Medicare patients may suffer if country goes over fiscal cliff

Medicare patients are but another segment of the population that have to worry about the country going over the so-called fiscal cliff.

Doctors at Virginia Heart, a practice of 35 physicians in nine Northern Virginia locations, say they might have to turn away new Medicare patients after the first of the year.

That's because a nearly 30% cut across the board in Medicare reimbursement to doctors goes into effect if we go over the cliff. Virginia Heart, the largest cardiovascular group in the Washington Metropolitan area, says its doctors simply cannot afford a 30% decrease in pay.

"The impact of the cliff in the absence of a deal with the president and the Congress could have a devastating impact not only with Virginia Heart, but physicians and their practices across the country," Gregory Corbett, CEO of Virginia Heart, told CNN.  "On January 2nd, if there's no resolution made between the president and Congress, we are going to have to make a decision whether or not we would take new Medicare patients."

Corbett says they will keep all Medicare patients currently on their rolls.  Each year doctors typically see a 2% to 3% reduction in payments - something they're willing to live with, he says.  "If that's what it takes to keep Medicare afloat we can accept that.  We can't accept 30%.  We understand there has to be give-and-take with Medicare reimbursement."

The cuts are triggered by Medicare's sustainable growth Rate (SGR) - a 26.5% mandated pay cut that for years has been postponed by Congress at the last minute, or retroactively soon after it went into effect.  An additional 2% cut is required by the Budget Control Act of 2011.

A December 19 notice on the Centers for Medicare and Medicaid Services (CMS) website warned health care professionals to get prepared.  It states: "The Administration is disappointed that Congress has failed to pass a solution to eliminate the sustainable growth rate (SGR) formula-driven cuts, and has put payments for health care for Medicare beneficiaries at risk.  We continue to urge Congress to take action to ensure these cuts do not take effect.  Given the current progress with the legislation, CMS must take steps to implement the negative update."

Since 2003 doctors have faced cuts in their Medicare payments, but they've never actually happened because eventual deals have always included what has become known as the "doc fix," which reversed any cuts that took effect.  But this year's negotiations look and feel different to Corbett.

"In years past they've resolved this issue by kicking it down the road. We expected that to happen this year but this year appears different," he says. "...There appears to be the absence of willingness to compromise (more) than in past years."

The American College of Physicians (ACP) sent letters to both houses of Congress urging them to prevent the cuts.  In a statement on its website , the ACP says it "continues actively to urge Congress to address this spending cut that has the potential to significantly affect physician participation within the Medicare program, and the ability of Medicare beneficiaries to have access to the high quality care they need and deserve."

ACP has also warned its members to start planning how their practice will respond if the cuts go into effect, saying: "This is a possibility that should be taken seriously. Unlike other times, when Congress either avoided a legislatively-mandated cut or allowed a cut to go into effect and then reversed it before claims were processed, this time may be different. The pending cut is tied up in a larger disagreement on tax and spending priorities, and the new Congress has few legislative days after it convenes in January to take action before the full impact is felt."

Doctors cannot continue to absorb Medicare cuts, says Dr. Warren Levy, chief medical officer at Virginia Heart.

"The great risk is that this will put our Medicare patient population at risk for markedly diminished services," Levy says. "The SGR cut currently at 27.5 % is on top of substantial cuts from the Medicaid program over the past three to four years. This problem has occurred because Congress has not dealt with this issue for many years and has continued to kick the can down the road. There are ways to address reducing health care costs that are based on quality and not across-the-board cuts. We need to use a scalpel, not a machete."

Levy had this warning: "If the cuts actually go through and are not appealed, my practice, as well as every other practice in this country that serves Medicare patients, will need to make substantial cuts in our expenses that will involve reducing services to our patients and likely laying off many of our employees."