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.3–5
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 area||Payment loss (with −10.6%)||Medicare beneficiaries||Primary care physicians||Family physicians|
|Geographic HPSA||−10% (−18.5%)||556,122||3,829||1,453|
|Geographic HPSA and PSA||−15% (−22.3%)||239,272||913||507|
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.