Medicare Payment Reductions to Affect Doctors and Beneficiaries

by | Published on Jul 10, 2013 | Healthcare News

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Medicare beneficiaries, doctors and other healthcare providers are in for quite a tough time thanks to rising healthcare costs not coinciding with a proportionate increase in income for the latter. The tough economic situation, which is not only an American but also a global issue, has affected the common man’s access to the world’s most powerful nation. And now more grim news has hit the industry according to CNN report published in March 23, 2013. Here we discuss how those reports affect doctors and beneficiaries.

Medicare Payments to Come Down

The Centers for Medicare & Medicaid Services reveals that the automatic cuts that have been initiated by the Obama administration will result in Medicare payments made to doctors and healthcare and drug plans being reduced by 2% from April 1.

This is part of the spending cuts introduced by the Federal government which recently came into effect. This translates to a pay cut for the country’s Medicare doctors and healthcare practices which means that in 2013 doctors treating Medicare beneficiaries will be reimbursed only 98 cents per dollar for various services they offer. Overall, the year will see these healthcare providers and hospitals receive $11 billion less than the above $500 billion payments awarded in 2012.

Impact Will Be Tough, Warns American Medical Association

The American Medical Association reminds that though a cut of 2% does not seem much, Medicare payments for doctors have already been lagging. In the course of the past decade or more, healthcare costs have risen by 20% while physicians’ Medicare payments have only had a 4% increase during the period.

Ultimately this will affect patients covered by Medicare some of whom are already finding it difficult to get a doctor to cater to their needs. These cuts could have a major bearing on people’s access to health, at a time when millions of dollars are spent, needlessly according to many people, in keeping US troops in the Middle East.

Affecting A Sizeable Chunk of American Patients

There are 47 million Medicare patients in the US and cuts such as these have become something affecting the national health of the nation. Doctors treating Medicare patients have constantly been facing the prospect of payment cuts. This is because Federal law has set in place automatic Medicare cuts for ensuring the financial soundness of the program. Thanks to the interference of Congress, the number of times the cuts are enforced has been brought down over the past ten years.

The Uneasy Dilemma Facing Healthcare Practices

When doctors get paid less and healthcare practices start receiving lesser income, they start resorting to measures to save their existence. Some practices have already begun to keep away from patients who are Medicare beneficiaries thanks to low reimbursement rates. If other healthcare centers across the country follow their example it would get quite tough for Medicare patients to get care.

There is also the concern, expressed by the American Academy of Family Physicians, that private insurers will begin to follow Medicare’s policy and begin introducing cuts since private insurance providers generally keep Medicare as their base while fixing payment rates. If such a trend starts growing, small practices and particularly those situated in rural areas will get hit. They will be concerned more about ensuring the sustainability of their practice since they already operate on very thin margins.

Rajeev Rajagopal

Rajeev Rajagopal, the President of OSI, has a wealth of experience as a healthcare business consultant in the United States. He has a keen understanding of current medical billing and coding standards.

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