Medicare Payment Cut Threatens Stability of Health Care

New AAFP Survey Documents Likely Impact of Pending Reduction

November 22, 2010 03:00 pm News Staff

More than one in 10 family physicians would consider closing their practices if Congress fails to block a 23 percent reduction in the Medicare physician payment rate scheduled to take effect on Dec. 1. That's according to an AAFP survey conducted as part of a broader media campaign about the sustainable growth rate, or SGR, formula that launched on Nov. 22.

In September, the AAFP asked 516 family physicians with ownership stakes in their practices about the effect a pending 23 percent Medicare payment reduction would have on their practices. Nearly 13 percent of respondents said they would stop providing patient care if the cut is enacted.

Without congressional action, the payment reduction will climb to nearly 25 percent on Jan. 1.

"This survey demonstrates the serious threat to Americans' access to health care that is posed by the current formula for paying physicians to care for the elderly and disabled," said AAFP President Roland Goertz, M.D., M.B.A., of Waco, Texas, in a prepared statement. "You can imagine how many more physicians will be forced to close their doors if a 25 percent or even bigger pay cut goes into effect next year. If you ran a business and knew that up to 30 percent of your customers were going to reduce your payment by 25 percent or more, what would your business do?"

Medicare patients comprise as much as 30 percent of family physicians' patient population, and more than one in four patients in rural family physician practices depend on Medicare for coverage, according to AAFP membership data.

[Graph showing findings from a 2010 survey of AAFP members  on the fallout of a potential cut in Medicare payment to physicians]

The survey found that among family physicians with ownership stakes in their practices, about 62 percent said they may be forced to stop accepting new Medicare patients, and 73 percent said they would have to limit the number of Medicare appointments because of the looming pay cut. More than 40 percent, meanwhile, said they would have to defer purchase of information technology, and about 38 percent said they would have to reduce staff.

"Medicare cuts would destroy my practice of geriatric medicine," said one survey respondent.

Another said, "We are now closed to new Medicare patients since July 1, when the last congressional showdown failed to produce a timely solution to Medicare payments to physicians. We can no longer rely on a payment partner that cannot reliably hold up their end of the deal. No business can survive with unreliable partners. I have no idea where new Medicare patients will go."

The survey results have particular relevance for elderly and disabled Americans who depend on Medicare for their health care coverage and for military families who depend on TRICARE, whose rates are tied to Medicare rates, according to Goertz. He referred to a recent AARP survey( showing that 81 percent of AARP members who receive Medicare and 86 percent of members not yet eligible for Medicare are concerned about the effect of the Medicare physician payment cut on their access to a physician.

"We have reached a point where all patients -- children, their parents and their grandparents -- face the real prospect of losing their doctors," said Goertz. "Medicare -- the program designed to ensure that our elderly have access to health care -- could force the very doctors who care for them out of business. And if that happens, all patients in that community -- regardless of their insurance coverage -- would lose access to needed health care."

As part of the media campaign, Goertz will participate in a radio media tour on Nov. 22 with national and regional media outlets, including Fox News Radio and National Public Radio's "The Health Show." In addition, the AAFP is providing constituent chapters with a press kit of materials to help them publicize the problems with the SGR in their respective states, regions and localities.