As of June 1st, 2010, physicians treating Medicare patients faced a 21.2 percent reimbursement cut - the result of the flawed Sustainable Growth Rate (SGR) formula used to set Medicare reimbursement rates. CMS, expecting Congress to delay the reimbursement cut, has been holding up the processing of claims pending Congressional action.

In late-May, the House of Representatives passed legislation by a vote of 245-171 delaying this cut for 19 months and providing doctors with a 2.2% payment increase for the remainder of 2010 and an additional 1% increase beginning in 2011. The House-passed proposal would have cost $22.9 billion. Late on Friday, June 18th, the Senate passed a shorter six-month fix to Medicare reimbursement. The Senate six-month fix would provide doctors with a 2.2 percent increase and cost $6.5 billion.

Also on June 18, CMS announced it understood that physicians could not go any longer without the cash flow, and that it would no longer delay the processing of Medicare claims. Hence, CMS began reimbursing, with the 21.2 percent cut, the Medicare claims it had been holding since June 1st.

This reimbursement cut has a direct impact on both physicians and patients. Under the cut, reimbursement to primary care physicians for a midlevel office visit will fall from $70 in 2009 to $59. Cuts to physician reimbursement provide physicians with less incentive to treat Medicare beneficiaries, including the disabled, and will ultimately lead to decreased access to necessary care for patients.

PAF has documentation of 743 medical practices across 44 states that have closed or stopped seeing Medicare patients in response to continuing Medicare reimbursement difficulties as of June 23, 2010.

    123 sites that have closed locations with a direct impact on patient access
    311sites pending potential bankruptcy that will either close or are pending a sale to a hospital
    204 practices that have been sold to hospitals
    71 that have been sold to other practices or other corporations
    34 that are referring ALL chemotherapy and drug administration to the hospital setting or other site of care due to reimbursement, financial risk and patient out of pocket exposure

At this time, all states except six -- Hawaii, Kansas, Maine, Montana, North Dakota and New Hampshire -- have reported practice closures or patient access issues. NPAF anticipates a sharp decline in Medicare physician access as a result of this reduction in reimbursement.

While a draft version of the health care reform legislation did include a permanent solution to the SGR formula, the final legislation did not address the issue. The House of Representatives and United States Senate must come together to find an immediate and permanent solution to the SGR formula that preserves access for patients.