Barry Reid knows what it's like to be dropped by a doctor.
About two years ago, the 71-year-old retired state employee from Tucker got a letter from the specialist who managed his diabetes care saying he would no longer accept Medicare.
"I felt, frankly, like a second-class medical care recipient," Reid said.
Reid's experience is becoming more common these days, as doctors grow weary of an unstable system for setting Medicare's payments. "I was probably at the front of what is coming down the road for a lot of people," he said.
Congress avoided an exodus of doctors from the Medicare program last week when it pushed back a 25 percent cut in physician payments that was set for January. But doctors will face an even larger cut in payments this time next year unless Congress redesigns the dysfunctional system that adjusts Medicare rates.
That system has developed a bizarre pattern in recent years: The law calls for a reduction in reimbursement rates; doctors complain; Congress acts to stall the reduction, over and over again. This year alone, doctors faced a major Medicare cut five times, and five times Congress voted to delay the cut to a later date.
The instability of the system has already prompted some doctors to leave Medicare and has more thinking about it, just as the first wave of the gigantic baby boom generation begins to engulf the program. Without a fix, experts said, more elderly Americans will have a hard time getting an appointment with the doctor of their choice.
"Medicare is a mess right now," said Dr. Thomas Bat, who practices with a group of physicians at North Atlanta Primary Care.
The practice planned to stop taking new Medicare patients if the 25 percent cut went through, Bat said. It is also considering an option that would ask patients to pay for office visits up front, and then get reimbursed by Medicare. Bat said that would at least help the office address the delays in Medicare payments, which he said can stretch for weeks every time a scheduled cut is delayed by Congress.
Bat said his practice loses between $4 and $6 on office visits with people covered by Medicare. But with enough privately insured patients in the mix, the office can stay afloat as long as it works efficiently, he said.
Some specialty groups have already dropped Medicare, Bat said, something he said he is not willing to do at this point.
"When the day comes that we tell patients no -- that is the day we will all regret, that is the day we don't want to see coming," he said.
Flawed formula
Each year, a formula known as the "sustainable growth rate" calculates the payments the system can absorb. If costs exceed a target for total spending, the system simply adjusts payments downward to meet the target. Ever since the formula triggered a 4.8 percent cut in doctors' pay rates in 2002, Congress has put off all other reductions in physician payments ordered by the formula.
Every time it comes up, doctors say they simply couldn't stay in business if Medicare reduced its payments -- especially a cut that would lop off one-fourth of what the doctors get now. Most say they already lose money on Medicare patients, even at current rates.
Medicare pays about 80 percent of what private insurance pays, according to government reports. Currently, physicians in Atlanta get $67 for a typical office visit for a Medicare patient.
While Medicare payments for doctors have remained nearly flat for the past decade, the cost of running a medical practice has gone up by more than 20 percent, according to estimates by the American Medical Association.
Survey data collected by the Medicare Payment Advisory Commission indicates that most Americans on Medicare are not have a problem getting doctor's appointments or finding new doctors. But the American Medical Association says that about one in five physicians have limited the number of Medicare patients in their practices because of the program's low payments and the threats that reimbursements would drop even lower.
Reid, the retired state employee, said he found another specialist to treat his diabetes after being dropped. He said he is happy with his new doctor, but is concerned about how long that relationship will last.
"The problem is, he is almost my age," said Reid, who is 71. "I know within a year or two, I'm going to be doctor shopping again and trying to find another physician to give me care for this chronic illness."
Expensive fix
Republicans and Democrats agree that a permanent fix is needed to give doctors the stability to run their practices. "How can they plan for capital investment, for hiring, for whatever, if there is a specter of a 25 percent cut in the Medicare reimbursements?" said David Merritt, a health policy expert at Newt Gingrich's Center for Health Transformation. "Finding a permanent solution, it has to be at the top of the agenda."
President Obama agrees. "For too long, we have confronted this reoccurring problem with temporary fixes and stop-gap measures," the president said in a statement released last week. "It’s time for a permanent solution that seniors and their doctors can depend on and I look forward to working with Congress to address this matter once and for all in the coming year.”
So, given that this is the rare issue that all sides agree needs a solution -- why hasn't one been crafted? It's enormously expensive.
The Congressional Budget Office estimates that it would cost an additional $275 billion to keep physician payments at their current levels through 2020.
So far, no one can figure out where that money would come from.
And that enormous cost would simply keep payments where they are, even as doctors' own costs will increase.
"Rather than fixing it, the politicians just postpone the problem and each time that they do that, there is more uncertainly for the physicians and other providers," said Dr. Harry S. Strothers III, president of the Georgia Academy of Family Physicians
Strothers said it's common after speaking engagements for people to approach him seeking help finding a doctor, including several just last week. "Two had just retired and found out the doctor they have been seeing for years didn't take Medicare," he said.
The problem is compounded in Georgia, Strothers said, because the state already has a shortage of primary care physicians. That allows some doctors to continue to get a steady flow of patients without seeing people on Medicare, which covers about 15 percent of the state's residents.
Strothers said the ongoing problems with reimbursements will worsen the shortage of primary care doctors, based on what he has observed while teaching at the Morehouse School of Medicine.
"You have medical students and residents who have record loans to pay for school who are reading these stories and they are saying, ‘Why should I go into primary care -- and especially geriatrics -- because most of your patients are on Medicare," Strothers said.
Dr. Kay Kirkpatrick, a hand surgeon at Resurgens, the state's largest orthopedic group, said the practice would have limited Medicare patients had Congress not taken action last week.
Kirkpatrick said she and the other doctors in her practice are relieved, but they hope Congress begins to work on a longer-term solution immediately.
"This is a little bit bigger band-aid than what we put on before, but it's still a band-aid," she said. "The bleeding is still underneath."
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