Alert
Close

Introducing AARP RealPad: The Wi-Fi Tablet That Makes It Easy to Share, Learn, Connect and Play. Learn more

HIGHLIGHTS

Open
10,000 Games Galore Sweepstakes from AARP

AUTO BUYING PROGRAM

AARP Auto Buying Program

DRIVER SAFETY

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

Contests and
Sweeps

Safe Driving in 2014 Sweepstakes

Learn how AARP Driver Safety can help you stay safe—and enter for a chance to win $1,000. See official rules. 

Download the ipad App

AARP-iPad-ePub-app

KEEP BRAIN ACTIVE!

AARP Games - Play Now!

AARP Books

Medicare for Dummies book cover

Get the answers you need, from Patricia Barry, AARP's Ask Ms. Medicare

Most Popular

Viewed

Nothing has been viewed

share your Thoughts

Reader stories help us fine-tune our education efforts and strengthen our calls for action on issues that matter most to you. We read and learn from every story and may use yours (with permission) to brief legislators, inspire other readers and more. Please share your story with us. Do

Payment Formula

Medicare Doctors Face Pay Cut—Again

Senate passes measure but "doc fix" must go to House

doctor in the house?

Thinkstock/Getty Images

A cliffhanger that has played out in Congress over recent weeks came to a denouement of a kind today when the Senate finally acted to stave off a scheduled 21 percent cut in Medicare payments to doctors. It postponed the cut for six months and increased payments by 2.2 percent for that period. But the cut has already gone into effect and cannot be lifted unless the House of Representatives votes to endorse the Senate bill. A vote is expected next week.

The Senate development disappointed physicians who wanted a longer delay, and it did little to ease consumer fears that more doctors will stop taking Medicare patients while they remain uncertain whether the pay cuts will again be postponed at the end of the year. “Congress is playing Russian roulette with seniors’ health care,” AMA President Cecil B. Wilson, M.D., said in a statement today. “Already the instability caused by repeated short-term delays is taking its toll.”

The situation affects not only physicians but also millions of patients enrolled in Medicare and TriCare, the health program for military families that ties its payment rates to those of Medicare. A series of Band-Aid solutions "creates a dangerous atmosphere for seniors and their doctors," says AARP Executive Vice President Nancy LeaMond. “Finding a physician is already a challenge for older Americans."

Cuts go into effect

The massive pay cut was supposed to kick in Jan. 1, but was postponed until June 1. Just before the Memorial Day weekend, the House passed a bill that would delay the cut for 19 months, but the Senate failed to act. The Medicare agency then used its administrative authority to freeze payments to doctors through June 17 to give Congress more time to avert the cuts. When that grace period expired yesterday, Medicare began processing doctors’ claims at a rate that reflects the 21 percent pay cut. This will continue, officials say, until the House acts.

This “doc fix” scenario, as it’s called in Washington, has occurred every year for nearly a decade. Under a law passed in 1997, Medicare rates for physicians and other providers are calculated under a complex formula that was designed to curb the growth of Medicare costs, but later resulted in cuts so unpopular that Congress has annually postponed them. The legal requirement remains, however, swelling the cuts cumulatively to reach 21 percent this year.

Physicians say that even with Congress enacting this latest fix, it will not necessarily prevent doctors from limiting the number of Medicare patients they treat or opting out of the program altogether unless the current payment formula is repealed. President Obama has also called for a permanent fix. Doctors “shouldn’t have this guillotine hanging over their heads every year,” he told a town hall meeting of seniors last week.

Doctors limit Medicare patients

Nearly one-third of primary care physicians say they have already been forced to cut back on the Medicare patients they see, according to a recent survey of 9,000 doctors conducted by the American Medical Association. More than eight in 10 said it was because of the ongoing threat of future payment cuts.

That threat creates a “financially unstable situation” that affects a typical primary care practice in many ways, says Fred Ralston Jr., M.D., president of the American College of Physicians. “It’s difficult to recruit new doctors, it’s horrible for morale, and it’s harder to borrow money to invest in improvements for your practice when the possibility of having the rug pulled out from underneath you is always there,” he says.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Reading eyeglasses eyemed 6 membership benefit health

Members save 25% on orders of $200 or more and get 25% off lens upgrades at glasses.com.

AARP/Walgreens Wellness Bus Stops in Clarksdale, MS

Members can get exclusive points offers from Walgreens and Duane Reade.

Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.