If all the talk about the fiscal cliff makes you edgy, consider the local physicians who have dealt with their own fiscal cliff for 15 years -- and who now fear they may be heading closer than ever to the edge.
Medicine's fiscal cliff goes by the name "sustainable growth rate," or SGR. The term may not be familiar to most people, but it's long been a thorn in the side of doctors who treat Medicare patients -- in other words, nearly everyone in this region with an M.D. or D.O. at the end of their name.
Sustainable growth rate was part of the 1997 Balanced Budget Act, and it ties Medicare's physician payment rates to factors such as overall health care costs, inflation, geographic location and growth of the national economy.
That worked fine for the first five years, but for the last 10 years the SGR equation has consistently called for cuts in those reimbursements, frustrating physicians who say payments already fell short of the actual cost of caring for Medicare patients.
Rajiv Varma, a pediatric neurologist at Children's Hospital and president of the Allegheny County Medical Society, said costs have gone up as new technologies for diagnosing and treating patients have emerged. "We do new things that cost money, and a lot of stuff that used to require an inpatient stay is now being done on an outpatient basis."
Rather than fixing SGR to stay apace with technology and the changing times, Congress has simply blocked the cuts at the last minute -- or, on a few occasions, after the last minute. Besides the havoc and uncertainty those blockages cause for physician practices, freezing rather than fixing the formula further widens the disparity between what payments are and what SGR says they should be.
The next deadline is Jan. 1, after which -- if Congress doesn't intervene -- doctors will face a 26.5 percent cut in Medicare payments.
With Washington focused on that other, better known fiscal cliff, as well as trying to get the federal deficit under control, "the concern is higher this time" that the cuts may come, said C. Richard Schott, a suburban Philadelphia cardiologist and current president of the Pennsylvania Medical Society.
And, to top that off, the more famous fiscal cliff calls for an additional 2 percent reduction in the Medicare pay rate on top of the 26.5 percent. "What business can sustain a 29 percent cut in revenue?" he said.
More importantly for Western Pennsylvania seniors, what impact would those cuts have on access to care?
Dr. Schott said that, this time around, the state medical society is hearing from more physicians across the state inquiring about the process for withdrawing from Medicare. In some cases, they want to know not only about turning away new Medicare patients, but also dropping the ones they have.
"Our recommendation is to give patient at least 30 days' notice," Dr. Schott said.
It's not that physicians want to turn away patients, he said, but the economics may not give them much choice. "Some are already teetering on the edge of solvency."
An additional worry, he added, is that physicians nearing retirement age might simply close their practice rather than have to deal with the reimbursement cuts and regulatory hassles.
While physicians who are employed by a hospital or health system would have some insulation from the cuts, independent physician practices would face tough choices -- if Medicare patients represent 20 to 40 percent of their practice, they probably could continue to see those patients, Dr. Varma said. "But if it's 70 percent, you may not be able to."
It is "just a chaotic situation that physicians have been put in, and we seem to have no control over it," he said. "Everybody agrees it needs to be fixed, and yet it has not been done. We need some action."
Distributed by MCT Information Services
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