Robert Zirkelbach

For now, doctors are safe from cuts to their reimbursements for treating Medicare patients.

Congress voted Tuesday to override a presidential veto of a bill that halts a looming 10.6 percent cut in payments to physicians treating the nation’s elderly and disabled population.

“I think it’s fantastic,” said Dr. Phyllis Miller, a Chattanooga gynecologist and past president of the Chattanooga and Hamilton County Medical Society. “The bottom line is it will protect Medicare patients and their health care.”

Instead of cutting payments to physicians, the bill cuts $12.5 billion over a five-year period from private Medicare Advantage plans, alternatives to traditional Medicare that are administered by insurance companies.

Lobbying efforts from groups such as the American Medical Association and the AARP clashed with the insurance lobby as the bill made its way to law. Doctors and insurance industry officials were at odds over what would hurt Medicare enrollees more: cuts to physicians or cuts to Medicare Advantage plans.

“We agree that Congress should address the physician payment issue. We just don’t think that seniors in Medicare Advantage should be forced to pay for it,” said Robert Zirkelbach, spokesman for America’s Health Insurance Plans, which represents insurance companies, in a telephone interview. “Seniors enrolled in Medicare Advantage may face reduced benefits, higher out-of-pocket costs and limited choices due to this legislation.”

But doctors here say the consequences of a 10.6 percent cut to them — and the resulting exodus of physicians from the Medicare business —would have been far more devastating to seniors’ access to health care.

Chattanooga rheumatologist Gene Huffstutter stopped accepting new Medicare patients six months ago because of low reimbursement rates.

“You have to make sure you can pay your utility bills and pay your rent. We finally said, ‘We can’t continue to go on this way. Our business will not survive,’” he said.

To delay the cuts, taking funds from private Medicare Advantage plans — in which the insurance companies are paid to administer Medicare benefits — seemed the best solution for many doctors.

“I’m very much against protecting insurance companies who already have huge profits,” Dr. Miller said. “It seems that money could be taken out of some of those profits to avert the cuts in Medicare and allow patients access to care.”

Insurance industry officials and the Bush administration see it differently, arguing that the cuts will hurt seniors who rely on Medicare Advantage.

Upon vetoing the bill on Tuesday, the White House released a statement arguing that cutting Medicare Advantage amounts to taking away private health plan choices from seniors in order to pay physicians and uses “short-term budget gimmicks that do not solve the problem.”

The Medicare law cuts payments to nearly all Medicare Advantage plans, as well as adding restrictions to private fee-for-service plans, the most expensive Medicare Advantage plan. Such plans accounted for less than one-fifth of Medicare Advantage enrollment in 2007, according to the Kaiser Family Foundation, a nonprofit, private foundation that focuses on health-care issues.

Most private fee-for-service plans now must create provider networks, whereas previously the plans automatically accepted an enrollee’s doctor, said Mr. Zirkelbach of America’s Health Insurance Plans. That feature helped patients in underserved rural areas who have fewer options when it comes to choosing a physician, he said.

MORE PAYMENTS TO PRIVATE PLANS

On average, Medicare Advantage plans cost the Medicare program 12 percent more than the federal program spends to provide coverage directly to enrollees through traditional Medicare, according to MedPAC, an independent agency that advises Congress on Medicare issues.

Insurance companies use the extra payments to provide more benefits — such as dental, vision or prescription drug coverage — to enrollees than traditional Medicare, but the money also goes to insurers’ profits and marketing and administrative fees, said James Cosgrove, a researcher on health care payment issues with the nonpartisan U.S. Government Accountability Office.

The payments to insurance companies can be hard for doctors to swallow.

“What physicians find somewhat unfair is that the government is considering trying to privatize some of Medicare and find ways in private industry to cut costs, but the only player they’re looking to take money from to do that is the doctors,” said Dr. Vince Viscomi, pulmonologist and president of the Chattanooga and Hamilton County Medical Society. “Physicians say, ‘Hey, you’re trying to balance the budget on our backs.’”

The private plans also can cause confusion among enrollees, who sometimes think Medicare Advantage is the same as traditional Medicare and don’t realize their favorite doctors might not accept the plans, said Katherlyn Geter, regional coordinator for the Southeast Tennessee State Health Insurance Assistance program, a local counseling resource on Medicare.

Higher payments also increase the overall expenditures for the federal Medicare program and increase Part B premiums for all Medicare enrollees — including those not on Medicare Advantage plans — by an average of $2 per month per enrollee, according to the Kaiser Family Foundation.

Brainerd resident Freddie Thornton, who is 60 years old and qualifies for Medicare because she is on disability, said her BlueCross Medicare Advantage plan offers more than her traditional Medicare plan. Ms. Thornton said that she had to retire and go on disability in 2006 after she got a bacterial infection in her spine.

When she was enrolled on Medicare, she couldn’t get coverage for dental services or some of her lab testing, she said, and her prescription drug coverage was administered under a separate Medicare Part D plan. Now, all of that is covered under her new plan, she said.

“It’s a big advantage, financial-wise,” she said. “There were a lot of things Medicare didn’t pay for.”

A Medicare Advantage plan is often the best option for disabled people under age 65 with Medicare, patients whose pre-existing conditions can make finding affordable supplemental coverage to Medicare next to impossible, Ms. Geter said.

For those disabled beneficiaries, a cut to Medicare Advantage “could very well hurt them. It’s going to leave them with very limited choice and options,” she said.

However, the impact of a 10.6 percent cut to physicians seriously could affect seniors’ ability to get a doctor, Ms. Geter said.

“We’re already seeing a decline in providers not wanting to take Medicare beneficiaries, so that would be the worse (situation) out of the two,” she said.

Comments