Are Doctors Really Accepting More Medicare Patients?

A Department of Health and Human Services study boasts as much, but may have missed the point.
By @FrederickReese |
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    It is often said that a study is only as good as the questions it seeks to answer. A recent study has given reason to test that adage. An August brief from the U.S. Department of Health & Human Services (HHS) Office of the Assistant Secretary for Planning and Evaluation announced that from 2005 to 2012, the percentage of physicians accepting new Medicare patients has increased, from 87.9 percent in 2005 to 90.7 percent in 2012.

    According to the Centers for Medicare and Medicaid Services (CMS), approximately 650,000 physicians participated in the Medicare program in 2011, with nearly 1 million participating providers — which includes nurse practitioners, midwives and other non-physician providers — participating in the program. In 2012, fewer physicians accepted new patients with private insurance than new patients on Medicare.

    According to the government’s reporting, the number of physicians that agreed to accept Medicare rose by nearly 30,000 from 2012 to 2013. “These findings allay concern that the number of physicians ‘opting out’ of Medicare has increased in recent years,” the brief reported. It continued:

    Physicians may opt out of the Medicare program for two years and establish written contracts with Medicare beneficiaries. Under these private contracts, beneficiaries are liable for payment of the care furnished. If a Medicare beneficiary receives services from a physician who has ‘opted out’, the beneficiary can pay the physician directly, but neither the physician nor the beneficiary receives any payment from Medicare. A 2005 study examining characteristics of providers opting out of Medicare found that overall less than one percent of providers eligible to opt out of Medicare did so, and the two specialties with the highest opt out percentages were psychiatrists (with 1.11% opting out) and plastic and reconstructive surgeons (with 1.56% opting out). In contrast, about a third of one percent of primary care physicians (0.35%) opted out of Medicare.


    Changing the way Medicare pays out

    This report comes at a time that Congress is considering changing the rules on how doctors are paid under Medicare. A bill, H.R. 2810, has unanimously cleared the House Energy and Commerce Committee, repealing the sustainable growth rate formula (SGR). The SGR was a control rod on Medicare spending, introduced under the 1997 Balanced Budget Act to replace the former control rod, the Medicare Volume Performance Standard. In its most basic analysis, the SGR limited the yearly increase per beneficiary’s expenses to no more than the yearly growth in the national gross domestic product.

    The CMS would set a target SGR for providers to meet. If the provider’s SGR is less than the target, the difference rolls over to the next year. But if the provider’s SGR is more than the target, the difference is taken from next year’s payments. As can be expected, most Medicare providers didn’t care for this. The reality of SGR is that on a yearly basis, providers saw cuts to their Medicare reimbursements, leading many to threaten leaving the program.

    The new program, the Quality Update Incentive Program, bases the provider’s reimbursement rate directly on how healthy they keep their patients. The fewer calls for cost-extensive medical procedures the doctor makes for his or her patient, the more he or she receives in reimbursements.

    “Since its passage in 1997, SGR has bred uncertainty and frustration,” said Energy and Commerce Chairman Rep. Fred Upton (R-Mich.) during the panel’s consideration of the bill. “Doctors have been forced to endure eleventh-hour fixes, sometimes on a monthly basis, which clearly have stymied physicians’ abilities to run their practices.”

    These “doc fixes” to correct the damage done by SGR cuts have become an annual headache for both Congress and the medical community.

    “Over the last 10 years we’ve spent about $146 billion on patches and patches and patches,” said Ardis Hoven, president of the American Medical Association. “We lived through 2010,” she explained, when Congress had to avert cuts on a monthly basis for part of the year. “People can’t run practices like that. They can’t budget; they can’t plan; they can’t do anything. And it was very destabilizing.”


    “The halo effect”

    In this lies the problem with the HHS survey. Analytical data has shown that doctors and providers rarely follow through with the threat of denying new patients. According to CMS, only about 9,500 providers have opted out of Medicare. This, however, doesn’t address the numbers of providers that denied care to their own patients.


    In April, the CMS issued a letter of condemnation to the Rawson-Neal Psychiatric Hospital in Nevada regarding the hospital’s flagrant violations of Medicare rules on the discharge of patients. It turned out that Rawson-Neal, as well as other hospitals throughout Nevada, discharged mentally ill patients after a mandatory 72-hour observation period, gave them an one-way bus ticket out of Nevada without making arrangement for their receipt upon arrival — with only enough medication and food for the trip and with directions to call emergency services upon leaving the bus station.

    This reflected the Nevada’s cuts in funding to mental health services. Since 2007, more than $80 million in cuts have been passed through the state legislature. In total, 364 staff positions were lost in the state’s mental health division between 2007 and 2011, while the number of psychiatric patient beds decreased from 234 to 190.

    Now emergency rooms in southern Nevada are seeing an atypical number of mentally ill patients — enough to prompt Clark County to declare a public health emergency.

    “People have been advised for decades that if you really want social services, you should go to California,” said former state Sen. Sheila Leslie, who advocated for more mental health funding during her time at the legislature. “That is not new. … It’s the Nevadan way. It’s just not a surprise to anybody that this finally came out.”

    This phenomenon, known as “patient-dumping,” represents a real and disturbing factor in Medicare spending in the entire country. In 2012, eight major medical care providers were cited by HHS for patient-dumping, which is a fineable offense under the Emergency Medical Treatment and Active Labor Act. Thus far in 2013, there have been seven major cases. While it is not known if this represents a true deviation from the report’s finding because it relied on self-reporting, it begs the question of the “halo effect.”

    The “halo effect” is the knowing bias in self-reporting toward making oneself look good. As a person is less likely to be critical of his or herself or to reveal potential self-incriminating information, it makes studies like the HHS report more vulnerable to subjective biases.

    The fine reality in this is simple, however. Almost every senior citizen in the United States has Medicare and 48 percent use it as their primary form of health insurance. It is important, in discussions such as the one the HHS started with its report, to ask the right questions. Only then can the true problems be determined.

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