Physicians Are Leaving Medicare Because Of “Doc Fix” Process

Threat of Drastic Cuts to Medicare Physician Fees Create Immense Uncertainty for Physicians

Congress Always Suspends the Cuts and Will Do So Again this January – It’s Time to End this Fraud Permanently

Washington, D.C. – “It’s a sad state of affairs when doctors are forced to risk the financial health of their practices just to take on new Medicare patients,” said Dr. David Hogberg, senior fellow at the National Center for Public Policy Research. “But that’s the result of the uncertainty created by threatened cuts to Medicare physician fees.”

In an a new National Policy Analysis paper entitled “To Bring Doctors Back to Medicare, Fix The ‘Doc Fix’,” Dr. Hogberg argues that it is time to end the threat of physician cuts.

Every one to two years, Medicare threatens to drastically cut what it pays physicians. The cuts are the result of a formula known as the Sustainable Growth Rate (SGR). When Medicare physician fees exceed an expenditure target, the SGR is supposed to result in automatic, across-the-board cuts.

“But it’s a fraud,” says Dr. Hogberg. “Congress is unwilling to make the cuts, so it routinely suspends the cuts and replaces them with a one to two percent increase in fees, a process known as the ‘Doc Fix.'”

“Congress will be doing it again come January, when a 25 percent cut in Medicare physician fees is scheduled to take place,” he continued. “Congress will undoubtedly suspend it. But the problem is that this creates uncertainty among physicians. As a result, more and more physicians are limiting their exposure to Medicare. This is a big factor in helping to drive doctors away from Medicare.”

In 2001, about 10 percent of physicians were no longer seeing new Medicare patients. Now it’s 17 percent.

A 2010 American Medical Association survey found that over three-quarters of the physicians who limit the Medicare patients they see cited the “ongoing threat of future payment cut makes Medicare an unreliable payer” as a reason.

The National Policy Analysis paper points to the example of Dr. John Slatosky, a primary care physician in rural North Carolina. In 2007 he stopped seeing new Medicare patients because he worried the government might suddenly and dramatically cut the amount it paid him to treat Medicare patients. It was a decision that bothered him greatly, as now there would be Medicare patients in his area who would have to look for a doctor elsewhere.

“But, in the end, it was better to have a physician here seeing some of the Medicare patients in the area than me losing my business and having no physician here at all,” said Dr. Slatosky.

By 2030, the number of Medicare patients will increase 50 percent above present levels. “We need more physicians taking Medicare patients, not fewer,” notes Dr. Hogberg. “Ending the SGR is a good first step.”

The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, three percent from foundations, and three percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.

Contributions are tax-deductible and greatly appreciated.

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The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than four percent from foundations and less than two percent from corporations. It receives over 350,000 individual contributions a year from over 60,000 active recent contributors.