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Up Front | Feb 2006

What You Can Count On

Death, taxes, and Medicare reimbursement reductions—2005 ended oddly, if you read serial faxes or e-mails about what the Centers for Medicare & Medicaid Services (CMS) was prepared to do to physician reimbursements. Fax No. 1: A 4.4% cut in reimbursement rates will occur in 2006. Fax No. 2: Organized medicine opined that the proposed cut would be reversed. Fax No. 3: A communiqué stated there was no way the 4.4% reduction could be reversed and that physicians should prepare to bear the burden again. Fax No. 4: The next report stated that the CMS had foregone the 4.4% cut. Organized medicine breathed a sigh of relief … for the time being. I next saw the following response to Fax No. 4 from the Kansas City Star, dated Monday, January 10, 2006:

WASHINGTON – The percentage of physicians who accept new Medicare patients has increased in the past fours years despite a slight drop in physicians’ reimbursement rates, a study shows. The findings suggest that doctors would not quit seeing Medicare patients if Congress had gone ahead with a proposed 4.4 % cut in reimbursement rates in 2006, one of the authors said.

Gee, thanks for your support.

Since 1993, CMS provider reimbursements have decreased by 40%, or 3.3 % annually. The “bonus” to the 4.4% reduction that was planned for 2006 was a cumulative 26% fee cut over the next 6 years. As practitioners, it is clear that we are within a financial death spiral as far as CMS fee reimbursements are concerned. On the contrary, manufacturers, pharmaceutical companies, and hospitals continue to reap increases. How long can the balancing act on physicians’ backs continue? Until we cry “uncle” loud enough. Our practical problems will be how to pay for (1) overhead, (2) computer infrastructure so we can interface without financial penalty with third-party payors, as mandated by the CMS, (3) cost-of-living increases to our employees, (4) increasing leasing rates, (5) expensive devices, etc.

What can you do? I believe there are at least three actions that would benefit your practice. First, do whatever you can to generate part of your income from the free market in the form of elective services. Other specialties have the opportunity to close their practices to Medicare recipients, because their schedules are filled with patients whose insurance companies pay 130% to 140% of the Medicare allowable. Ophthalmologists cannot do this, as the vast majority of our patients (75% to 90%) are of Medicare age. Second, contribute your time and financial support to our local, state, and national professional organizations and societies. They are our only collective voice. If you have been unhappy with their efforts, give them a call and do your part as you see fit. Other groups taking from the public coffers—manufacturers, pharmaceutical companies, and hospitals—have whipped us year in and year out at the lobbying/political game. The well-funded, well-organized, and most effective squeaky wheel does get the grease. Last, do not give away your services for free. One freebie we have historically delivered is ER coverage. I suggest you get up to date with what others across the country are charging for their after-hours expertise. My hope is that, in 2006, more of us can find positive outlets through which to improve the overall future of our practices and those that follow in our professional tract. 
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