Docs Bailing Out of Medicare, Medicaid

What's Up, Doc? Not Reimbursement Rates

According to the American Medical Association (AMA), reimbursements that have been reduced every year for nearly a decade have slashed physician payment rates by about 40 percent. Meanwhile, the cost of practice rises annually. The AMA estimates that this year practice costs will increase by 20 percent.

And according to a 2007 AMA survey of 8,955 physicians in the United States, 60 percent of doctors said they plan to limit the number of new Medicare patients and 40 percent of doctors said they plan to limit the number of established Medicare patients that they treat if Medicare payment rates are cut by 10 percent in 2008.

And because the Senate failed to block the latest reduction, this year's Medicare cut of 10.6 percent has already taken effect -- and an overwhelming majority of physicians contacted by ABC News say this will force them to either give up on Medicare patients altogether or limit the number of new Medicare patients they can treat.

Dr. Michael Aaron, who has been in rural practice in Weatherford, Okla., for 22 years, said this latest round of reimbursement cuts could be the last straw for his practice.

"I have not made up my mind completely about opting out of Medicare, but if the cuts really go through, I may not have any choice," Aaron said. "We are operating on prices that have not changed since the 1980s."

Moreover, Aaron identified a deeper problem: With fewer doctors accepting Medicare patients, more and more elderly and vulnerable patients are left with fewer and fewer healthcare options.

"We are also having an access problem. If we need to refer someone to a specialist, a large number of those doctors are also opting out of Medicare," Aaron explained.

The degree to which a doctor is affected by Medicare reimbursement rates depends on the number of Medicare patients they see in their practice. For the typical family practice doctor, the number of Medicare patients they see is usually high enough for the latest round of reimbursement cuts to deal a huge blow to their practice.

But for family practice physicians whose patient base is made up almost entirely of Medicare patients, such as those in rural or poorer arrears, these doctors often have no choice but to watch their earnings grow smaller each year until they are forced out of practicing altogether.

"I anticipate that Medicare patients will see a work slowdown -- delayed access to routine and planned care or consultation -- access problems with fewer providers, and downright strikes among physicians, especially subspecialists," said Dr. Michael Pontious, program director of Oklahoma University's Enid Family Medicine Residency in Enid, Okla.

Frustration Mounting for Physicians

According to Dr. Scott Nelson, a family practice physician in Cleveland, Miss., the reimbursement cuts have hit doctors in his state very hard.

"There is an unprecedented level of frustration with the government and Medicare in Mississippi," Nelson explained. "I have not heard of any doctors in my area opting out of Medicare, because there are not enough patients with private insurance in the rural Mississippi Delta... we have no choice but to see them, and we are literally at the mercy of the government. I foresee some small practices closing altogether."

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