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Dec 20 2012   3:24PM GMT

As cuts to Medicare, reimbursements loom, beneficiaries and providers alike stand to take the hit

Posted by: Jenny Laurello
AAFP, ACO, AMA, American Medical Association, doc fix, EHR, EHR Adoption, Medicare, Medicare reimbursement, SGR

It’s hard to turn on the radio or television, or open a web browser or app, without being inundated with a barrage of information on all things “fiscal cliff” stalemate, and rightfully so. Whether highlighting the trillions in tax increases on the table, or focusing on the hard-to-swallow $400 billion in potential cuts to entitlement programs, it’s enough to truly make one’s head spin.

But what if you are a chronic care patient on the cusp of Medicare eligibility, counting on the program as your primary means of care? Or a primary care physician running a small, private practice servicing a large population of Medicare beneficiaries?  It goes from a head spin to a tail spin very fast.

Entitlement gouging would mean a $14 billion reduction in Medicare payments to doctors in 2013 alone, all resting on Congress’ ability to find a solution — via a “doc fix” stopgap measure, which has been enacted each year over the past decade — by mid-January. The looming 27% reimbursement rate cuts also stand to further impact providers’ abilities to comply with additional federal mandates and move forward with large scale, capital intensive projects, such as electronic health record (EHR) implementation and ICD-10 migration.

The Obama administration’s latest fiscal cliff aversion offer to U.S. House Speaker John Boehner and Republicans in Congress includes a repeal of Medicare’s sustainable growth rate (SGR) formula, otherwise triggering the 26.5% cuts on January 1, 2013, if no action is taken to reverse it.

Not wanting to put all the reimbursement eggs in a doc fix basket, the week before Christmas both the Obama administration and the American Medical Association put out an official warning to physicians to start preparing for the payment cuts, with the AMA stating that “we feel compelled to advise physicians to start making plans for steps they can take to mitigate this disruption and meet their own financial obligations in January, in case the 26.5% cut actually takes effect.”

“Given the potential impact on practice revenue in early January, physicians should be certain adequate arrangements are in place to sustain their practices,” the AMA continued in its statement. “For those physicians who are forced into the untenable position of limiting their involvement with the Medicare program because it threatens the viability of their practices, we urge that patients be notified promptly so that they, too, can explore other options to seek health care and medical treatment.”

As if the potential Medicare reimbursement slashes weren’t enough to make physicians run for the hills, add in the additional requirements imposed by trying to better coordinate care and service the population through Medicare quality reporting, EHR adoption and meaningful use attestation and the proliferation of ACOs, and as a provider, you’ve got quite a lot on your plate.

The American Academy of Family Physicians estimates physicians participating in both the quality reporting and EHR incentive programs will save $19,000 per physician in avoided penalties and prevent further payment rate reductions of 3.5% — if compliant before the 2015 deadline.  Yet according to last month’s KLAS poll assessing EHR adoption rates and MU readiness, almost half (47%) of participating hospital and health systems said they were only “somewhat confident” in their level of readiness to meet MU requirements (with 36% saying they were “confident”, 4% said they were “not confident at all” and 11% admitting that they “didn’t know what their level of readiness was”).

In terms of maintaining access to quality care for the nation’s costliest population, this is an especially hard pill to swallow, with the “silver tsunami” of incoming beneficiaries standing to double from 40 million to 80 million people in the next 15 years. In addition to the proposed raising of the Medicare eligibility age from 65 to 67 — at a savings of $5.7 billion, according to the Kaiser Family Foundation — potential beneficiaries who were planning on enrolling in Medicare will now face higher premiums and out-of-pocket costs.

One physician running a small urgent care clinic in Arizona paints a sad, yet accurate, picture of the impact of the looming cuts. “It’s the hardest thing as a doctor, a humanitarian, a human being, to watch others hobble in for help that you could give, clutching their plastic bags, and know that you can’t give them what they need. Providing what they need would lead to your own financial demise, and the lights in the building would go out.”

Financial demise or no longer servicing the Medicare population? If these are the only options that clinicians face, it’s sure to be one un-Merry Christmas for physicians, beneficiaries and Congress alike.

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