Medicare Meltdown Forces Physicians Out of Medicare

For Immediate Release 
October 6, 2011  

Contact: Pam Udall  
phone: (512) 370-1382 
cell: (512) 413-6807 

Brent Annear 
phone: (512) 370-1381 
cell: (512) 656-7320   

Click here to follow TMA on TwitterOr visit TMA on Facebook.


 (TMA news conference explaining the Medicare cut situation, and unveiling the TMA physician survey data. Also hear a Medicare patient's concerns, and news of the action one Austin physician group practice has had to take as a result of the Medicare situation.)

“The number of Texas physicians who may be forced to leave Medicare if Congress doesn’t fix the program is staggering,” says Texas Medical Association (TMA) President C. Bruce Malone, MD. “It’s tragic. Medicare simply cannot work without physicians to care for the millions of patients who depend on it. Congress can’t wait any longer.”

Seniors, military families, and Texans with disabilities are at serious risk of losing their doctor. A new TMA survey indicates that 50 percent of Texas physicians are considering opting out of the Medicare program altogether.

“We knew some physicians would consider leaving the program, but we didn’t think the number would be that high,” adds Dr. Malone. Even considering a possible “compromise cut” of 10 percent, physicians’ responses were the same — they would be forced to leave Medicare.

We want to keep our elderly patients, says Dr. Malone, an Austin orthopedic surgeon who has been replacing seniors’ hips and knees for 37 years. “However, I might have no choice but to retire early. More than half of my practice consists of Medicare patients,” he says. Last year, his medical group laid off staff to help make ends meet.

Albert Shaw, MD, an anesthesiologist from Fort Worth, says he’s done. “It breaks my heart and haunts my soul. However, I have no choice, if I’m to stay in business to care for any patients.” Dr. Shaw’s sentiment was echoed by hundreds of physicians who responded to the survey.

For the past 10 years, Congress has delayed fixing the problem. “Now, due to their inaction, the stability and long-term viability of Medicare is threatened,” adds Dr. Malone.

The gaping problem has eroded access for both Medicare and Medicaid patients. (Medicaid is the state-federal health insurance for lower-income patients.) One-third of all Texas physicians put limits on new Medicaid patients. Medicaid access would suffer even more if Congress lets the Medicare cuts go through: More than one-quarter of Texas physicians say they will impose more Medicaid limits if the cuts occur; another 27 percent are considering such limits. Although rates for the two programs aren’t connected, physicians are likely to leave Medicaid — whose payment rates are significantly worse — if the Medicare cuts further erode their practice’s financial viability.

The Problem

The only way to stop the cut is for Congress to fix the defective formula used to pay physicians. Federal law adjusts Medicare payments to physicians annually using the Sustainable Growth Rate (SGR) formula. Because of flaws in how it was designed, the formula has mandated physician fee cuts every year for the past decade. Only short-term congressional fixes have stopped the cuts. In 2010 alone, Congress had to intervene five times to stop a 25-percent cut. Without a permanent solution, the size of the cuts continues to grow. Now physicians face the almost 30-percent cut in January. (Click here to view a video explaining the situation, the problems, and who is affected.)

During this same time period, hospitals, skilled nursing homes, home health agencies, and inpatient rehabilitation facilities all received annual Medicare pay increases. TMA believes, at a minimum, Washington needs to fix the broken physician payment system before giving more payment updates to other Medicare providers. 

To compound matters, if the congressional Joint Select Committee on Deficit Reduction can’t trim $1.2 trillion in federal spending by Thanksgiving, physicians will face an additional 2-percent cut to their Medicare payments beginning in 2013. A 2-percent cut in addition to the looming 29.5-percent cut would be devastating for physician practices.

Dr. Malone says, “Medicare patients should feel anything but secure about the future of their health care. Physicians are the foundation of the Medicare program. Without a robust network of physicians to care for the millions of patients dependent upon Medicare, the program will not work.”

About the Survey

In August, TMA surveyed physicians to better understand how a 10- or 29.5-percent cut would impact Texas physicians and their patients. The analysis includes answers from 1,906 respondents who took the survey. TMA emailed invitations to participate in the online survey to all 32,797 TMA member and nonmember physicians for whom the association has an email address. The response rate was 6 percent. Demographically, the respondents reflect the makeup of the entire TMA on the basis of age, gender, specialty, member type, and geographic location.

Data was analyzed using SPSS statistical software. Using a Chi-square test and a 95-percent confidence level, differences in population segments were conducted using cross-tabulations on the following demographic variables: age, specialty, and county. For the entire sample, the margin of error was plus or minus 5 percent.

TMA is the largest state medical society in the nation, representing more than 45,000 physician and medical student members. It is located in Austin and has 120 component county medical societies around the state. TMA’s key objective since 1853 is to improve the health of all Texans.


-- 30 --