Medicare treadmill exhausts doctors

By Dale Rodebaugh | Herald Staff Writer

In the first six months of 2006, Durango Family Medicine collected 54 percent of what it billed Medicare and 37 percent of what it billed Medicaid.

“It’s frustrating,” said Dr. Martin Pirnat, one of the physicians at Durango Family Medicine. “All we want to do is take care of our patients.”

It’s not just a problem for his practice. Low Medicare reimbursements to all local physicians will deter many area doctors from accepting some of the 8,000 to 10,000 senior citizens who no longer will have a primary-care physician when Valley-Wide Health Systems closes its clinic in Durango at the end of March.

While the city of Durango and La Plata County are looking for stop-gap measures locally, the reform of Medicare with its bureaucracy and inherent inertia must start with Congress, Pirnat said. A start would be replacing the flawed Sustainable Growth Rate formula with a system that provides consistency. The formula is based on numerous and variable factors.

Congress is working on the issues, according to the Colorado’s legislators who represent the area.

Cody Wertz, a spokesman in Denver for U.S. Sen. Ken Salazar, D-Colo., said Congress recognizes the shortcomings of Medicare and its physician-reimbursement system. In last-minute action before adjourning last year, legislators approved the Sustainable Growth Rate, or SGR. Without the approval, physicians would have received 5.1 percent less in Medicare reimbursement starting Jan. 1, he said.

A permanent fix for the SGR could begin to emerge from work of the Medicare Payment Advisory Commission (MedPac) slated to start in March, Wertz said. MedPac has a broad charge, including looking at access to health care and quality of services.

“The hope is to reform the entire system,” Wertz said. “They’ll be looking to bolster health care, but there are no details yet.”

Politicians take various tacks

Sen. Wayne Allard, R-Colo., has been working with the Centers for Medicare and Medicaid Services to find care for senior citizens who will be deprived of their primary-care physician when the Valley-Wide closes.

“I was disappointed to hear about the departure of Valley-Wide Health Systems from Durango. And I am concerned about Colorado physicians who cannot afford to accept Medicare patients because of the level of physician reimbursement and about the potential reductions in reimbursements,” he said in a written statement.

U.S. Rep. John Salazar, D-Manassa, told Gov. Bill Ritter in Denver on Friday that designating La Plata County a Medically Underserved Population could bring federal health-care dollars to help with the cost of health care.

Ritter said it’s very likely he will explore the possibility.

While waiting for Congress to act, La Plata County and the city of Durango have pledged $220,000 each to fund a study to find a permanent solution to the health-care crisis and to subsidize a medical clinic to be operated by Mercy Regional Medical Center. The clinic will see some of the Medicare patients and others shut out of health care by the departure of Valley-Wide.

But the repercussions of low physician reimbursement for Medicare – the health-care payer for patients age 65 and older and some people with disabilities – already has been felt in La Plata County. In anticipation of the Valley-Wide departure, family physicians in La Plata County stopped accepting new Medicare patients several months ago.

In fact, Alamosa-based Valley-Wide, which has subsidized its operation in Durango since the health agency arrived here in 2001, cited chronic deficit spending as the reason for closing the Durango clinic. Valley-Wide supports services in La Plata County with revenue earned elsewhere.

Demand keeps growing

Meanwhile, demand for primary care continues to grow. Sheila Casey, the director of the Durango/La Plata Senior Center, said a week doesn’t pass that she doesn’t hear from people who have moved to or who plan to move to La Plata County and need a physician for themselves or their aged parents.

Durango Family Medicine, made up of six physicians and a nurse practitioner, already is caring for a significant share of the elderly, Pirnat said. The practice has charts of 11,000 patients, including 17 percent Medicare, 13 percent Medicaid and 27 percent Blue Cross/Blue Shield.

Primary-care physicians in private practice usually cap their Medicare patient load at 10 percent to 15 percent, said Pirnat, whom the Colorado Academy of Family Physicians named its outstanding practitioner last year.

Physicians can calculate fairly accurately the non-medical costs of running a practice, beginning with rent and utilities, salaries of administrative personnel and the cost of malpractice insurance. Professional services are a different matter.

Medicare reimburses physicians according to “numerical codes,” that reflect factors in the time spent with a patient, Pirnat said. The factors involve the severity and complexity of the case and the amount of counseling the patient receives.

Of course, Pirnat noted, time spent with a Medicare patient whose treatment may affect his or her blood pressure, heart condition or diabetes is greater than treating a 17-year-old athlete with the same complaint.

‘Allowable’ amounts not consistent

Medicare establishes an “allowable” amount for each medical procedure, which varies from region to region (Hawaii is higher, for example, Pirnat said). The allowable amount is always less than what doctors bill and, what’s worse, Medicare actually pays less than its own allowable amount.

Cheryl Myer, the office manager at Durango Family Medicine, cited a recent case. On an $88 charge, the Medicare “allowable” fee was $59.66. But then Medicare actually pays only 80 percent of its allowable – in this case, $47.72.

The shortfall – $11.94 in this case – encourages patients to carry supplementary insurance to make up the difference, Pirnat said. But taking a cue from Medicare, insurance companies that provide supplementary insurance often don’t pay the entire difference. The patient is then billed for whatever remains of the difference.

But because physicians can’t collect more than what Medicare allows – in the case cited, $59.66 – Durango Family Medicine wrote off $28.34, which is the difference between the billed amount and the Medicare allowable.

In this example, Pirnat’s practice wrote off 32.2 percent of the amount billed.

Mid-level practitioners such as a physician’s assistant or nurse practitioner handle some cases because the cost of their service is less, Pirnat said. But they, too, are paid only a fraction of the amount billed.

Payments slow to arrive

In addition to less-than-cost Medicare reimbursement, physicians often wait a long time for reimbursement payments, Pirnat said.

A one-time delay occurred when Durango Family Medicine moved last summer from old Mercy Medical Center to the medical office building at Mercy Regional Medical Center in Grandview. The practice received no Medicare reimbursements from August through the end of November because of a snafu related to the change of address.

Chronic delay in reimbursement occurs because a lot of Medicare payments are distributed through private insurance companies and other agencies that contract with the federal government for that service. The payers drag out reimbursements to earn money on what is known as the float – the difference between billing date and actual payout.

The situation of family physicians who accept Medicare patients in order to build a practice or to help care for an aging population is analogous to that of the apocryphal gambler who learned that the casino where he risked his money ran a crooked operation. The response was: “I know, but it’s the only game in town.”

What’s a physician to do?

“It doesn’t pay to run faster – take on more Medicare patients in hopes of catching up,” Pirnat said. “You just end up going broke faster.”
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