Written by Larry Sobal, CEO, Appleton Cardiology Associates

It’s the morning of July 4^th.   Congress may be home for the holiday, but physicians can’t relax.  As I reflect on our nation’s fight for independence many years ago, here’s my view from the trenches in a battle that has far reaching consequences for healthcare in America. 

This week, before you’ll read this, our Washington representatives will reconvene to fight over a 10.6% reduction in Medicare reimbursement to physicians that was scheduled to take effect July 1^st. 

Not surprisingly, there’s a Democratic versus Republican standoff.  The majority Democrats are in favor of cutting the Medicare Advantage program to help replace the cuts and feel it is too generous to private insurers.  The Republicans support Medicare Advantage because they feel it lets participants get their health benefits through private insurers. 

Despite these conflicts, the U.S. Senate recently failed by only one vote to eliminate the cut. The Senate’s failure is especially unfortunate because the House had already approved the bill by a huge margin.  I’m happy to report that all Wisconsin representatives voted to delay the cut. 

On June 30^th President Bush stepped in and directed Medicare to freeze Medicare rates until July 15^th to provide representatives a chance to reach resolution.

So why be concerned? This issue is much larger that just a potential one-time reimbursement reduction.  This is the 3^rd year in a row that a cut was planned and had a flurry of last minute legislative activity to delay it.  By pushing the cuts back to a later date, they are simply accumulating as part of a long-term plan by Medicare to reduce physician reimbursement by 40% by 2016 with the next reduction already planned for January 1, 2009.

For physicians, Medicare currently pays around 30 cents on the dollar at rates that are roughly the same since 2001.   Aside from causing some physicians to stop seeing Medicare patients entirely, this has prevented many physician practices from making needed investments in staff and health information technology to drive quality improvements.  Furthermore, this flawed reimbursement model serves to financially punish physicians for participating in initiatives that encourage preventative care that reduces more costly hospitalizations

For practices like Appleton Cardiology, where a large majority of our patients are Medicare, this cycle of reducing then repealing over the past 3 years amounts to a roller coaster of uncertainty and has negatively impacted jobs and services.   

What is needed most is a complete overhaul of the process that determines what providers are paid.  Known as “SGR”, it is a complicated formula that even Medicare admits no longer functions as it was originally designed and results in unexplainable differences between how different providers are paid for the same procedure or test. 

This reimbursement conflict is symptomatic of much bigger issues facing Americans.  A recent poll by the American Medical Association showed that many physicians are beginning to limit or stop accepting Medicare patients in their practices.  This comes at a time when a looming physician shortage is already restricting access to physicians in some parts of the country. 

If you take 30 cents on the dollar and reduce it another 40 percent, it’s not hard to imagine physicians deciding that Medicare is just not worth it.  Consider the prospect of not being able to get access to a physician as you get older and your health issues accumulate.

This is a complicated process that’s too frequently being fought in the media while Washington struggles to find a solution and speaks to how complicated our healthcare system is.  If you thought that the next president will be able to apply a simple “fix” to our healthcare system – think again.   My advice, regardless of whether Washington again delays a cut this week, is to stay healthy and hope your local doc stays in business in the long run.