Medicare in Montana: Payments not enough for primary care physicians

By MIKE DENNISON
http://www.missoulian.com

HELENA – Retiree Hugh van Swearingen hadn’t seen a doctor in four years, but when he called a Helena clinic a few months ago to make an appointment, he was told, sorry, no room at the inn.

“They said they weren’t taking new Medicare patients,â€? says Van Swearingen, who is 70. “They apologized and referred me to four or five other physicians in town.â€?

Van Swearingen found a physician who would see him. But his experience is a harbinger of things to come, many physicians say, as Montana – and the nation – face a shortage of “primary careâ€? doctors, who are the front line of medical care.

A major reason for the shortage, they say, is how these doctors are paid for their work, through a system adopted and often dictated by Medicare, the federal health insurance program for those 65 and older.

Primary-care doctors, who spend much of their time visiting with patients and analyzing patient problems rather than performing medical procedures, say the system underpays them for their time.

Medicare, which covers 43 million people nationwide and about 135,000 Montanans, also pays less than private health insurance. That means primary-care doctors who specialize in seeing older patients – “internal medicineâ€? specialists – get paid even less, because they have a higher proportion of Medicare patients.

“What you see happening with primary-care physicians is basically nobody can afford to go into our specialties any more,� says David Jordan, an internal medicine doctor in Helena. “Procedures are reimbursed more highly than an office visit.�

“You get paid for procedures, but you don’t get paid as well for thinking,â€? adds Jon Miller, a family doctor in Whitefish and president of the Montana Academy of Family Physicians. “And internal medicine is primarily a thinking specialty.â€?

Physicians say payments they receive for Medicare patients don’t reimburse enough of their costs, so some Montana physicians aren’t taking new patients covered by Medicare.

But the bigger problem, say primary-care doctors, is the overall system pays them nothing for some of the work they do, such as coordinating care, telephone calls and arranging prescriptions. It also underpays them for the office visit, while procedures that take the same amount of time or less are reimbursed at higher amounts.

Jordan notes that for a simple skin biopsy, Medicare allows payment of $78, and for the removal of a skin lesion, $72. Both take only a few minutes, he says, yet both are paid more than a 15-minute office visit, which is $55.

Jay Larson, an internal medicine doctor in Helena, says a physician performing a routine colonoscopy, which can take about an hour, gets $283 for a Medicare-covered patient – almost three times the payment for a comprehensive, 45-to-60-minute office visit involving “medical decision-making of high complexity.â€?

When a physician comes out of medical school now needing to pay off debts ranging from $125,000 to $150,000 and looks at this payment scheme, he or she is more likely to choose a higher-paying, procedure-heavy specialty.

“People who want to go into primary care look at what they can make, and they figure out they can’t make a living,â€? Jordan says. “They can’t pay off that debt (on office visits). That’s $800 a month for 30 years. That’s like buying another house.â€?

James Yturri, a Great Falls doctor who heads the Montana chapter of internal medicine for the American College of Physicians, says he probably spent two hours a day on non-reimbursed work at his old practice.

“If you try to take care of those problems thoroughly, the fewer patients you’re going to see,â€? he says. “I’ve always valued listening to the patient; I think I was good at that. And that just wasn’t very (financially) rewarding.â€?

Yturri recently left his private practice and is now medical director at Missouri River Manor, a Great Falls nursing home.

The reimbursement at the private practice was one reason for leaving, he says.

Yturri recalls that he had a dermatologist working down the hall from his old office: “He works 9 to 5, he’s not on call, he doesn’t go to the hospital. I make (a fraction) of what he makes. That’s just not right.â€?

Medicare also planned a

10 percent cut last year in physician payments to meet budget targets. That cut has been postponed until June, while Congress reconsiders.

If these cuts go forward now or in the future, more and more primary-care doctors will stop taking Medicare patients, Jordan and others predict.

“If we don’t do something (to fix the system), in 5 to 10 years, you’re not going to have access to an internist if you’re a Medicare patient,â€? Larson says.

In Montana, some cities are better off than others when it comes to access to primary-care doctors. Rural areas generally are hurting.

Missoula and its surrounding area, for instance, have only a dozen internal medicine doctors to serve approximately 15,000 Medicare patients, says Tom Roberts, an internal medicine specialist and president of Western Montana Clinic.

“It’s an impossible load,â€? he says. “So a lot of them see other primary-care doctors, other than internists. It’s hard to say (precisely) how many we need, but I would say we could probably double (the number), to really fill out our needs.â€?

Areas that have adequate access now to primary care worry about the future.

John Bartos, chief executive officer at Marcus Daly Memorial Hospital in Hamilton, where about half of the patients are on Medicare, says a half-dozen primary-care doctors in the Bitterroot Valley will retire in the next several years.

“How do we recruit for their replacement, and will we have a difficult time getting primary-care physicians?â€? he says. “That’s concerning us.â€?

It’s hard to say how many practicing Montana physicians are full-time primary care doctors, because some physicians list “internal medicineâ€? as a specialty when they don’t do it exclusively.

Blue Cross/Blue Shield reports that 43 percent of the physicians with whom it contracts are primary-care doctors. Those in the field believe the overall percentage is certainly lower, perhaps as low as 25 percent to 35 percent – and say it should be at least twice that amount.

Some efforts are being made to reverse the trend of too few primary-care doctors, such as loan-repayment programs and trying to identify certain students who might choose primary care.

But without some fundamental changes in the payment system, it’s a safe bet the problem is going to get worse before it gets better, many primary-care physicians say.

“It’s going to get worse over the next five years, I can guarantee you that,â€? says Miller.

Coming Monday: A closer look at the Medicare and physician payment system, and the debate over how to fix it.

Hospitals can receive more from Medicare than doctors

HELENA – A doctor who bills Medicare on her own gets a set payment, based on the procedure.

Yet a hospital that bills Medicare for the same service, performed by a hospital-employed doctor, can get a higher amount – sometimes as much as 75 percent more.

Medicare is the federal health-insurance program for the elderly and disabled, covering 43 million people.

The fact that some hospitals can bill Medicare for higher payments seems odd to private-practice doctors, who feel Medicare already is underpaying them. They also think it’s helping push more physicians to become hospital employees, rather than becoming – or remaining – part of an independent practice.

“Private practices are having much more trouble recruiting (doctors) than do hospitals,� says Jon Miller, a Whitefish family doctor and president of the Montana Academy of Family Physicians.

Whether the trend of more hospital-employed doctors is good for health care in Montana is open to debate.

Hospitals can offer doctors a reliable income and hours, and can use their recruiting pull to target what types of physicians are needed in the community.

“(We) continually monitor our service area’s population to make sure there is an appropriate mix of physicians to meet health-care needs,â€? says Peggy Stebbins, spokeswoman for St. Peter’s Hospital in Helena. “The hospital also monitors when physicians retire or leave the community, and works pro-actively to recruit their replacements.â€?

St. Peter’s employs 31 physicians on its staff and at local practices that the hospital recently has purchased or opened itself. The Helena hospital has a Medicare status that allows it to get higher reimbursement for procedures performed by its physicians.

Of those 31 doctors employed by St. Peter’s, two-thirds are “primary careâ€? physicians: Family doctors or internal-medicine specialists.

At the Billings Clinic, the state’s largest hospital, only one-fourth of its 210 employed doctors are primary-care physicians. However, the clinic also employs 58 physician assistants and nurse practitioners and 11 pediatricians, who provide primary care, and has 15 doctors on its “reserve staff,â€? providing primary care on a part-time basis.

Primary-care physicians believe more of these general practitioners are needed in Montana, and that a severe shortage is looming, particularly for Medicare-covered patients. They say a major reason for the shortage is low Medicare payments for routine office visits, which account for much of a primary-care doctor’s income.

Tom Roberts, president of the Western Montana Clinic in Missoula, says the higher Medicare payments commanded by some hospitals help them employ badly needed primary-care physicians.

But he says there’s also a business reason for hospitals to employ primary-care doctors: They can refer patients to hospital-employed specialists, who generate more income through their higher reimbursements for care.

“They want to corral a certain number of patients into the hospital, but it’s more for the sub-specialty doctors who provide the bulk of the revenue,â€? he says. “If you ask hospitals, they’ll say they need to (recruit) doctors to serve the population. But they also need to have the business coming through their doors to run the hospital.â€?

Hospitals designated by Medicare as “provider-based clinics� can bill Medicare more for services provided by a physician they employ. One idea behind the designation, formalized about 10 years ago, was to enable hospitals to help attract doctors to underserved areas.

For a 15-minute office visit in Montana, Medicare allows a physician to bill about $55, and pays 80 percent of the cost. If that physician works for a hospital that is designated as a provider-based clinic, the allowable charge by the hospital is about $99.

This differential is on the high end for various procedures, however. And for some procedures, the provider-based clinic may be reimbursed less than a physician in a free-standing clinic.

On average, hospitals with the designation receive about 17 percent more for all physician services for which they bill Medicare, says J.J. Carmody, a reimbursement analyst for the Billings Clinic.

In Hamilton, Marcus Daly Memorial Hospital employs 12 physicians and owns several clinics in the Bitterroot Valley. However, it is not classified as a provider-based clinic.

Hospital Chief Executive Officer John Bartos says the hospital may apply for the designation, which could mean an additional $20,000 to $40,000 per year in Medicare reimbursement per primary-care doctor employed by the hospital.

The physicians themselves are paid based on how many patients they see and the complexity of the care, regardless of the type of reimbursement the hospital receives or doesn’t receive.

The extra money could help erase part of a deficit at the hospital-owned clinics, caused in part by the low Medicare reimbursement for their physicians, he says. About half of the hospital’s patients are insured by Medicare.

Yet even hospitals with the designation are having trouble recruiting primary-care physicians, such as internists who work with the elderly.

Earlier this month, the Billings Clinic had eight unfilled spots for primary-care doctors.

“Internal medicine is probably the toughest to fill,� says Mark Rumans, physician in chief at the clinic. “They take care of the most difficult, challenging patients and reimbursement really has not kept up with the complexity of that.�

Medicare also foundation for private insurance payments

HELENA – Medicare’s payment system for physicians also is the foundation for payments made by many private insurers. Here’s how it works:

Every medical procedure is identified by a code known as CPT (current procedural terminology). Every procedure also has a “relative value unit,� which is a multiplier that reflects how much work and cost goes into the procedure.

This latter number, known by its acronym RVU, is multiplied times a “conversion factor,� which is a dollar amount determined by the federal government each year. The product of those two numbers also may be adjusted by a numerical “modifier,� such as the geographical location of the physician or hospital submitting the claim.

For example, a routine 15-minute office visit, coded as CPT 99213, has an RVU in Montana of 1.66. The Medicare conversion factor is $38.09, so multiplying times the RVU becomes about $63.

After applying the modifiers, which reduce the amount because Montana supposedly has a lower cost of living than much of the nation, and you come up with the current Medicare allowable payment to the doctor: $55.26. Medicare pays 80 percent of that amount; the patient pays the remainder.

Private insurers use the same system but have a higher conversion factor. Montana Blue Cross/Blue Shield’s current conversion factor, for example, is $57.70, which is multiplied times the RVU, without any modifier. The end result is a payment to the doctor for the same office visit of $95.78.

There are approximately 7,000 coded procedures, each of which has an RVU that is used to determine what Medicare and private insurers will pay for the procedure.

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