For , a family doctor in the 13,000-population town of Athens, Texas, the demise of Medicare's 10% bonus will cost his 13-physician practice about $100,000 in 2016.
That's because the bump of about $664 million more a year to incentivize qualifying primary care doctors, authorized by the Affordable Care Act for the last 5 years, went away on Jan. 1. In an average practice, eligible doctors will lose about $31 a year per beneficiary.
"That's money that will come out of each physician's pocket, because I'm not going to cut my employees' pay," Curran said. He added that it's more than a double hit because it comes just a year after a cut in Medicaid reimbursement that averaged 43%.
"Whenever you get a hit like that, on top of a Medicaid hit, it affects small town and inner city docs a lot more than urban or metroplex physicians," he said. That's because those areas usually have a "county hospital" where doctors can refer patients, thereby limiting their Medicare patient panels.
So he and his partners have huddled around their tables cutting costs. "Yeah, we'll delay upgrades to our facility, put off hiring staff, and we're not going to try out a new lab test we wanted because we can't afford to," he said. "It's going to affect what we do."
Making Do and Doing Less?
Across the country, many physicians eligible for the bonus said they haven't paid attention to the 10% cut because there are so many cuts mixed in with so many incentive payments, like the physician quality reporting program and the value-based payment modifier. It's hard to follow what impact each has on revenue streams. It also gets mixed up in their minds with new codes Medicare allows for non-face-to-face, wellness, and transitional care.
"Physicians can't keep track because it's a mess," said , a solo practice family doctor in Farmington, Maine who said she is looking for another way to practice. "You get a half a percent here, a minus percent there, 2% here and minus 10% there. We're all are so demoralized and beaten into the ground because we're working with our hands tied behind our backs. When I come home at night, my brain is fried."
Some doctors who try to keep track thought the Centers for Medicare & Medicaid Services had proposed a half percent increase for primary care specialties.
Instead, it became "a negative .23%, which layers on how many patients you can see and the loss of primary care incentive payments and lack of attention for family medicine in this country for a very, very long time," said , president of the American Academy of Family Physicians who practices in York, Penn.
Also, the Medicare Payment Advisory Commission, in , recommended that Congress figure out a way to extend some form of primary care payment boost, for example, in a per beneficiary payment when the 10% bonus expires.
, president of the American College of Physicians and an internist at Vanderbilt University School of Medicine in Nashville, Tenn., noted the 10% bonus was embedded in the ACA "to address the maldistribution of primary care across the country, as an inducement or signal to younger doctors that it's okay to pursue primary care" to care for growing numbers of Medicare beneficiaries and 17 million newly enrolled people insured with Medicaid or exchange products.
In effect, it helped doctors pay for expensive electronic health record systems they are expected to have, and overhead expenses like malpractice insurance, he said. It was also to help offset temptation to pursue lucrative specialties like radiology or dermatology, "where they could earn three times what a general internist or family doctor makes," challenges that aren't going away.
The Price of SGR Victory
So why couldn't organized medicine get the bonus extended?
"I spent a whole week on Capitol Hill after the SGR (sustainable growth rate which would have cut physician pay 21%) was repealed, but members of Congress very politely told me, 'Dr. Riley, we love you, we love our doctors. But we've done all we can for you this year.' There was doctor fatigue in Congress."
The ACA legislation authorized the bonus for 5 years to the day, and their minds were shut, he said.
Riley said many doctors he's talked with have thrown up their hands and now set limits on the number of Medicare patients in their practices, accepting only long-standing patients who age into Medicare eligibility.
For , a primary care doctor in a five physician practice in Keller, a 40,000 population suburb of Fort Worth, setting panel Medicare limits was simply "a financial decision," he said. Medicare was already a money-loser, so no more than 8% of his panel of patients are beneficiaries. For a commonly billed code like 99213, the loss amounts to an additional $7.28 per visit. And they don't take Medicaid.
"For our practice, expiration of the 10% bonus will have negligible effect. But a lot of doctors have 40% to 75% of their practices in Medicare."
Riley said the bonus demise will hit doctors especially in places like Florida, where so many retirees increase the load on primary care practices.
, a family physician in Kissimmee, Fla., said the cumulative effect of all these cuts, including the 10% Medicare cut, "is physician burnout. You're working harder and harder, but the system is making it harder for you to make it. It's harder to want to care for the next person we're going to see in our exam room."
The cut does not affect most physicians who care for patients insured under Medicare Advantage contracts, so some doctors have encouraged their patients to enroll in those plans.
"We're not happy about losing the 10% primary care Medicare bonus and I suspect many offices are encouraging Medicare patients to consider Medicare Advantage because of it," said , a primary care physician in Encinitas, Calif., and former head of the California Medical Association. "Our practice only has about 10% Medicare, but many internists have well over 50% of their revenue from Medicare, so a 10% hit is a big deal to them."
Other physicians are remaking their practices as a workaround for the shortfall.
, a solo practice doctor in Mechanicville, N.Y., whose practice is 40% Medicare beneficiaries is moving more of his contracts to "enhanced primary care" under patient centered medical home models. "One insurance company pays me a fee every month, whether I see the patients or not. That's helped improve my bottom line," Price said.
He's also now offering other services, like spirometry, EKGs, and lab services when appropriate. And he's more diligent about controlling costs by scrutinizing prices for vaccines.
"And making sure that I'm on top of all the incentives, like physician quality reporting and meaningful use, so we won't be hurt when the bonus goes away," Price said.
In the end, the demise of the 10% primary care bonus won't close practices all by itself, the ACP's Riley said. "It's not catastrophic. I have not heard practices closing. But it is irritating, and sends a bad message about devaluing primary care. After all, that is one of the key philosophical underpinnings of the ACA."