brand logo

Am Fam Physician. 2008;77(12):1738

A convergence of three policies could reduce physician Medicare payments by 14.9 to 22.3 percent in 2008, which could jeopardize access for Medicare beneficiaries in underserved areas. Congress and the Executive Branch should coordinate their roles in setting Medicare payment policy, because their overlapping decisions can have additive impact.

It is well known that Medicare Part B payments are slated for a 10.6 percent reduction in the summer of 2008 unless Congress intervenes. Two lesser known policies threaten to reduce physician payments at nearly the same time. The Health Resources and Services Administration proposed a rule in early 2008 that overhauls the process for designating Medically Underserved Areas and primary care Health Professional Shortage Areas (HPSAs).1 Preliminary analysis suggests that 605 HPSAs (32 million persons and 23,805 primary care physicians) may lose designation.2 Physicians working in de-designated geographic HPSAs would lose the 10 percent Medicare bonus (see accompanying table) associated with work in those areas. Medicare Physician Scarcity Areas (PSAs) offer a payment bonus of 5 percent and are slated to expire in the summer of 2008, affecting more than 25,000 physicians and millions of Medicare beneficiaries.3 The convergence of all three policies, faced by physicians working in combined HPSAs-PSAs—some of the most underserved areas—would result in Medicare payment cuts of 22.3 percent in one year.35

Before its expiration, the PSA incentive payment deserves evaluation, as mandated by Congress. The proposed HPSA regulations may offer bonus payments to more physicians, overall, but many urban areas (with underserved populations not adequately assessed by the proposed method) may be de-designated.

Designation areaPayment loss (with −10.6%)Medicare beneficiariesPrimary care physiciansFamily physicians
PSA−5% (−14.9%)7,539,65924,71913,031
Geographic HPSA−10% (−18.5%)556,1223,8291,453
Geographic HPSA and PSA−15% (−22.3%)239,272913507

This ‘Perfect Storm’ of reimbursement loss for providers in underserved areas may severely compromise physician access if it makes working in these areas unattractive or financially impossible. No policy-making body oversees all three payment proposals; policy makers should consider their convergence and find options to maintain access to a personal physician for persons living in these areas.

Continue Reading

More in AFP

More in Pubmed

Copyright © 2008 by the American Academy of Family Physicians.

This content is owned by the AAFP. A person viewing it online may make one printout of the material and may use that printout only for his or her personal, non-commercial reference. This material may not otherwise be downloaded, copied, printed, stored, transmitted or reproduced in any medium, whether now known or later invented, except as authorized in writing by the AAFP.  See permissions for copyright questions and/or permission requests.