Docs: Patients may be hit hardest by 21 percent medicare cut

2010-03-02T06:00:00Z Docs: Patients may be hit hardest by 21 percent medicare cutLynn Taylor Rick Journal staff Rapid City Journal
March 02, 2010 6:00 am  • 

Medicare and Tricare patients may have difficulty finding a family doctor if Congress fails to address a 21-percent cut to Medicare reimbursement rates that took effect Monday, say some local doctors.

"Patients are already having a hard time finding a doctor who will take Medicare ..." said Dr. Ken Diamond, a Rapid City family physician. "This is going to be really catastrophic."

Monday marked the end of a Congressional extension delaying cuts to Medicare reimbursement rates.

The 21-percent cut now in effect is the result of a sustainable growth rate formula enacted in 1997. The SGR is used to set Medicare reimbursement rates for physician care. Tricare is affected by the SGR as well.

Dr. Thomas Dean, a member of the Medicare Payment Advisory Commission and a physician in Wessington Springs, said the SGR formula works by adding total expenditures for physicians annually. If expenditures exceed a set rate, cuts are made to Medicare reimbursements for the following year.

Dean calls the logic behind the SGR formula flawed because it lumps all doctors together. "The incentives that are built into the law are really perverse because if you are conservative physician and really hold down expenses ... you get cut just like the extravagant people," he said. "There's no incentive."

For the past nine years, annual expenditures have exceeded the set rate. But instead of implementing the reimbursement rate cuts for the next year, Congress has delayed them year after year, allowing them to add up.

"It accumulates. That's why we are facing the really Draconian cut of 22 percent," Dean said. "To really fix it has some major budgetary implications now because they've put it off so long."

Three years ago, Congress asked the Medicare Payment Advisory Commission, called MedPAC, to evaluate the SGR law.

"MedPAC was very critical of it," Dean said. MedPAC serves as an advisory board for Congress on Medicare and Medicaid payments.

Dean said MedPAC recommended Congress repeal the SGR formula law or extend the law to all health care providers. Currently, it only affects doctors.

Congress failed to act on the recommendations, Dean said.

"Congress, they understand it's a problem ... But because they have delayed a response, they have dug themselves into a much deeper hole. It's several hundred billion dollars now," he said.

The Centers for Medicare & Medicaid Services, also called CMS, has extended its deadline to doctors beyond March 1 in order to give Congress time to either repeal the law or extend the deadline.

Doctors have until March 17 to choose between remaining a participating Medicare/Tricare physician or become a non-participating doctor. Non-participating providers will see just a 9-percent reimbursement cut, but will be forced to bill patients directly. Patients will be reimbursed directly by Medicare.

Doctors can also choose to stop seeing Medicare or Tricare patients.

If a solution is found by Congress in the next two weeks, it is expected that CMS will cover Medicare/Tricare claims retroactively.

But is a solution within reach?

The House of Representatives passed a 30-day extension on the rate cut last week, but the bill was blocked in the Senate by Sen. Jim Bunning (R-KY), according to the American Medical Association.

The AMA is pushing lawmakers to repeal the formula entirely.

The Senate is expected to reconvene this week to consider a "bill with longer-term extenders," according to the AMA.

Rep. Stephanie Herseth Sandlin (D-SD) released a statement saying, "Now that the House has passed this legislation that would prevent cuts this month in Medicare reimbursement to doctors, I hope that the Senate will be able to overcome the roadblocks that have been put in the way of ensuring continued access to needed health care for South Dakota's seniors."

Sen. Tim Johnson (D-SD) released the following statement regarding the Senate battle. "Congress has consistently acted to prevent scheduled cuts in Medicare reimbursement, and while I am hopeful we will soon pass another extension, I am disappointed one Senator is obstructing action in the Senate. I am also committed to putting in place a more permanent solution that provides stability for patients and our health care professionals in the long run."

Sen. John Thune (R-SD) also responded in part, "Hopefully this is a temporary situation and Congress will act quickly to address this situation," said Thune.

Diamond and Kevin Weiland view Monday's Medicare reimbursement rate decrease as a "catastrophic" event for doctors and patients, especially the Baby Boomer generation.

Family physicians and internists, doctors who carry a heavy Medicare patient load, already struggle with low reimbursement rates, Weiland said. As a result, medical students are turning away from those specialties.

"They cut primary care any more and then they have nobody who will go into primary care," Weiland said.

Weiland said doctors often finish their schooling with $200,000 in loans. Lower-paying specialties such as primary care look far less attractive to them than such specialties as cardiology, where reimbursement rates are higher.

Those decisions leave a void in the primary care area of medicine.

In the Rapid City area, the average age of physicians is 50 years, Weiland said. As doctors near retirement, they are finding fewer people stepping in. "As far as primary care goes, no one is replacing us," he said. "There's no here to fill the void in our community."

For those doctors already practicing, they are being forced to make the hard decisions.

"We are limiting our Medicare patients as we speak," Weiland said. "The bottom line is who's going to be hurt the worst is the Medicare population."

Diamond said Medicare already pays him just 2 percent more than it did in 2001, while his costs have increased by 22 percent. Another 21 percent cut could be devastating. "Any margin on seeing Medicare patients is gone ... I'm probably losing money."

Until something happens in Washington to change the current reimbursement scenario, Diamond and doctors like him cautiously plan for the future.

"Right now, I'll wait to see how things look when the dust settles," Diamond said. "But I'll have to do something to keep my doors open."

Contact Lynn Taylor Rick at 394-8414 or


Copyright 2015 Rapid City Journal. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(13) Comments

  1. Obamadana
    Report Abuse
    Obamadana - March 03, 2010 8:47 am
    Clifford I guess I will have to stand corrected. I was exposed to Agent Orange so I suppose that is why I can still just "Walk" into a VA Facility and get help. But I can't see why the wonderful federally controlled VA healthcare system could turn away any veteran. Combat or non Combat experiance. But I guess the feds have bugs to save and bike trails to build instead.
  2. Clifford
    Report Abuse
    Clifford - March 02, 2010 4:27 pm
    to Obamadana: Your comment “So if they were not commercially insured why were they not in the wonderful federally funded and controlled VA healthcare system.” demands an answer. I retired to this area in 1983 after 23 years of military service with a 10% disability and checked in with VA. Guess what I was told in no uncertain terms ... unless having been exposed to Agent Orange or having a disability of 30% or more, there was no chance for VA Healthcare because the local system was overloaded. I was given a list of possible local medical providers. Consequently I have no use for the VA system. So, good luck “walking into VA today and getting healthcare”. Ain’t gonna happen ...
  3. Hometown
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    Hometown - March 02, 2010 2:50 pm
    Drive by these doc's houses and see where their morals really lie. The number of doctors in South Dakota has increased every year. Medicare cuts just mean health is a privilege to the fortunate, young and the healthy.
  4. Obamadana
    Report Abuse
    Obamadana - March 02, 2010 11:41 am
    archie wrote " In 2008 2,266 U.S. Veterans under the age of 65 died because they were uninsured. That is four times more than those who died in Irag."
    So if they were not commercially insured why were they not in the wonderful federally funded and controlled VA healthcare system? Or are their rules and regulations to tuff to get through for the veterans these days? If I lost my insurance I could walk into the VA today and get healthcare. So what is keeping them out?
  5. Dr Joe
    Report Abuse
    Dr Joe - March 02, 2010 11:16 am
    Obama’s dog and pony show failed by any objective measure. I don’t know his purpose for the meeting unless it was to stage a show then move on with what he, Reid, Pelosi, et al, intended to do anyway – ram government-controlled health care down the throats of an American electorate that doesn’t want it. He half succeeded at that. He staged the show. Now we await the ramming. Obama's color does not even enter the equasion. It is his performance and actions which are in questuion. The measures of Obama’s failure in the show include: 1) The Lib Dems still own the reform 100%. 2) Sweeping health care reform is still a need only in the heads of the Dem Libs. From the outset 80% of us were generally satisfied with our health care. We still are. 3) The Lib Dems still have not arrived at a solid figure on the number of “uninsured.” As I recall Obama used the figure 30M a few days ago. That number has been up, down and sideways for at least a year now. It is fundamental because if you can’t define a problem you cannot solve it. 4) The Dem Libs are still playing the “emergency,” “crisis” cards, long after they wore out those silly canards. Look people, it’s easy. If you are having a heart attack, the only apparent bipartisan thing to happen recently, you don’t call for medical help to come four years or more from now while you write checks for the ambulance, EMT, defibrillator, nitroglycerin pills, etc. Everything is not a crisis or emergency as Obama, Reid, Pelosi and their minions have claimed for over a year now.
  6. Rush Mountmore
    Report Abuse
    Rush Mountmore - March 02, 2010 10:41 am
    Just a comment to "Bing", who said; "Where were people when GW passed the tax cuts for the top earners?"

    This is so typical of those who pay little or no tax at all. They seem to get quite upset when Big Brother does not extort more from their neighbors.
  7. archiejones
    Report Abuse
    archiejones - March 02, 2010 10:01 am
    Dr Joe, just what parts of the pubs plan do you think are better? Is it the part that would not ban insurance companies from denying coverage for pre-existing conditions? Or is it the part that would not restrict how much the insurance companies can raise their rates, at will? Maybe it is the pubs proposal to only cover about 3 million uninsured people vs. the democrats plan to cover 30 million uninsured people? Or could it be the pubs plan to allow insurance to be bought over state lines which the CBO has determined may save money for the people who are currently healthy but would increase costs for people who are older or people who already have a illness or disability? The pubs ideas are nothing more than political points and self seeking sulking because they lost the election to someone other than a 'white' male and they simply cannot accept it and get over it. All they have done is to continue to distort the facts, creating their own, and coming up with ideological points that are not practical. This posture, coupled with their last attempts at "improving healthcare" such as Medicare Advantage Plans and Medicare D prescription drug plans, which are a "private sector thing, just gives the pubs no credibility.

    And now look what the party of "NO" is doing through Senator Bunning (R-KY), what a joke!
  8. Bing
    Report Abuse
    Bing - March 02, 2010 9:58 am
    What people don't understand is that so called 'death panels' are alive and well today. People of all ages are already receiving 'rationed' health care. Moral of the story now is if you have money you have better health care. If you don't have money you better hope health care providers provide your health care for free. Better rationed health care then no health care at all.
  9. Bing
    Report Abuse
    Bing - March 02, 2010 8:18 am
    Where were people when GW passed the tax cuts for the top earners? Through the so called 'nuclear option'? TWICE! Well you should have been telling him that the idea of lowering taxes would in fact not raise more revenue for medicare and other programs. Blaming the reimbursement rates since 2001 is in no way Obamas fault. How about a little blame toward the industry that isn't hurting. I hear about MD's hurting and people hurting but that's about it.
  10. Obamination
    Report Abuse
    Obamination - March 02, 2010 8:10 am
    And many made fun of Sarah Palin's remark about "death panels." Time will prove if she was right or wrong. Perhaps she should have used the term "rationing of health care to weed out the elderly." This hope and change thing isn't working very well for the citizens of this nation.
  11. Dr Joe
    Report Abuse
    Dr Joe - March 02, 2010 7:09 am
    Do we really want president Obama's take over of our health care with all its two thousand pages of mandated regulations, forcing taxpayers to pay for abortions, soaking our future generations with unbearable taxes and infringing on our lifestyle which we now enjoy back to the dark ages. His plan won't even go into effect now but yes our taxes are to be collected right away. Democrat leaders sent a clear signal they plan to go it alone without the support of many of their own party and the American people. His health care summit was a setup and a photo-op in order to get the Republicans to go in to reconciliation, which is an abuse of Senate rules of which we have never seen before. They plan to go ahead with the nuclear option now so Obama can dictate to the American people his regulatory health care plan we don't want or cannot afford. Republicans offered a much better health care plan but was basically ignored. President Obama and his bureaucrats are trying to steal our freedom to the point where we will not be a free nation anymore and completely ignores our written constitution Remember this is how other countries lost their freedom and should be a warning to all Americans to resist it or suffer the consequences of a nation who lost their freedom due to the actions of one man and his left wing supporters.
  12. Rush Mountmore
    Report Abuse
    Rush Mountmore - March 02, 2010 6:46 am
    We old folks are just living too long, but Obamacare should fix that. How many thought Obama misspoke when he said maybe we just needed to learn to "take a pill".
  13. ZAR
    Report Abuse
    ZAR - March 02, 2010 6:27 am
    There is huge bipartisan support to repeal this moronic bill.
    Even if it doesn't get repealed because of one senators blockage then OBAMA has vowed to veto it. Why isn't this in this article?
    It is funny to see Thune whining about his "PARTY OF NO" stopping legislation thru the threat of a filibuster. But since 2008 the senate has been virtually shut down because of it. We are not just talking huge spending bills here, they have threatened a filibuster on every piece of legislation whether or not it was put forth by dems or republicans. Very sad state of affairs here folks, having a philosophical debate is one thing but stopping legislation just for talking points and pure politics is BS, and we all should agree on that!
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