Posted October 4, 2006
Patient Safety and Quality Healthcare: News
Curbed Medicare Patient Access, Staff Layoffs Loom
Under pressure from an increasingly negative economic environment and continued cuts to Medicare physician reimbursement, 39 percent of medical group practice representatives polled by the Medical Group Management Association (MGMA) said they may be forced to limit the number of Medicare patients they see to remain financially solvent if a proposed 5.1 percent cut to physician reimbursement moves forward. Nineteen percent of respondents to MGMA's questionnaire said they would be forced to stop accepting new Medicare patients.
"These responses reflect the seriousness of the operating environment confronting physician practices," said William F. Jessee, M.D., FACMPE, president and CEO, MGMA. "It's vital that Medicare beneficiaries have adequate access to the full range of medical services in their communities. But if medical practices are to continue providing high-quality care, they may have to make some very painful decisions in order to stay financially viable."
MGMA conducted its Medicare access questionnaire in June 2006, six months after a freeze in reimbursement and six months before another pending reduction. MGMA collected responses from more than 1,600 MGMA members, representing more than 34,000 practicing physicians. MGMA asked how they would manage Medicare patients if reimbursement levels were cut by an additional 5.1 percent, as proposed in the 2007 Medicare physician fee scheduled slated to take effect in January. The average respondent group comprised 21 physicians.
Respondents highlighted other negative consequences of the proposed cut:
- 39 percent said they would lay off clinical staff in 2007;
- 54 percent would lay off administrative or support staff in 2007; and
- 67 percent said they would modify or eliminate health benefit coverage for their own employees.
MGMA also solicited qualitative examples of the proposed cut's impact on medical group practices. For state-specific examples of the impact, visit http://www.mgma.com/press/Medicare_State_Research.cfm.
According to 2006 MGMA Cost Survey data, the cost of operating a group practice increased 7 percent in 2005. Medicare's failure to keep pace with the actual cost of delivering care is a result of the Sustainable Growth Rate (SGR) formula, which is tied to the performance of the nation's economy instead of the actual costs of providing care.
"Congress needs to replace the flawed SGR formula immediately and provide increases that accurately reflect a practice's cost of providing care. Only then will we avoid further harm to our health care system and ensure access to quality care for our nation's senior citizens," said Jessee.
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