Thursday, August 07, 2008

The Beginning of the Middle of the End of Medicare

The Beginning of the End of Medicare was when Congress passed the rules which require physician fees to follow a Sustainable Growth Rate or SGR,  followed by the Medicare Modernization Act or MMA, which added the prescription drug plan but prevents Medicare from negotiating lower rates from Big Pharma.  The problem with the SGR is that its calculation is fatally flawed, requiring increasing annual reductions in physician payments.  Congress recently overrode Bush's veto of their bill to nullify this year's planned SGR reduction of 10% in provider payments.  There is another 40% reduction planned over the next several years.  Since all other costs go up annually, it is a no-brainer that annual reductions in Medicare fees will eventually result in providers ending their participation in the medicare program.

We are now at the Middle of the End.  Medicare now has this bounty hunter system using "recovery audit contractors", where auditors look for "overpayments" and errors.  There has been criticism, though, about inconsistent methods and a lack of oversight of the auditors.

But for physicians who come under the gaze of the contractors, the costs to the practice can be far more than the Medicare money at stake.

Marilou Terpenning, MD, a hematologist-oncologist in Santa Monica, Calif., had to respond to several rounds of medical record requests from PRG Schultz for claims involving alleged overpayment for chemotherapy. Some of the cited overpayments were as little as $13 or so per claim, but the cost to the practice of retrieving the corresponding record and forwarding the information could be 10 times that amount, she said.
I suspect that this is part of Medicare's death by a thousand cuts.  The hassle factor for dealing with Medicare will exponentially increase to the point that few participating providers will be left standing.

(It was raining all morning, so I decided to write a relevant post :-)


Anonymous said...

Great post. Being 57 and nearing my own time on Medicare it scares me.

Meanwhile my Blue Cross Insurance effectively does the same to me. Neither my GYN nor my endocrinologist ACCEPT insurance.

I went to the endocrinologist today. He was over an hour late for my appointment. The receptionist took my B.P. and weighed me. My doctor felt my thyroid gland and tapped each knee with his little mallot. He talked to me for about 10 minutes then headed to the next patient. This guy IS smart. Sought after. I heard from the person who recommended me that Barbara Bush flies from Texas to San Francisco to see him. blah blah blah. My fee for NO labwork, NO extensive look at me, 10 minutes was $400. $400!!!!!!!!! and not ONE PENNY paid by insurance.

My typical medical expense that IS paid by insurance goes something like this:

blood work : fee charged $350
Blue Cross gets
the lab to
reduce fee to: $250

Blue Cross tell ME that reasonable and "normal" fee for this service is $50 (where??? in Iowa?? I don't LIVE in Iowa!)

So if I have not yet fulfilled my deductible I PAY the lab $250 BUT the insurance company allows me $50 towards my $2500 deductible. In order to MEET my deductible of $2,500 at that rate, I have to spend $12,500. It's a TOTAL SCAM. Meanwhile I pay nearly $1,000 per month to Blue Cross.

I don't think it will be much worse when I am on Medicare.

Dinah said...

Roy: Don't get me started...

Therapy Patient: $400 for a 10 minute appointment... and to think, I would have been a good endocrinologist...

Anonymous said...

My biggest bargain in health care is my psychiatrist. He charges me $180 for 50 minutes.

He ALSO is brilliant. He effectively has saved my life. Also he seems to genuinely CARE (or does a very good job acting as though he cares). VERY empathetic. Very analytic. Very knowledgeable. Brilliant.

On the other hand, Dinah. Look at this math.

3 visits to endocrinologist per year (although sometimes I pay $675 if he does more than tap my knee):
3 X $400 = $1,200

I don't know how many psych visits, but perhaps 90 visits in a year? twice a week when we both are in town:

90 X $180 = $16,200.


NeoNurseChic said...

Where Medicare goes, the rest of the companies will follow.

Look now at their new hospital mandates. They won't cover a whole host of things now. The regular insurers are sure to be close behind.

No matter how bad my health gets, I must always work. I have excellent health insurance, which is currently being put to the test as I may be having more surgery next week. But I am very, very fortunate. Granted, I do pay some into my benefits - but it's not a huge amount compared to what they pay out at least in my case.

The only thing they don't cover is the psychiatrist. Oh - and because of the way it is set up, I am required to go to one of the hospitals in my health system for any hospital-related care or else I have to pay $2000 deductible and they 20% of remaining costs. In the case of surgeries or hospitalizations, 20% can still become QUITE a burden.

At my last visit with my neurosurgeon, he asked me if I ended up getting a bill, and I told him no - just the copay. He said, "And now come to think of it...did I get paid?" haha I know my former orthopod used to say it wasn't even worth getting out of bed in the morning.

The fact of the matter is that I'll just have to work until I die in order to have my health needs covered. OK now I've depressed myself! haha

Can't believe you are posting on Medicare whilst on your camping trip, Roy! :)

Take care,
Carrie :)

NeoNurseChic said...

Er...that should say I have to pay a $2000 deductible and THEN 20% of remaining costs. They pay 80%. But what I was trying to say is that 20% of remaining costs can still be very expensive. $100,000 hospital bill? $20,000 my responsibility. I know I can't afford that! And yes, I have had hospital bills that were greater than $100,000....