Remember When Physician Reimbursement was: Medicare + 10%, 20%, 25% … What Happened??

Just the other day I was thinking about what a wise physician told me some 20 years ago “Tom, there are people and groups out there that want to tear down the House of Medicine and hang all the physician’s ”. After 20 years, I guess that Guy Van Sickle, MD, CT State Medical Society (CSMS) prediction is finally coming to pass.

I know that I am showing my age but I remember when Physician reimbursement was not tied to Medicare reimbursement. In those days,  Medicare reimbursement was the lowest (and still is) payer and private payer reimbursement for physician services were plus (+) 10%, 20%, 25% more then the Medicare Rate. I guess we need to ask the Insurers, Regulators and the AMA how this happened.

I have often wondered what the health care financing marketplace would look like today if physicians had aggressively developed their own physician owned and controlled health insurance companies. They could have effectively leveraged the Health Insurer/HMO marketplace creating a much more competitive market then we have today.

I know one thing for sure: the physicians would not be hanging around the financing table waiting for the Insurers and Regulators to throw them their financial scraps. They could have been a major player at the financing table and the physicians would have been the one’s throwing their financial scraps to the Insurers and Regulators. Oh ……. the missed opportunities.
http://www.nytimes.com/2008/06/27/washington/27medicare.html

Doctors Face Payment Cuts for Patients on Medicare

By ROBERT PEAR
Published: June 27, 2008

WASHINGTON — Doctors face a 10 percent cut in Medicare payments next week, following the Senate’s failure on Thursday to take up legislation that would have averted the cuts.

Republican senators blocked efforts by Democrats to call up the bill, which was approved Tuesday in the House by an overwhelming bipartisan vote of 355 to 59.

In the Senate, supporters fell two votes short of the 60 needed to close debate. The vote was 58 to 40.

Senator Charles E. Schumer, Democrat of New York, said, “We have to pass this bill to avoid catastrophic cuts to doctors.”

Dr. Nancy H. Nielsen, president of the American Medical Association, said the cuts would force many doctors to “limit the number of new Medicare patients they treat.”

The bill would cancel the 10 percent cut scheduled to occur on Tuesday and would increase Medicare payments to doctors by 1.1 percent in January.

President Bush had threatened to veto the bill, in part because it would reduce federal payments to private Medicare Advantage plans, offered by insurers like Humana, UnitedHealth and Blue Cross and Blue Shield companies.

The 10 percent cut occurs automatically because of a statutory formula that reduces Medicare payments to doctors when spending would otherwise exceed certain goals.

Senator Mitch McConnell of Kentucky, the Republican leader, said: “We offered to negotiate. We offered to extend current law.” But, Mr. McConnell said, Democrats refused.

Lawmakers are leaving town this week for the Fourth of July holiday. When they return, they could increase doctors’ payments retroactively. But there is no guarantee.

The Senate majority leader, Harry Reid, Democrat of Nevada, said: “Senate Republicans are playing a dangerous game of chicken. The only losers will be Medicare patients, old people.”

Senator John Cornyn, Republican of Texas, said Democrats were scaring doctors and beneficiaries in an effort to score political points.

“We are looking at a partisan proposal,” Mr. Cornyn said. “We are being told that we have to take it or leave it, or the cuts will occur.”

More than 10 million of the 44 million Medicare beneficiaries are in private Medicare Advantage plans. Many of these plans offer extra benefits. But many studies have found that the private plans cost the government more per person than the traditional program.

Senator Richard J. Durbin of Illinois, the Democratic whip, said: “Who supports this bill? Doctors, consumer groups, pharmacists, hospitals. Who opposes this bill? The health insurance industry and the White House.”

But Senator Orrin G. Hatch, Republican of Utah, said the private plans provided a valuable option for retirees, especially in rural areas.

Senator John McCain of Arizona, the presumptive Republican presidential nominee, and Senator Edward M. Kennedy, Democrat of Massachusetts, who is ill, did not vote.