As of tomorrow, March 1st, 2010, Medicare will be cutting physician reimbursement by 21%.
The Center for Medicare and Medicaid Services (CMS) relies on a flawed payment system that is based on an outdated formula, called the SGR - the Sustainable Growth Rate.
As a result of the reliance on this formula, nearly every year, CMS schedules reimbursement cuts to doctors.Despite rising costs to run a doctor's office.
Despite increasing malpractice insurance premiums.
Despite more demands on physicians' time.
Many of the cuts are narrowly averted when Congress steps in at the eleventh hour and repeals a cut temporarily to avoid having to deal with the larger issue, the SGR. But no Congress save happened this time... the House of Representatives was able to pass a 30-day extension, but the bill died in the Senate. So the cut looks like it will happen.
To understand why a 21% payment cut is so damaging to the physician workforce, let's put things in a larger perspective. Over the ten years from 1997 to 2007:
Automobile prices have increased 25%.
Home prices have increased 81%.
College Tuition costs have increased 55%.
Reimbursement to a neurosurgeon for performing a laminectomy has decreased by 28%.
Now for the really bad news. Many physicians are saying "enough is enough". While there may not be much an individual physician can do about the SGR, he/she can begin to limit their practice. This translates into many physicians seeing less Medicare patients. In a recent survey conducted by the American Association of Neurological Surgeons (AANS), the Council of State Neurosurgical Societies (CSNS), and the Congress of Neurological Surgeons (CNS), the results indicate a very disturbing trend.
Nearly 40% of respondents indicated that if Medicare payments continue to decline, they will decrease the number of Medicare patients they see, and over 18% will stop seeing Medicare patients altogether.
This is very unfortunate for the nation's elderly, many of whom rely heavily on their physicians on a daily basis.
I, for one, would like to see everyone who needs healthcare have the resources and abilities to obtain it. I became a doctor to help others and I would love to function in a system that facilitates it. But I cannot stand behind a system that squeezes doctors and hospitals to the point that they can no longer uphold their oaths to serve. Let's get rid of the SGR, and let us docs do our jobs without the vise-like reimbursement pressure.

