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Are Medicare Opt-Out Concerns Overblown?

Are Medicare Opt-Out Concerns Overblown?(September 4, 2013): Since the passage of the Affordable Care Act, there has been a significant concern that many physicians would choose Medicare opt-out rather than remain a participating provider.  Even today, it’s hard to find a physician who does not express some concern about Medicare’s regulatory burdens and payment caps. Moreover, doctors are certainly aware of the instability of the program’s reimbursement system, which sees cuts each year unless Congress proactively intervenes to prevent them.  One would think that these two factors might lead to an increase in the number of physicians choosing to opt-out of the Medicare program. Surprisingly, a recent study has concluded that the opposite is true.  The number of providers accepting new Medicare patients has actually increased  in recent years.

I.  HHS Study Finds More Physicians are Accepting Medicare Patients than are Choosing to Opt-Out: 

The U.S. Department of Health and Human Services (HHS) has released a new study which analyzed seven years of government data covering such topics as physician acceptance rates, participation and billing statistics, and patient satisfaction levels.

The study found that the rate of physicians willing to treat new Medicare patients has slightly risen over the past two years.  The 2012 Data from the “National Ambulatory Medical Care Survey” revealed that over 90.7% of all office-based physicians were accepting new Medicare patients in 2012.  To compare, only 87.9% of all office-based physicians accepted new Medicare patients in 2005.  These two rates are similar to, and in some instances slightly higher than, the percentage of privately-insured patients that physicians are accepting.

Among primary care physicians (PCPs), the 2012 acceptance rate for new Medicare patients was 87.4%.  While this figure is slightly lower than the national average, it was still an increase over previous years.  It also demonstrated the overall positive trend for the percentage of doctors accepting new Medicare patients versus the percentage accepting new privately insured patients.

The Centers for Medicare and Medicaid Services (CMS) data indicated that there are about 1 million providers who were participating in the Medicare program in 2011.  Among these, 650,000 were physicians while the remaining participating providers include non-physicians such as nurse practitioners.  In 2012, 685,000 doctors were enrolled as participating physicians.

The study also found that both the number of providers billing Medicare also grew between 2007 and 2011.  In 2007, approximately 925,000 doctors billed Medicare for their services.  By 2011, that number had risen to 1.025 million.

II.  Are the Number of Physicians Choosing Medicare Opt-Out a Concern?

The results of the HHS study are likely to calm concerns stemming from other sources that indicated that a greater number of physicians have been choosing to opt out of the Medicare program in recent years.  Critics of the current Medicare system often contend that low reimbursement rates from the government are causing a rising number of doctors to refuse to serve Medicare patients or simply “opt out” of the program.  Without any substantive change, they argue that the program is headed for disaster.

For example, Avik Roy, a health care policy expert, writing at Forbes, wrote that, in coming years, the United States could very well see growing shortages in the availability of PCP’s:

With the number of individuals seeking care increasing and the current medical system continuing to incentivize physicians to specialize, the number of available PCPs will decline proportional to the population.

“I think the report comes at a time when people are asking questions about Medicare,” said Jonathan Blum, principal deputy administrator for CMS, to USA Today. “It provides a more complete picture of how physicians choose to participate in the Medicare system.”

In fact, the report was commissioned as a direct counterpoint to a recent Wall Street Journal article that indicated that many doctors were steering clear of participating in Medicare. According to the WSJ article, the number of doctors who opted out of Medicare had nearly tripled, rising from 3,700 in 2009 to approximately 9,539 in 2012.

Even if physicians are not formally opting out, they are limited the number of Medicare patients they treat. For example, a survey by the American Academy of Family Physicians (AAFP) of 800 of its members cited in the WSJ article noted that the proportion of family doctors accepting new Medicare patients last year was only 81%.  In contrast, in 2010, 83% of these types of physicians were accepting new Medicare patients.  If patients want to stay with these physicians, they are forced to pay the bills themselves.  Medicare will not reimburse the physician or the patient when the doctor has opted out of the program.

Many physicians indicated that the increase in those opting out of the program was likely due to an ongoing frustration with payment rates and constant increase in complex rules and regulations.  The same AAFP survey also found that 4% of family physicians are now providing services as in cash-only or as a “concierge practice,” where patients pay a monthly or yearly fee for special access to doctors.  This is an increase of 3% in 2010.

The WSJ report also noted that even fewer doctors were accepting new Medicaid patients.  Furthermore, the number of physicians who do not participate in private insurance contracts – while smaller – is growing.  This is particularly concerning as millions of Americans are set to gain access to coverage under Medicaid under the Patient Protection and Affordable Care Act.  While health experts note that the number of providers opting out of the federal programs will not be enough to undermine the purposes of the Act, they note that some Americans will have difficulty finding physicians who will accept their new benefits or face long waiting periods.

III.  Despite These Studies, HHS Continue to Have a Positive Outlook:

The HHS study also highlighted a 2005 study that examined the characteristics of providers opting out of Medicare.  That study found that overall, less than one percent of providers eligible to opt out of Medicare chose to do so. Furthermore, the two specialties with the highest opt out percentages were psychiatrists (with 1.11% opting out) and plastic and reconstructive surgeons (with 1.56% opting out). On the other hand, only about one third of one percent of primary care physicians (0.35%) opted out of Medicare

The HHS study only compared data up to 2012. As a result, it does not mention whether cuts in Medicare reimbursements that took place at the start of 2013 as part of the budget sequestration process will impact the number of physicians entering and existing the program. Nonetheless, a spokeswoman for CMS noted that preliminary data for 2013 shows no evidence that fewer physicians will be accepting Medicare patients. Officials for HHS also noted that there would not be any shortage problems because there were more new physicians entering the health system than older physicians dropping out.

The HHS report confirms the picture it had of the overall situation for physicians, but it is not the only organization that maintains a watch over the program.  For example, independent Medicare-monitoring agencies, such as the Medicare Payment Advisory Commission (Medpac), regularly advises the United States Congress on issues affecting the Medicare program. It assesses the adequacy of Medicare payments to physicians and other providers and has always been interested in compiling data on beneficiaries’ access to care, volume growth, quality of care, and Medicare’s payment rates relative to those in the private sector.

Yet, Medpac hadn’t seen any recent “alarming trends,” so they would not have issued a formal brief had it not been for the WSJ article.  Blum noted that “It just adds one more data point to a story we’ve felt quite confident about.”

IV.  Doctors Are Using Their Patients to Speak to Congress:

Some health care experts have attributed the rise in defections from Medicare to reimbursement rates that have not kept up with inflation. Moreover, Medicare payments have also been under persistent threat in recent years from the Sustainable Growth Rate (SGR) formula.  As a result, doctors are providing their patients with more than just care during patient consultations – doctors are not talking more with their patients about insurance.

Paul Ginsburg, an economist and president of the nonpartisan Center for Studying Health System Change, notes that Medicare has been “pushing its luck” with it reimbursement system.  “By allowing the SGR and its temporary fixes to persist, Medicare is risking a backlash by senior citizens who say, ‘Hey, this program isn’t giving me the access to doctors I need.'”

If implemented, the SGR formula could result in cuts to the program of as much as 30%.  Blum called the whole process “political football” and added that physicians “tell their patients, ‘You should call your Congress person because if Congress cuts my reimbursement 30%, I won’t be able to see you.'”  With this fear that that the cuts would cause many beneficiaries to lose access to medical care, Congressional leaders are reluctant to impose reductions of such a significant magnitude.

V.  Beneficiary Satisfaction with Medicare Remains High:

The study also indicated that Medicare beneficiaries remain fairly satisfied with the program.  In particular, access to care by these beneficiaries (including the ability to find and see a doctor in a timely manner) “is high and has remained stable over the past five years.”

For example, MedPAC conducts an annual survey of 4,000 Medicare beneficiaries and 4,000 privately insured individuals age 50 – 64 to evaluate access to care.  Of those beneficiaries surveyed in 2012, 77% said they had never waited longer than they wanted to for an appointment during the past year. In 2008, that number was 76%. Among patients with private insurance, the numbers were 72% and 69%, respectively. Finally, among those patients seeking treatment for an illness or injury, 84% said they never had to wait longer than they wanted. This figure remained unchanged from 2008.

In contrast, MedPAC found that roughly 28% of the 7% of Medicare beneficiaries looking for a new doctor had a tough time finding someone who accepted Medicare last year.  However, Blum indicated that these figures are comparable to privately insured rates.

Joe Baker, president of the nonprofit patients’ advocacy group Medicare Rights Center, told USA Today that “Overall, the clients we deal with have good access to physicians. We find the physicians who don’t take Medicare don’t take other insurance either, but it’s not a problem we see regularly.”

Nevertheless, Baker noted that some areas have seen a decrease in Medicare acceptance.  Many of his clients have had a harder time finding doctors in densely populated and/or affluent cities, such as New York, Washington, D.C., and San Francisco. “In most places, doctors can’t pick and choose because Medicare is the biggest game in town, or the only game in town,” he said.

VI.  Conclusion:

The recent HHS report is likely to stymie many concerns that there is a growing shortage of physicians accepting new Medicare patients.  Experts note that, when the new health care reform law kicks in next year, millions of uninsured people will now have access to insurance.  This will lead to an increase in demand for medical services and may make it more difficult for patients to find access to care or to schedule doctors’ appointments. If that were to happen, federal and state officials and leaders of the medical profession would then need to find ways to increase the supply of health care providers

Nevertheless, as the results demonstrate, almost 90% of all office-based physicians report accepting new Medicare patients. Furthermore, the percentage of physicians who report accepting new Medicare patients is similar to the percentage of physicians who report accepting new privately insured patients. While the share accepting new Medicare patients has been relatively stable over the 2005-2012 period, there has been a slight increase in 2011-2012. Beneficiaries also report favorable access to care, including the ability to find a physician and see a doctor in a timely manner. Again, these results are comparable to reports by patients with private insurance and have been stable over time. Overall, Medicare beneficiary access to care has been consistently high over the last decade and continues to be high today.

Saltaformaggio, RobertRobert Saltaformaggio is an Associate at the health law firm of Liles Parker.  Our firm represents health care providers around the country in connection with ZPIC audits, Prepayment and Postpayment Reviews, Medical Board Actions, Corporate Compliance issues and Transactional projects.  For a free consultation, please give us a call.  We can be reached at: 1 (800) 475-1906.

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