Medicare Compliance & Reimbursement

Medicare acceptance relies on more than physician reimbursement, study suggests

Physician advocates' fears that inadequate reimbursements will force practices to turn away new Medicare patients may not hold water.

Physicians' willingness to accept new Medicare patients over the past few years shows insignificant effects from payment rate fluctuations, according to a study the Center for Studying Health System Change released Jan. 9. Nearly three-quarters of those physicians who participated in the survey reported that their practices were open to all new Medicare patients during 2004 and 2005--no significant change from acceptance levels during 2000 and 2001, the study reveals.

"Despite fluctuations in both Medicare physician payment and access during the past 10 years, Medicare beneficiaries' access to physicians remains high and is on par with physician access for privately insured patients, even though Medicare payment rates average about 20 percent less than private insurance rates," notes HSC senior researcher Peter J. Cunningham, Ph.D.

The study's results offer some consolation to providers and benes alike in lieu of the pending Deficit Reduction Act of 2005, which would invoke a physician payment freeze and reverse the 4.4-percent increase that went into effect Jan. 1, 2006.

Acceptance Levels Remain Flat Despite Payment Fluctuations

Medicare patient acceptance levels show no statistically significant change compared to levels seen in 2000 and 2001, the study concludes. Nearly 73 percent of physician practices accepted all new Medicare patients in 2004 and 2005, with only 3.4 percent accepting none, the study finds. Physicians accepting "some" Medicare patients totaled 9.7 percent, and those accepting "most" Medicare patients totaled 14 percent.

The study's results challenge physician advocates' assertions that payment reductions have a direct and dramatic impact on Medicare benes' access to providers. The study's statistics actually show an inverse relationship--when physician payment rates increased between 1997 and 2001, the percentage of physicians accepting all new Medicare patients declined from 74.6 to 71.1 percent. The study reflects the same trends in physician acceptance among patients with private insurance.

Physician Capacity Constraints, Practice Incomes Offer Greater Insight

If payment rates alone don't open or close provider doors to Medicare patients, additional factors are clearly at hand. "While concerns about Medicare beneficiary access have focused on physician payment, policy makers should recognize that Medicare fees are only one factor in physician decisions to accept new patients," says HSC president Paul B. Ginsburg, Ph.D. "In other words, Medicare fees don't exist in a vacuum."

Instead of a direct payment-to-acceptance relationship, trends uncovered in the study may reflect a connection to loosened physician capacity constraints, suggests HSC. Increasing physician office visits in the 1990s, which caused many physicians to accept fewer new patients, have leveled off since 2001.

There may also be a connection between Medicare acceptance and physician practice incomes, the study suggests. Physicians with practice incomes below $120,000 per year showed proportionately greater Medicare acceptance levels, increasing from 65.2 percent in 2000 and 2001 to 72.2 percent in 2004 and 2005. On the other hand, acceptance levels for physicians with higher practice incomes held steady during the same period.

Lucrative Physician Services Help Bridge The Gap

Medicare physician payment rates have fluctuated dramatically since 1997, rising sharply between 1997 and 2001. Rates decreased 5.4 percent in 2002 and 4.4 percent in 2003. But subsequent rate reversals, suspensions and increases over the next few years restored most of the overall reduction by 2005.

Medicare bases physician payment adjustments on growth in physician services. Continued growth in lucrative physician services may have helped support Medicare acceptance and offset relatively flat payment adjustments, HSC suggests. "Perhaps the greater risk is not that stagnant Medicare payment levels will reduce Medicare beneficiaries' access to physicians, but that continued financial pressure from all payers and declining incomes will compel physicians to limit patients that generate the least revenue, especially Medicaid and uninsured patients," says HSC.

Payment Formula May Not Be Off The Hook

Reimbursements may not have as much impact on Medicare patient acceptance as physician groups allege, but don't discount their significance. Among those physicians who didn't accept new Medicare patients in 2004 and 2005, more than two-thirds cited inadequate reimbursements as an important reason. "Although Medicare beneficiaries' access to physicians has stabilized, access problems could emerge over time without changes in the Medicare physician payment formula," warns Ginsburg. "If the status quo continues, Congress will face a trade-off of uncontrolled physician spending or risking access problems for Medicare beneficiaries."

To view the complete tracking report, visit www.hschange.org/CONTENT/811.