Short Takes On News & Events

Tentative ‘Doc Fix’ Deal Would Cut Health Law’s Prevention Fund by $5B

By Mary Agnes Carey

February 15th, 2012, 2:13 PM

After wrangling for weeks over how to finance a Medicare “doc fix,” House and Senate conferees have a plan.

Photo by Jessica Marcy/KHN

The proposal would cut  Medicare payments to hospitals and other providers for “bad debt,” Medicare payments to clinical laboratories and Medicaid “disproportionate share” payments to hospitals that serve many poor patients,  and divert $5 billion  from the health law’s $15 billion prevention fund.

In addition, Louisiana would not receive $2.5 billion in additional Medicaid funds included in the health law, according to a GOP aide. Critics of that provision had dubbed the money “the Louisiana purchase,” but it was defended by Sen. Mary Landrieu, D-La.

Those funds would be used to stop a scheduled 27 percent payment cut to Medicare physicians for the rest of the year, according to a tentative House-Senate conference deal that Congress is expected to consider this week. The “doc fix” is contained in a larger package designed to extend the current payroll tax holiday through the end of the year and provide additional financial assistance to the unemployed.   If there is enough support in both chambers, Congress could approve the package by the end of this week before heading out of town for the weeklong President’s Day recess.

A summary circulating Wednesday notes that cuts to health law funding comprise a large portion of the savings funding the Medicare spending in the agreement. The package would cost about $50 billion over the next decade, with about $20 billion going towards the Medicare doc fix and Medicare extenders package.

The negotiators plan to take $9.6 billion from areas that include payment cuts for clinical laboratory services and Medicare “bad debt,” payments Medicare makes to hospitals and nursing homes when patients cannot pay for their medical care. The tentative deal would reduce Medicaid “disproportionate share” payments to hospitals by more than $4 billion.

Concerning a package of Medicare policies known as “extenders,”  the tentative deal would eliminate two – additional payments for mental-health services and a health law provision to increase payment for bone density scans. Two other extenders, one dealing with paying more to some rural hospitals to help cover high labor costs and another to allow independent laboratories to receive payments for the technical component of certain pathology services, would be phased out, giving providers time to adapt, according to the tentative deal. The package also “extends and reforms” Medicare’s current cap exception for physical, speech pathology and occupational therapy, which allows eligible beneficiaries to get additional services, “by requiring…accountability, which will eliminate wasteful spending,” according to the summary.

Additional Medicare payments for ambulance services, as well as a policy to base supplemental payments for Medicare physicians based on geographic factors and to provide more Medicare money to certain rural hospitals with 100 or fewer beds would all be extended.  The agreement calls for the Government Accountability Office, the Medicare Payment Advisory Commission and the  Centers for Medicare and Medicaid Services “to report to Congress on their effectiveness and ways to greater protect taxpayer dollars.”

American Medical Association President Peter W. Carmel, M.D. said  that while doctors were pleased the deal would stop a reimbursement cut set to begin March 1, the package “represents a serious missed opportunity to permanently replace the flawed Medicare physician payment formula and protect access to care for military families and seniors.”

14 Responses to “Tentative ‘Doc Fix’ Deal Would Cut Health Law’s Prevention Fund by $5B”

  1. rich says:

    Doc-fix? Here’s my suggestion for a doc-fix. No more money for greedy doctors! If a doctor refuses to participate at current rates, then they are automatically banned from participation in Medicare for life. Then, begin to rapidly roll out more neighborhood clinics all across America. Neighborhood clinics that are staffed by qualified mid-level professionals where Medicare is “always” accepted.

  2. Rich, this isn’t a matter of whether doctors accept what Medicare pays at current rates but whether Medicare pays enough for doctors to be able to accept Medicare patients. This just freezes Medicare pay, which has barely changed over the past ten years. With no “doc-fix” the flawed formula would automatically reduce Medicare payments to a level where doctors could not afford to see Medicare patients without losing money.

  3. oncdoc says:

    Those “neighborhood clinics” would be totally worthless after a 27% reduction in revenue and those practitioners wouldn’t be able to do much without specialists for support. They would spend alot of time and $ punting to the nearest ER. Get real!

  4. Joe says:

    Rich, you sound like an ignorant, uneducated, jealous person.

    Doctors are not greedy for wanting to be paid at reasonable rates for their services anymore than you are for wanting to be paid for whatever crap work you probably do.

    And as for midlevels, I urge you to use them your whole life and never see a physician. It will be natural selection at its finest!

  5. rich says:

    There’s only one fix that will get the attention of the expensive boutique (one doctor) practices that have been on cruise control for the past few decades. The competition that comes with Big-Box Health Care! What happened when Home Depot opened their doors? What happened when WalMart came into town? What happened to the little guy trying to run a mom & pop business? They don’t exist any longer! Large hospital group ACOs will do the exact same thing, only it will be more affordable. Here’s a news flash for the corrupt and abusive “designer health care” model, your days are numbered. Gee, I wonder what these small office docs will do when the local hospital group ACO opens for business? One thing for certain, their patients will leave them to find a better value. More bang for their buck. Slowly but surely these boutique practices will dry up and blow away. Good riddance!

  6. oncdoc says:

    Sorry to stomp on your socialist dream Rich, but you don’t have any idea what you are talking about! Patients are demanding better service for less ,that is for sure, and that is exactly why patients with insurance or resources will move away from the huge government controlled institutions toward private practices where there is not extreme cost shifting toward low paying govt programs and the nopay pts that are flooding the ERs. The beurocracy of CMS is out of control. Smaller practices can controll costs where the Home Depots of healthcare cannot. A payment cut of this degree would ensure the separation of govt and non govt healthcare and CMS is terrified of that because without the severe cost shifting that is present now, medicare and medicaid would already be under cost. ACOs are still just an idea and ther are many potential legal issues to be resolved.
    Medical Home=medicaid home
    I see a time in the not so distant future when private, non-govt hospitals will re-emerge providing better care for much less. Good docs will flock there in droves leaving the rest sinking on the medicare Titanic.

  7. Bob says:

    Rich,
    Are you an idiot? Maybe doc should be banned from Medicare for not wanting to lose money treating you. Pretty soon, Medicare will not have any docs and your PA will by virtue of supply and demand be getting a substantial pay raise. Do you personally want a a 27% pay cut? Do you really believe a qualified PA or NP has the same level of expertise as a physician? There is a reason they are called physician extenders; they allow the physician to delegate routine care to extenders so they can focus on the more complicated problems. They in fact are valuable to our health care system, but make no mistake, when you or your loved one is facing a life threatening health crisis, who do you want to see walk in the room…the doc or his PA?

    Rich, unless you work in government where you can simply print money and/or raise taxes …does your employer routinely provide services for clients at a loss? Do you really believe the government has ever provided goods and services at a lower cost than private enterprise? When was the last time any government program came in anywhere close to the projected costs when congress passed the bill? On the other hand, can your employer pay your salary, benefits and retirement if they lose money on every service they provide? That is pretty much what a 27% pay cut by Medicare will do to many physician specialties. A Level 3 established patient visit, overwhelmingly the most common office visit charge, will allow $49.87 and pay roughly $39.42 leaving the remainder for the patient or a secondary insurance to pay. PA’s and NP’s will be allowed $41.88 with Medicare paying $33.50 (having my dog groomed cost $30). For less than $50 per visit, your “greedy” doctor or PA will have to provide an office with all it’s associated utilities, business and medical equipment, clerical staff, nurses, billing staff, office manager, maintain malpractice insurance, etc. ( It is also fair to note that my wife pays more to have her hair done weekly). Even if the doc treats you like an assembly line patient and cranks out 40 visits per day it will take 10 to 12 hours to get thru the patient encounters. Then comes the paperwork and returning patient calls. Rich, doc is looking at 15 hour days.

    Why should the student who is the best and brightest in his class invest 10 years and in excess of $200K just to be qualified to begin a career where he/she works 80 hours per week, gets called weekends and in the middle of the night, misses holidays with family all the while have people like you characterize him/her as greedy.

    Your doc deals routinely with patients who are drug seekers and liars, non compliant patients, Medicare witch hunts for some crime of omission(note I didn’t say a crime of commission), is subject to being preyed upon by some lawyer advertising for any patient who thinks his doc made a mistake so they can sue and get rich. I suspect that best and brightest individual will opt to become a salesman. My brother, a salesman, makes almost $250,000 selling chairs and everyone thinks he is smart and has had a great career. Funny, he has never saved anyone’s life and is somewhat self-centered. Hey, everyone thinks it’s OK to pay basketball and football players millions every year. Rich, those guys are “heroes” to be emulated by youth and “earn their millions”. Is your favorite athlete willing to take a 27% pay cut or is he greedy and deserves to be banned from football for life.

    Rich, how about instead we change the constitution to limit members of congress to two terms. I believe if we limit congress to only one re-election campaign, many of this country’s politicians would focus on fulfilling the promises that got them elected. Putting politicians in the position that they must continuously raise money for re-election campaigns puts them in the cross-hairs of TRULY greedy folks to whom they are obligated.

  8. Rich, you are largely correct and a couple things the docs are saying are also correct. The docs are drinking the koolaid otherwise.

    The docs are right, med school is expensive, they work long hours and primary care physicians may be underpaid, but there is no malpractice or lawyer crisis (it is a professional liability insurance crisis since rates haven’t decreased where malpractice awards have been capped or other tort reform proposals enacted), administrative costs are out of hand due to our multipayer, largely paper based system and patients are demanding more treatments because of drug company, hospital, doctor and DME direct to consumer advertising. For every advertising lawyer, there are 100 pts who present with designer illnesses who want expensive designer drugs created to treat those designer illnesses and expensive scans on machines owned by the docs or their affiliates.

    Med school educations to educate the increasing number of students who still want to be doctors should be free or subsidized. Docs should be paid fairly, like lawyers are, because as professionals they expect to and do work hard, but it’s not our fault that we worship actors and ball players more than them or that docs should be paid millions because they save lives. That’s life and sometimes it’s unfair, but unlike someone who list their low paying job, you chose this one and getting paid $200-800K is not chump change. Ask the President, you are high paid.

    Before Medicare your predecessors were working for chickens. Now you make up the majority of country club members and drive Mercedes.

    Why do docs in most other developed countries make as much or more than you with single payer systems? We met a young German oncological opthamologist in Cancun making $800000 Euros treating government and private insured patients. How do they do it and have better outcomes with half the cost?
    Get real docs. We have limited resources. We need a progressive single payer system, electronic records, more emphasis on preventative care, caps on drug costs and DME purchases etc.

    Finally, if Medicare is so bad, opt out and when you do, tell me where your patients are going to come from. Or cut down your practice, see 5-10 patients an hour and work 8 hours a day, 5 days a week, in an old style single doc, single nurse office. You’ll gross a reasonable amount of money but not millions and live like the average lawyer does, but with less work but you’ll get paid, unlike many of us.

    Oh, and convince your industry buddies, Pharma companies and reps, DME, home health and nursing home owners not to rob, cheat and steal from the Golden Cow we call Medicare to the tune of $100 Billion a year!!

  9. Joe says:

    What people fail to understsand is that most doctors are essentially middle class. They may be upper middle class, but middle class is still middle class. We aren’t in a different stratosphere than the average teacher or any other middle-class worker. We aren’t ball players, musicians, financiers, CEOs. The overwhelming majority of physicians do not make anywhere near a million a year. We may drive a Mercedes, but that doesn’t put us in a different stratosphere. We are upper middle class.

    And you know what? I went to college for 4 years, medical school for 4 years, accumulated over 100k in debt while deferring much personal happiness that my friends were able to enjoy, then made a minimum wage (when you take into account the hours worked) for another 4 years. Finally, at 30, I’m able to take care of you. I make about $200k a year, and after you take into account my malpractice insurance, my disability insurance, the cost of continuing education, my life insurance, and my taxes, I end up taking home less than $80k a year, and I live in a high cost of living area. I make about $50 a visit, frequently less. You pay your plumber probably 6 times as much to unclog your toilet. You pay 6 times as much to go watch a moron throw a ball in a hoop. You want to be mad at someone for being overpaid? Look to the ball players, the movie stars, the CEOs, the finance titens who literally produce no value while gambling with our money. Don’t look to the physicians who made significant sacrifices to take care of people like you.

    And who are the people like you who I take care of? For the most part, they are fat, uncaring, unyielding, high-calorie consuming smokers with no investment in their health care. I’d say less than a quarter of my patients would actually be sick were it not for their own haibts. The problem isn’t “greedy doctors.” The problem is greedy patients. You want to trim the health care cost in half? Trim the average patient’s waistline in half. Take some personal responsibility for your health – visit a gym, stop smoking, stop eating McDonald’s 4 times a day – and the health care in this country would be cut in half. People need to realize that they have a stake in this game, and not a steak.

    And greedy Pharma? Sure, some of them. But when was the last time you heard about a blockbuster, life-extending drug developed somewhere in Europe? It doesn’t happen. The overwhelming majority of game-changing drugs are developed in the US. Why? Capitalism. Money pays. If you hate capitalism so much, go live in Europe. Get your free health care there.

    You get what you pay for. And, Rich, I sincerely hope you visit only PAs and NPs, who are in general seriously underqualified, sometimes frighteningly so, to take care of even the “routine” problems they have been assigned. You’ll get what you pay for. Such would be the equivalent of modern day Darwinism.

  10. Terri says:

    Nicely said Joe. We have access to the best care in the world and that has a price. I am disgusted with those who want more for nothing. If a time comes when I am pushed pushed towards a government health care plan, I assure you I will be using a concierge physian service the for the care of myself and my family.

  11. Tony says:

    This will become a game of chicken. Will docs capitulate or will they get out of Medicare, Medicaid and TriCare? Future health care in this country may see vastly fewer doctors and many more Pa’s and Np’s. Will quality be better, I doubt it.

  12. Dave says:

    It is all politics. Obama uses the projected savings from the cut to doctor’s pay in all of his proposals to pay for other stuff. Obama then passes the “doc” fix to make sure the pay does not go down. The media falls for the shell game every time.

  13. Corinne Lazaro says:

    “Future health care in this country may see vastly fewer doctors and many more Pa’s and Np’s. Will quality be better, I doubt it.”

    This statement indicates a person who is ignorant of the studies comparing patient health outcomes from MD vs. NP and FYI the NP is not a “physician-extender” except in the minds of a few Physicians

  14. Ed says:

    What you don’t mention, Corinne, is that most of those studies you refer to are funded by organizations comprised of those “physician extenders”. There is definitely a role for PA’s and NP’s but how can you seriously compare a physician with a minimum of 7 yrs post-graduate training with someone who often has no more than 2 years. And many medical specialties require at least 9 yrs post-college.

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