatic diseases and treatment is paramount to prevent morbidity, chronic disability, and pain. I’ve noticed only a year into practice here in Mississippi that, due to uncertainty about the SGR, our patients with arthritis and autoimmune conditions are feeling the squeeze as more and more rheumatologists decide to stop seeing new Medicare patients, in a state that is already underserved.

“It is unfortunate that even with the many advances in research with therapies that can manage such chronic conditions, rheumatologists will have to reconsider the viability of providing specialized care, especially if they are close to retirement age. As a newly practicing rheumatologist, I would like to see this field grow rather than see more doors closed.”

Gary Bryant, MD, University of Minnesota,
Minneapolis, Minnesota

“Access to care for both Medicare and other patients is endangered due to the lack of a permanent solution to stabilize reimbursement. A 29.5% automatic cut in reimbursement on January 1, 2012 based on SGR will wreak havoc on practices and access to care for seniors. ACR and ARHP advocates have been both communicating with their Congressional members as well as personally coming to Washington, D.C. two or more times yearly for several years to ask for both a reprieve from repeated upcoming reimbursement cuts based on the flawed SGR formula, as well as a permanent fix to replace SGR with a sustainable and predictable reimbursement formula going forward.

“The flawed SGR formula has led to the inability of physician practices to plan for the future based on a stable reimbursement environment. The MedPAC’s recommendations to Congress regarding specialist reimbursement cuts of 6% per year for three years and then flat reimbursement for an additional seven years is not a viable option as a replacement for the flawed SGR formula. It also threatens access to care for rheumatic disease patients. Providers will not be able to see new and existing Medicare patients, and if rates are adopted by third-party payers, the cuts will impact all patients needing our care.”