DAVID ROSENFELD

AARP volunteers gather at a rally at the Hart Senate Office Building on July 15 as part of the group’s Keep Medicare Fair rally. The drive has led to 1 million messages to Congress urging lawmakers to protect and improve Medicare.

Florida doctors are sick and tired of having to fend off proposed payment cuts under Medicare each year, said Jeff Scott, director of legal and government affairs of the Florida Medical Association.

“It’s absolutely ridiculous that we have to go through this charade each year or every six months and have to come back with our palms out saying please don’t kill us,” Scott said. “There absolutely needs to be a change to the system. It has to be replaced with something that makes sense.”

The frustration Scott felt echoed across the medical community in July as doctors narrowly averted another reimbursement cut, this time by 10.6 percent. Despite the widespread media attention on a contentious vote in Congress to prevent the cuts, the heart of the issue comes down to Medicare’s Sustainable Growth Rate formula, which triggers reimbursement cuts as a way to keep the federal program solvent.

As a result of the SGR formula, Medicare payments to doctors have remained at the same level they were in 2001 despite roughly 20 percent increases in practice costs since that time. By 2015, the formula will reduce physician payments by 40 percent, according to the 2006 Medicare Trustees Report.

Developments in Congress took a dramatic turn over the Fourth of July holiday as the AARP and the American Medical Association, along with their Florida counterparts, launched a media blitz at key Republican Senators who voted to allow the cut to go forward. The proposed bill in question, which eventually passed by an override of a presidential veto, prevented the cut to doctors by instead taking payments away from private Medicare Advantage plans.

Florida Senator Mel Martinez was one of the senators targeted. It apparently worked. Following the Fourth of July recess, Martinez changed his vote on the bill from ‘no’ to ‘yes,’ if not reluctantly.

“The measure we moved forward today does not provide the kind of solution doctors deserve, but this is the only option to stop doctors in Florida from having their pay cut by 10.6 percent,” said a statement issued by Martinez following his ‘yes’ vote. “It is also the only option to ensure that seniors continue to have uninterrupted access to healthcare.”

Martinez agreed that the reimbursement formula is drastically flawed. He predicted that the next proposed reductions would be in the magnitude of 20 percent.

Reducing expenses to Medicare Advantage plans has been a sticking point for Democrats for several years, ever since a series of studies by The Commonwealth Fund, most recently in 2006, reported that private Medicare plans cost the government on average 12.4 percent more than it costs to provide the same services under traditional Medicare. That amounted to $5.2 billion in overpayments in 2005, or $922 per Medicare enrollee.

In Florida, Advantage plans were paid roughly 5.3 percent more than traditional Medicare, according to The Commonwealth Fund in 2006 called The Cost of Privatization. At the time, 20.3 percent of Florida Medicare beneficiaries were enrolled in an Advantage plan.

Despite the extra money going to private Medicare plans, doctors still receive the same reimbursement rate as traditional Medicare regardless of the type of plan in which their patients are enrolled.

“One has to wonder where that money goes,” Scott said. “I know it isn’t going to doctors.”

David Bruns, communications manager of AARP Florida, acknowledged there are some benefits to Medicare Advantage plans. He said, however, that the issue came down to balance. Such a proposed cut to doctors would undoubtedly force many physicians to limit the number of Medicare patients they cared for and therefore reduce access to seniors.

“If you’re faced with the choice of reducing access to care and raise premiums, or reduce funding to Advantage plans, we think that’s a pretty easy choice,” Bruns said.

Jim Bracher, executive vice president of the Florida Association of Health Plans, defended the Medicare Advantage plans, most notably run nationwide by Humana, WellPoint and Aetna.

“Advantage plans are clearly offering more services than seniors receive from traditional Medicare,” Bracher said. “That part is clear.”

Private plans play a vital role whether under Medicare or Medicaid, Bracher said, in that the government knows a capitation rate for services will maintain costs below a certain amount unlike fee-for-service payments where costs could be unlimited.

Though the two sides may disagree on the value of private plans, consensus on all sides seems to be that something needs to change with regard Medicare overall.

“The next president has got to take action on healthcare in America,” said Bruns. “We spend twice as much as any developed nation. It’s an open question as to whether we’re getting better value. The fundamental issue is we need affordable, quality healthcare for every American. We need the two political parties to quit spending their time and effort to bash one another.”



August 2008