Debt-ceiling deal leaves physicians at risk for massive cuts

With a controversial debt-ceiling bill signed by President Obama yesterday, the immediate threat of a government default has been remedied. And on the surface, U.S. patients are protected from the cuts required to raise the debt ceiling by about $2 trillion during the next decade.

The government belt-tightening will occur in two stages. Stage one, which does not include Medicare or Medicaid cuts, calls for immediate spending reductions of almost $1 trillion over a decade. In stage two, however, a specially-appointed 12-member Congressional committee is charged with recommending $1.5 trillion in deficit reductions by the end of November. If the committee fails to obtain an agreement that can pass both houses by Dec. 23, government programs would be cut automatically by $1.2 trillion.

Although Medicaid, Social Security, and veterans' benefits would be protected, providers could see a 2 percent cut in Medicare reimbursement under the deal. But that's not all. Glaringly absent from the deal is any mention of fixing the sustainable growth rate (SGR) formula, which still calls for physicians to suffer a 29 percent cut to Medicare reimbursement on Jan. 1, 2012.

Physician blogger Kevin Pho, MD, has predicted "horrific" outcomes for physicians. "I wouldn't be surprised to see deep cuts in provider and hospital Medicare payments, on top of the previously scheduled 29-percent cut sans doc fix," he recently blogged. "We're talking a combined 30- to 40-percent cut or more. So, if Medicare patients are having a hard time finding a doctor now, it's nothing compared to the shortages that will come soon."

As a result, all patients--not only Medicare beneficiaries--ultimately may suffer, according to Dr. Roland Goertz, president of the American Academy of Family Physicians. Not only could a 32 percent reimbursement cut lead fewer physicians to accept Medicare, he told Physicians Practice, but practices with high Medicare populations ultimately could be driven out of business.

Rounding out a "triple whammy for healthcare," the Independent Payment Advisory Board calls for $14 billion in cuts in 2015, "with physicians, insurers, and pharmaceutical companies taking the hit," noted Massachusetts Medical Society President Dr. Lynda Young in a recent blog post.

Despite the numerous unknowns for physicians, the American Medical Association says it's hopeful that the 12-member congressional committee will address the SGR issue, American Medical News reports.

To learn more:
- read the post from Physicians Practice
- see the article from American Medical News
- read the post from the Massachusetts Medical Society blog
- see the post from Kevin Pho, MD

Related Articles:
CMS proposes fee schedule with 30% physician pay cut
What government default could mean for health finance
Medicare, Medicaid could be cut with debt agreement