Medicare Dilemma for Orthopedic Surgeons

Yesterday's notice from the American Academy of Orthopedic Surgeons:

"As expected, today’s Senate vote on whether to consider the Baucus Medicare package failed. As both parties begin to negotiate compromises on their respective bills, we urge Senate leaders to work on a bill that can enjoy broad bipartisan support in the Senate and be enacted into law before the 10.6 percent cut goes into effect on July 1, 2008."

Medicare's physician payments have been spiralling downward since the 1990's. A recent Texas public survey concludes the reasonable surgeon fee for total knee replacement is $5000. In Arizona in 2008 the exact surgeon medicare allowed payment is $1412 (this is a "global fee" and includes day of surgery, hospital rounds, and all treatment for 90 days after surgery). This rock bottom reimbursement schedule has many orthopedic surgeons, including me, contemplating dropping Medicare from their practices. This is a direction I am reluctant to take. I do not want to restrict needed care for "America's Greatest Generation".

The current Medicare fee schedule fails to provide a high enough level of reimbursement for any orthopedist to run a financially successful practice. In reality, the Medicare segment of my practice is subsidized by having other payor sources. Deeper cuts in Medicare physician payment is on the near horizon. When these cuts occur physicians will take "evasive" action. Medicare is an all or none system. Doctors are either on the plan and accept Medicare rates or are off the plan and charge patients "market rates" that can be modified based on the patients ability to pay.

I predict in the next year experienced surgeons will leave the Medicare program (opt out) and choose a free marketplace to offset the rising costs that have been absorbed by physicians for the last 15 year.

Here is an excerpt of my letter to the Senate.

"As an orthopedic surgeon practicing in Arizona I provide medical care to our senior citizens. I continue to accept Medicare patients in my practice.
My Medicare participation allows these, "our greatest generation", wide access to care these patients have grown to expect. I am writing to urge you to pass a Medicare package that keeps intact current Medicare rates. Any cut in Medicare reimbursement will push me to opt out of Medicare participation. I will be unable to subsidize the costs associated with providing care to Medicare patients if the rates are cut any lower.

* The deadline for enacting a fix is quickly approaching;
* Allowing the cut to go into effect will have a detrimental effect on Medicare patient’s ability to access care;
* An 18-month positive update must be enacted to prevent physicians from leaving the Medicare program;
* Including a provision that moves the budget neutrality adjuster from Medicare work values to the Medicare conversion factor will help bring equity and fairness to Medicare payment calculations."

Please comment on this post. I want to know what you are thinking.