We're Leaving Medicare to Save Our Practice

Some family doctors say they're staying in Medicare and accepting new Medicare patients because, philosophically, it's the right thing to do. But after participating in Medicare for several years, I've developed a different perspective. I think keeping my practice open is the right thing to do -- for my community, as well as for me. Unfortunately, my practice may fold if we stay in Medicare.

I practice in Florida with another family physician. We're exactly what most family physicians used to be -- small-business owners in an independent practice.

We stopped accepting new Medicare patients this past January, a gut-wrenching but necessary step. We plan to stop participating in Medicare by the end of this year or the next, and we're likely to opt out of Medicare altogether.

Here's why.

Although the AAFP threw its support behind the recently passed health reform bill, I think the bill was ill-conceived in many ways. The biggest tragedy is that the bill didn't eliminate Medicare's sustainable growth rate, or SGR, formula and institute a new formula to create payment stability.

Physicians have been playing Russian roulette with the SGR for years. Before this year, Congress always stepped in to stop SGR-dictated cuts before they started. Even so, Medicare payments became increasingly inadequate, making it hard to keep a practice solvent, much less to make changes to become a patient-centered medical home.

This year has been even worse. Congress allowed the disastrous 21.3 percent pay cut to go into effect June 1, finally rescinding it a few weeks later and giving us a 2.2 percent increase -- but only until Nov. 30. Have you noticed that Nov. 30 is after the next election? How convenient for Congress!

If Congress lets the 21.3 percent pay cut return after Nov. 30, it will be the death knell for many practices. The typical primary care practice has 60 percent overhead, so there's 40 cents on the dollar to take home at the end of the day. The 21.3 percent pay cut would take away about 20 cents of those 40 cents. I don't know any doctor who can absorb a 50 percent decrease in income and not face some unanswerable repercussions.

Congress might instead continue the 2.2 percent increase after Nov. 30, but Medicare pay still would be inadequate.

Some help will come from the new health reform law, which provides a 10 percent primary care bonus beginning in 2011. Unfortunately, the bonus is only for those who meet certain requirements, only for certain types of claims and only for five years. Furthermore, a 10 percent bonus on top of the possible 21.3 percent pay cut would still equal a disaster, just not of such epic proportions.

The bottom line is that legislators need to step up and push payment reform through, but I'm not optimistic, given their track record.

Medicare's penchant for making unilateral changes -- and not for the better -- is another reason why we're getting out of Medicare as soon as we can.

Here's a perfect example. A few years ago, we decided to offer stress tests to detect heart disease. Since we didn't have all the equipment, we and several other doctors rented space in an existing facility and went there once a week to perform the tests.

But Medicare changed the rules so that this violated the Stark laws. Instead, the facility had to buy mobile equipment, and the technicians had to lug it to our office once a week.

Last January, Medicare changed its rules again. Since the technicians weren't our full-time employees, Medicare decreed that their costs had to be passed through with no profit to us -- and we couldn't charge for office space or other costs. We would lose money on every single test. Therefore, the most profitable thing we did with our treadmill in recent months was to sell it. Unfortunately, all of the technicians were out of a job.

Medicare didn't change the rules because of quality concerns. They did it under the guise of eliminating fraud and waste, but I think they changed the rules because they were spending too much money on stress tests. In a discreet form of rationing, we have lost our best way to detect the leading cause of death in the nation. Our practice won't continue in a system that mandates what we can and can't do in the exam room for strictly financial reasons.

There are many other frustrating aspects of Medicare involvement, ranging from the silly bullet points we need in our charts to keep from being audited to the numerous pages of regulations (276-page PDF; About PDFs) we must wade through to learn how to qualify for "meaningful use" incentives. I can't wait to be done with it all!

As we reduce our Medicare involvement, we are working to shore up our practice with more commercial payers. We hope to get Medicare to a low enough percentage of our patient base that we won't go out of business if we stop taking Medicare entirely.

However, since all insurers eventually follow Medicare, the problems with Medicare will still haunt us. The only sure way to get out of Medicare's shadow is to stop relying on third-party payers altogether. I frankly think that might be necessary for family medicine to survive.

Millions of formerly uninsured people will need access to family physicians as the provisions of the health reform law go into effect. What will America do if most of our practices go broke and close in the face of this need? I hope other family physicians will consider getting out from under Medicare as we are. If our practice in Florida can do it and survive, maybe your practice can, too.

Lee Gross, M.D., is a practicing family physician in North Port, Fla.