While there was a last-minute deal to temporarily avoid the consequences of going over the so-called fiscal cliff, problems with Medicare payments to physicians remain and need to be fixed, health care leaders said.
And looming are even bigger problems that become more acute as state leaders resist health care reform measures, such as expanding Medicaid, they said.
The deal put off for one year a 26.5 percent cut in Medicare payments to physicians that would have been a “massive unsustainable cut” to physician practices, American Medical Association President Jeremy Lazarus said in a statement. It is the 11th year in a row that Congress put off reforming the Medicare payment system to avoid the cuts and thus dealing with the problem, “which is absolutely ridiculous,” said Dr. Jacqueline W. Fincher, governor of the Georgia Chapter of the American College of Physicians and managing partner of McDuffie Medical Associates in Thomson.
“If I did my job like Congress did theirs, my license would be pulled and I would not be allowed to practice medicine,” she said.
The cuts were part of a funding formula put in place by the Balanced Budget Act of 1997 that was intended to limit the growth of Medicare payments to physicians, a move Congress has avoided imposing each time it has come due. Fincher’s national organization has been lobbying Congress to move to a more value-based payment system that better provides for things like care for chronic illnesses – which will increase in the aging population – while making “surgical” cuts to programs that are less of a priority, she said. Congress instead put off the issue for a year, at a cost of $25 billion, according to the nonpartisan Committee for a Responsible Federal Budget. Physicians who treat Medicare patients like Fincher find themselves back in the same boat as previous years, she said.
“It continues to make the path forward in the future a time of uncertainty because every six to 12 months we’ve been facing this (Medicare) cut,” Fincher said.
In putting off the impact of other cuts, it avoids a 2 percent cut in Medicare among other cuts to health care programs, according to the AMA. All of those cuts would amount to about $20 million alone for the clinical system of Georgia Health Sciences University, including a $4 million hit in Medicare physician payments, $1 million less from the National Institutes of Health and $15 million from various other federal programs, according to an analysis from David Hefner, executive vice president for clinical affairs at GHSU.
“Unfortunately in academic medicine, you get it from five different directions at the same time,” he said. “It’s pretty ugly, depending upon which pathway they take.”
That would come on top of $53 million in cuts in state appropriations to the university over the last four years, Hefner said.
Whatever comes out of the negotiations over the next two months or the next year will land on top of troubling trends, particularly for Georgia’s safety net hospitals, some due to unintended consequences of the Patient Protection and Affordable Care Act, he said. Next January, the individual mandate kicks in and the uninsured should be able to obtain coverage, and subsidies for those below 400 percent of the federal poverty level, through state-level Affordable Insurance Exchanges. Georgia is among a number of states that have refused to begin implementing their own exchange, which would force the federal government to set one up for the state. As part of that, extra payments for those hospitals who serve higher numbers of Medicaid and uninsured patients go away, presumably to be made up by a higher number of insured patients. That appears doubtful in the near term for Georgia and could have a catastrophic impact on GHSU’s system, which is counting on between $10 million and $16 million from those payments this year, Hefner said.
“If the (compensation) money goes away and we have no offsets from the federal government because of Georgia’s stance, then we would probably have to shut the doors on the ED(Emergency Department),” he said. “That’s major. Maybe that and we would probably have to stop doing trauma and a few other things.”
Georgia Gov. Nathan Deal is also opposing an expansion of Medicaid under the Affordable Care Act. While the expansion is 100 percent paid by federal funds for the first three years, and would drop to 90 percent by 2020, a Deal spokesman said last year the state cannot afford it nor are there guarantees the federal government will have the money to sustain it.
But because Medicaid expansion was written in as part of the health care reform, it sets up potential problems for low-income people, Fincher said. For instance, a proposed regulation from the U.S. Department of Health and Human Services notes that people are ineligible for the insurance subsidies “to the extent that he or she is eligible for other minimum essential coverage, which includes Medicaid and (the Children’s Health Insurance Program).”
And that is going to be another blow to those vulnerable populations and to those that serve them, Fincher said.
“It is the perfect storm,” she said. “It’s really frustrating because people who really don’t look at the big picture are making decisions standing on ideology and they are going to fiddle while Rome burns.”