Uncertainty over Medicare pay rates likely to continue

The long-running uncertainty over the future of your Medicare reimbursements isn’t likely to end anytime soon.

The Sustainable Growth Rate (SGR) formula calls for a 29.5% cut in Medicare pay rates in 2012, and while Congress almost certainly won’t cut reimbursements that drastically when it takes up the issue this fall, no one knows if pay rates will be increased, cut, or maintained at their present levels.

That is a hardship for primary care physicians with a large percentage of patients on Medicare, says Roland Goertz, MD, president of the American Academy of Family Physicians. "The uncertainty is probably more important than anything else," he says.

In its annual report to Congress, the Medicare Payment Advisory Commission (MedPAC) recommends a 1% increase in Medicare payment rates for 2012. Congress is not bound by the report, but typically uses it as a starting point in its annual struggle with SGR.

“A main flaw of the SGR is its blunt approach: In setting across-the-board updates to Medicare’s physician fee schedule, the system neither rewards individual providers who restrain unnecessary volume growth nor penalizes those who contribute most to volume increases,” the report states. “Also, the SGR does little to counter the volume incentives that are inherent in [fee-for-service] payments.”

Access to primary care physicians is adequate, the report states, adding that a 1% hike in Medicare rates would be enough to continue adequate access, but still maintain enough financial incentive to keep costs down and pressure lawmakers into reforming a system that everyone agrees is flawed, but no one seems willing to fix.

Neil Kirschner, senior associate in regulatory and insurer affairs for the American College of Physicians, says he was happy to see MedPAC's report criticize SGR. “Access is there, but we're hearing more rumbles from doctors," says Kirschner.

AAFP research finds fewer doctors willing to take on new Medicare patients, says Goertz, a trend that is likely to continue as long as uncertainty over Medicare reimbursement rates does.

See the MedPAC report here: http://www.medpac.gov/documents/Mar11_EntireReport.pdf