Docs Bailing Out of Medicare, Medicaid

July 8, 2008— -- For the past four years, Dr. Heather Tipsword has owned a family practice clinic that primarily treats Medicaid and Medicare patients in Oklahoma City. As many of her friends and family were looking forward to Fourth of July celebrations this past weekend, Tipsword was anxiously looking forward to another event altogether: Congress' meeting on the Monday after the holiday weekend to discuss some kind of fix to the scheduled 10.6 percent Medicare reimbursement cut.

To Tipsword, this round of Medicare reimbursement cuts, to become effective July 15, could make or break her family practice. (In many states, these cuts affect Medicaid too.)

"I have struggled to build up my practice, but my outlook gets worse each year," Tipsword said. "The current round of Medicare cuts -- which will cut my repayments, which are miniscule right now -- as well as increasing malpractice insurance coverage, despite an A+ rating, makes it less feasible for me to continue practice."

However, the meeting yielded no short-term fix for the problem, and by the end of the session it was clear that the 10.6 percent cut would likely go through anyway.

Now, Tipsword says she is working on an exit strategy from the program. At times, the bureaucratic demands of the job make her consider going even further.

"Due to all the daily headaches of practice -- referrals, endless duplicate paperwork to prove medical necessity, phone calls, documentation, etc. -- I would honestly love to get out of medicine altogether," she said.

Tipsword is not alone. The Houston Chronicle reported last week that more and more Texas doctors are opting out of Medicare due to growing cuts in reimbursement. And the trend is not limited to Texas doctors. Primary care doctors from around the country have told ABC News that they too are either opting out of treating Medicare patients, or are preparing to do so if Congress once again OKs slashing reimbursement rates.

"Unfortunately, there are physicians that I know of in the Columbus, Ohio, area that are opting out [of Medicare]," said Dr. Mimi Ghosh, a family practice physician at the Ohio State University Medical Center. "Most physicians I know have taken a pay cut every year for years... Reimbursements are just getting worse, and more physicians are retiring early, or going to other careers [like] pharmaceuticals [or] real estate."

"We find ourselves in a situation where our malpractice premiums went up July 1 to coincide with the Medicare cuts," noted Dr. Raymond L. Ebarb, a family physician in West Sayville, N.Y. "I totally understand the Texas physicians' decision to drop out of Medicare. I wish the decision were as easy for our practice."

"With the cost of running a medical practice only going up on a daily basis, and reimbursement taking a dive, how can doctors running a solo practice keep accepting a payer that only continues to cut its reimbursement?" said Dr. Gil Holland, a family physician in Chandler, Ariz. "This is problem is far reaching because as Medicare cuts its fee schedule, other insurance payers tend soon to follow suit. Many of my colleagues in Arizona are dropping Medicare."