I just read the following article on Forbes, by a highly-respected scholar, and just had to post it in its entirety, as It's that important for all our physician clients and clients-to-be:
Doctors seeing Medicare patients face a 24 percent cut in reimbursements beginning January 1. But almost no one has grasped that those cuts will hit Medicaid too—thanks to Obamacare. Unless Congress acts, we’re likely to see a huge exodus of doctors who will not accept either Medicare or Medicaid patients.
In 1997 Congress passed legislation, known as the “sustainable growth rate” (SGR), to try and reduce Medicare spending. If Medicare spending grew faster than a predetermined amount, doctors’ Medicare reimbursements would be cut the next year by enough to offset the overspending.
Not surprisingly, Medicare spending didn’t hit the target rate, and, again not surprisingly, Congress didn’t want doctors to take the financial hit. So Congress has passed legislation, known as the “Doc Fix,” multiple times to postpone the cuts and keep the reimbursement levels roughly the same.
But those postponed deficits keep piling up, and come January doctors will see, on average, a 24 percent cut in Medicare reimbursement levels. And here comes the double whammy: Medicaid reimbursements will face the same 24 percent cut.
Medicaid pays doctors about 59 percent of what Medicare pays them—which is why doctors increasingly refuse to take new Medicaid patients. As I pointed out last week, the Centers for Medicare and Medicaid Services (CMS) recently released a document showing that 9,500 doctors who had previously accepted Medicaid patients refused to do so in 2012.
In an effort to gain—some might say “buy”—physician support for Obamacare, drafters required Medicaid programs to pay doctors the same rate as Medicare for 2013 and 2014—and that’s all states, not just the ones expanding Medicaid. (I am told that some states have yet to pay the additional 2013 Medicaid reimbursements, claiming they will do that retroactively in 2014.) So if Congress doesn’t pass a Doc Fix and Medicare rates go down by 24 percent, then so will Medicaid.
Together both programs cover more than 100 million Americans, and the government expects about 9 million more people to join Medicaid next year. More people wanting care and lower reimbursements for seeing them.
The cuts are just one more slap in the face to doctors trying to provide care to patients with government-provided, price-controlled health insurance.
Congress will likely find a way to postpone the 24 Medicare percent cut, as it has done repeatedly—making seniors mad is not good for reelection. But the fix is expensive. The Congressional Budget Office recently estimated that a 10-year fix will cost about $140 billion. That’s a lot of money in tight budget times, especially since the budget will get even tighter next year because the sequester cuts an additional $109 billion in spending.
Budget negotiators from the House and Senate have been quietly discussing the challenges they face coming up with a budget. Democrats are eager to change or eliminate the sequester, but many conservative Republicans have come to see it as an effective, albeit blunt, tool for controlling federal spending under a president who refuses to do so.
Congress may come up with just a one-year—or even six-month—solution to keep Medicare rates, and hence Medicaid rates, the same. But even that may be difficult given the budget, and the 24 percent cut saves the government money.
Members of Congress might conclude this time that since defense and several other important federal programs are taking a financial hit, why should doctors get a pass? After all the American Medical Association has supported the Affordable Care Act all along, though occasionally it raises some tepid objections.
It’s yet another unforeseen consequence of Obamacare, which Democrats thought would be so popular that it would ensure Democratic control of Congress and the White House for years to come.
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. http://twitter.com/MerrillMatthews.
Doctors seeing Medicare patients face a 24 percent cut in reimbursements beginning January 1. But almost no one has grasped that those cuts will hit Medicaid too—thanks to Obamacare. Unless Congress acts, we’re likely to see a huge exodus of doctors who will not accept either Medicare or Medicaid patients.
In 1997 Congress passed legislation, known as the “sustainable growth rate” (SGR), to try and reduce Medicare spending. If Medicare spending grew faster than a predetermined amount, doctors’ Medicare reimbursements would be cut the next year by enough to offset the overspending.
Not surprisingly, Medicare spending didn’t hit the target rate, and, again not surprisingly, Congress didn’t want doctors to take the financial hit. So Congress has passed legislation, known as the “Doc Fix,” multiple times to postpone the cuts and keep the reimbursement levels roughly the same.
But those postponed deficits keep piling up, and come January doctors will see, on average, a 24 percent cut in Medicare reimbursement levels. And here comes the double whammy: Medicaid reimbursements will face the same 24 percent cut.
Medicaid pays doctors about 59 percent of what Medicare pays them—which is why doctors increasingly refuse to take new Medicaid patients. As I pointed out last week, the Centers for Medicare and Medicaid Services (CMS) recently released a document showing that 9,500 doctors who had previously accepted Medicaid patients refused to do so in 2012.
In an effort to gain—some might say “buy”—physician support for Obamacare, drafters required Medicaid programs to pay doctors the same rate as Medicare for 2013 and 2014—and that’s all states, not just the ones expanding Medicaid. (I am told that some states have yet to pay the additional 2013 Medicaid reimbursements, claiming they will do that retroactively in 2014.) So if Congress doesn’t pass a Doc Fix and Medicare rates go down by 24 percent, then so will Medicaid.
Together both programs cover more than 100 million Americans, and the government expects about 9 million more people to join Medicaid next year. More people wanting care and lower reimbursements for seeing them.
The cuts are just one more slap in the face to doctors trying to provide care to patients with government-provided, price-controlled health insurance.
Congress will likely find a way to postpone the 24 Medicare percent cut, as it has done repeatedly—making seniors mad is not good for reelection. But the fix is expensive. The Congressional Budget Office recently estimated that a 10-year fix will cost about $140 billion. That’s a lot of money in tight budget times, especially since the budget will get even tighter next year because the sequester cuts an additional $109 billion in spending.
Budget negotiators from the House and Senate have been quietly discussing the challenges they face coming up with a budget. Democrats are eager to change or eliminate the sequester, but many conservative Republicans have come to see it as an effective, albeit blunt, tool for controlling federal spending under a president who refuses to do so.
Congress may come up with just a one-year—or even six-month—solution to keep Medicare rates, and hence Medicaid rates, the same. But even that may be difficult given the budget, and the 24 percent cut saves the government money.
Members of Congress might conclude this time that since defense and several other important federal programs are taking a financial hit, why should doctors get a pass? After all the American Medical Association has supported the Affordable Care Act all along, though occasionally it raises some tepid objections.
It’s yet another unforeseen consequence of Obamacare, which Democrats thought would be so popular that it would ensure Democratic control of Congress and the White House for years to come.
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. http://twitter.com/MerrillMatthews.
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