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Proposed Medicare cuts upset doctors
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Dr. Jack Chapman talks about how Medicare cuts will affect the health care system.

It has become an annual ritual: The White House tries to balance the federal budget by cutting Medicare payments to doctors, and at the last minute, Congress manages to get the cuts rescinded.

This year, the fight is a little more volatile than usual. And doctors are watching anxiously to see who wins.

Dr. Jack Chapman, a Gainesville ophthalmologist who currently serves as president of the Medical Association of Georgia, said the last thing America needs is to discourage more doctors from participating in Medicare.

"A lot of primary care doctors won’t take any new Medicare patients," he said, "Right here in Hall County, we had a patient who called 13 different (doctors’) offices before they found someone who would take Medicare."

Chapman said reimbursement is already so low that Medicare barely pays enough to cover physicians’ costs. The 10.6 percent cut proposed by the Bush administration, he said, could be the last straw.

And it would affect the entire health care system, not just the Medicare population.

"A lot of private insurance plans set their fee schedules based on what Medicare pays," Chapman said.

On June 24, the U.S. House of Representatives voted 355 to 59 to eliminate the 10.6 percent funding cut. But two days later, a similar bill failed in the Senate by a vote of 58 to 40.

The American Medical Association accused Senate Republicans of political grandstanding. The bill would have restored funding to doctors by cutting payments to Medicare Advantage plans, which cover patients through private companies such as Humana, UnitedHealth and Aetna instead of directly through Medicare.

The insurance industry lobbied heavily to maintain funding for these private plans. But an independent federal study in February showed that the plans spend money much more lavishly than Medicare does.

"We do not feel the Medicare Advantage programs are doing what they’re supposed to be doing," Chapman said. "Currently their costs are 13 percent greater than regular Medicare."

Some Senate Republicans said that they voted against the bill because President Bush had threatened to veto it if it cut payments to the insurance companies.

Both of Georgia’s senators, Saxby Chambliss and Johnny Isakson, voted against the bill.

Isakson said Monday that he’s not trying to put doctors out of business.

"They should be getting an increase, not a cut. I’m with the docs on that," he said.

But Isakson said the Senate’s rejection of the bill was a tactical maneuver. "We were trying to leverage our position to force the House of Representatives (to consider our version)," he said.

The Senate version, Isakson said, could have helped improve health care in some rural areas. But the real issue, he said, is that the bill does nothing to fix the overall problems with Medicare.

"Congress has refused to face the music and totally reform the Medicare system," Isakson said. "But I think we’re reaching a critical mass. With a new administration coming in, I think this is the last time we’ll be able to keep shoving the problem under the rug."

Because the bill to restore funding to doctors did not pass the Senate, it was set to go into effect Tuesday. But on Monday, the Bush administration announced that Medicare would not process any July claims for the next 10 business days, thus postponing the law from being implemented until Congress comes back from its midsummer break and can introduce new legislation.

You might think doctors would be happy about the temporary reprieve. But Chapman said putting a freeze on new claims won’t solve anything.

"Stopping payments for 10 days is only going to make things worse if you’re already in a precarious situation regarding your cash flow," said Chapman.

Loren Funk, chief operating officer of the Longstreet Clinic in Gainesville, said he’s worried.

"It would affect us pretty significantly," he said. "Practice-wide, across all specialties, 15 to 20 percent of our patients are Medicare."

But at least Longstreet has large pediatric and obstetric clinics, and none of those patients are on Medicare. Gail Detraz, administrator for Northeast Georgia Surgical Associates, said it’s much worse for physicians who serve an elderly clientele.

"Two of our six doctors are vascular surgeons, and just by the nature of their specialty, 80 to 90 percent of their patient population is on Medicare," she said.

Detraz said she was angry when she received a form letter from Isakson calling the claims postponement "a positive step."

"Holding that payment for 10 days is not at all a good thing," she said. "For doctors whose patient population is more than 50 percent Medicare, you’ve just cut off their cash flow for two weeks. They’re basically strangled."

Dr. Andrew Reisman, a family medicine physician with the Longstreet Clinic in Oakwood and president of the Hall County Medical Society, said he was disappointed in the Bush administration’s decision.

"For the month of July, you’re looking at a one-third cut in your Medicare payments," he said, noting that his profit margin for treating a Medicare patient is currently about 1 percent.

Reisman said he loves his job and his patients, but he is thinking about opting out of the Medicare program. He said Medicare reimbursement has lagged behind the cost of inflation for decades, and nothing has been done about it because everyone assumes doctors will never abandon their patients, even if they have to operate at a loss.

"I think the government is taking advantage of the generally altruistic nature of physicians," Reisman said.

He added that there couldn’t be a worse time to drive doctors out of the Medicare program. As the baby boomers reach retirement age, their need for health care will greatly increase.

"Primary care is what you need to take care of the geriatric population, but the pool of practicing primary care doctors is going to shrink," Reisman said.

Funk said he hopes the Senate will reconsider its position and vote to reverse the funding cuts later this month.

"I’ve got my fingers crossed that they’ll work something out," he said.

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