Medicare in sick bay

Dr. Greg Reicks, who practices osteopathy at Foresight Family Physicians in Grand Junction, says recent proposed Medicare reimbursement cuts could grow from 21 percent to 40 percent by 2016.


What is Medicare?

Medicare is government-subsidized health care insurance for anyone over age 65, anyone under age 65 with some disabilities, or anyone with permanent kidney failure.

Medicare Part A pays for inpatient hospital stays, and Medicare Part B helps pay for doctor services and outpatient care.

Most Part B recipients pay premiums that are slightly less than $100 a month.

There are 7,012 Medicare recipients in Mesa County, and there were 574,263 Medicare recipients in Colorado in 2008, according to Kaiser Family Foundation.

If it was difficult for Medicare patients to find a primary care physician in Grand Junction before, it may become next to impossible now.

Without action in Congress, Medicare reimbursement rates for physicians will be cut by 21 percent, a cut that is to go into effect Monday.

The U.S. House of Representatives voted late last week to delay it until April 1, but the U.S. Senate broke early for the weekend Friday without acting on it. Senators may take it up again early this week.

Those cuts, if they occur, would create even less incentive for doctors to take on new Medicare patients, as reimbursement rates for Medicare patients are at least 20 percent to 40 percent lower than private insurances.

“We’re about to hit some real stormy times if we see a 21 percent cut,” said Dale Reigle, chief executive officer of Rocky Mountain Orthopaedic Associates.

“We’re lucky that we’re a fairly large practice and can get through a couple months until senators wake up. Small, one-doctor clinics are already hurting. This is going to make it even worse for them.”

Physicians everywhere for about nine years have chewed their nails each year while Medicare reimbursement rates have been assessed and cuts approved according to a federal formula called the sustainable growth rate.

The rate of cuts is determined partially according to the health of the economy.

Since 2001, the formula has determined that cuts to Medicare reimbursement rates have been needed to make the program work.

However, each year those cuts have been rescinded by Congress. Last December, Congress placed a 60-day halt on cuts in the hope that a solution could be included within a health care reform bill.

While work on the legislation has stalled, the cuts have become due.

The U.S. House has passed a bill that would replace the cuts with a 1.2 percent increase to reimbursements, which would permanently alter the sustainable growth rate formula.

The Senate has signaled its intent to support the bill.


Medicare patients in the Grand Valley have long voiced frustration over finding a primary care physician. Like other areas in the nation, the Grand Valley experiences its share of doctor shortages.

But many practices also must keep a close eye on how many Medicare patients they accept, primarily because the reimbursement rates compared to private insurance are substantially lower.

Accepting too many Medicare patients in a practice could spell financial disaster for physicians, especially those offices with few practicing physicians, doctors say.

Cuts to Medicare reimbursement rates don’t help matters, especially with those cuts increasing.

According to the American Medical Association, if the sustainable growth rate is left unchanged, the proposed 21 percent cut could grow to about 40 percent by 2016.

Dr. Greg Reicks, who practices osteopathy at Foresight Family Physicians, 2503 Foresight Circle, said the 21 percent cut is the largest proposed cut he can recall in recent years.

Reicks said he hasn’t heard of physicians dropping Medicare patients, but he agreed that any incentive to take on those patients would disappear.

Alongside the cuts, costs are increasing for new equipment, medications and operating physicians’ offices.

“The overarching thing that needs to take place is a different payment model,” he said. “Until that happens, this is going to be a problem.”

Reigle has served as the head of Rocky Mountain Orthopaedic Associates, a 16-physician group at 627 25 1/2 Road, for the past 14 years.

Questions surrounding issues such as these kill any sort of future business-expansion plans, he said.

“A medical practice is also a business,” Reigle said. “For us to do planning or hiring, uncertainty is the worst. We’d love to expand our building, but it’s too scary to do that.”

About 30 percent of the practice’s patients are on Medicare, and about half of those Medicare patients have Rocky Mountain Health Plans supplemental insurance, Reigle said. Physician reimbursement rates with the supplemental insurance are nearly equal to that of commercial insurance.

If the cuts were to occur, doctors’ reimbursement rates would be similar to that of 1985, Reigle said.

Even the 1 percent proposed increase puts reimbursement rates at 1995 levels, he said.

When stuck with cuts, physicians go to commercial insurance companies to renegotiate rates. Insurance companies then impose higher premiums to cover the costs.

“It’s a vicious circle,” Reigle said. “This isn’t something that legislators seem to want to fix. All it really does is transfer costs to one group of people to another.”


Reimbursement rates and their effects are just some reasons everyone should be invested in pressing for health care reform, said Dr. Michael Pramenko of Primary Care Partners, 3150 N. 12th St.

Pramenko and other doctors said they feel fairly confident Congress will repeal the cut just as they have in years past, but that it may take a couple months.

However, there is speculation the cut may not be rescinded, just to make the point that the nation’s health care model is in crisis, Pramenko said.

“My main concern is you can’t get doctors interested in reform unless you deal with the SGR (sustainable growth rate),” he said.

These sorts of issues illustrate the problems with current health care policy, Pramenko said.

The low-reimbursements issue fuels discouragement of medical students to consider becoming family physicians, thus a doctor shortage, he said.

After years of schooling, doctors need to make money to pay off large loans, and they expect to earn wages to compensate for their invested time, Pramenko said.

In offering solutions to reforming health care policy, it’s also noteworthy that Club 20, which includes representatives from 20 counties in Western Colorado, has supported the need for an individual mandate. An individual mandate would require each person to purchase health care coverage.

According to a health care plan proposed by the White House, each person must purchase coverage or be required to pay a penalty.

A married couple earning less than $18,700 per year would not have to purchase health insurance, according to the plan.

Republican lawmakers are questioning whether the mandate is constitutional.

The Club 20 stance is significant, Pramenko said, because it signals local residents are eager for reform.


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