Fee-cut impact worries surgeons

December 15, 2007

With equipment prices rising and a 10.1% cut in Medicare reimbursement Doctors are facing the realities of Medicare's new fee schedule set to take effect on Jan. 1. , Congress was divided on how to address the cut. Democrats, led by Senate Finance Committee Chairman Max Baucus (D-MT), proposed a 2-year fee fix, whereas Republicans, led by Sen. Charles Grassley (R-IA), advocated a 1-year fix. The American Academy of Ophthalmology and the American Society of Cataract and Refractive Surgery are working with the American Medical Association to seek a fully funded, 2-year positive update for doctors. They are urging doctors to contact their legislators.

Key Points

Bernard H. Chang, MD, browsed the trade show floor at the recent American Academy of Ophthalmology (AAO) annual meeting with tempered enthusiasm.

He and a colleague were interested in buying a new slit lamp and electronic medical-records technology for their burgeoning three-physician cornea practice in Nashville, TN. As they perused the vendors, they searched for the most economical way to afford these enhancements, which would support the larger office they will occupy next year. But with equipment costing $60,000 or more and a 10.1% cut in Medicare reimbursement on the table, Dr. Chang said, it is difficult to make major purchases.

"If we are faced with a 10.1% cut, we'll have to say we can't purchase this equipment," he said.

At press time, Congress was divided on how to address the cut. Democrats, led by Senate Finance Committee Chairman Max Baucus (D-MT), proposed a 2-year fee fix, whereas Republicans, led by Sen. Charles Grassley (R-IA), advocated a 1-year fix. Legislators were hoping to reach some conclusion before their Dec. 21 break; the new fee schedule is set to take effect Jan. 1. Ophthalmology advocates, including the AAO and the American Society of Cataract and Refractive Surgery (ASCRS), are working with the American Medical Association (AMA) and other physician groups to seek a fully funded, 2-year positive update for doctors. They are urging doctors to contact their legislators.

In August, the House of Representatives passed a bill with 2 years of positive 0.5% updates and based its fix on target formulas in six areas rather than what health-care advocates have for years said is a "flawed" formula based on the sustainable growth rate (SGR).

Susan M. Nedza, MD, MBA, a medical officer for the Centers for Medicare and Medicaid Services, told attendees last month at the AAO annual meeting that ophthalmologists will have just four eye-care measures on which to report because four from 2007 were dropped because they lacked National Quality Forum endorsement. According to the AAO, more than 58% of its members participated in the voluntary program, which started in July.

Offsetting revenue cuts

Although the cuts will affect every physician who accepts Medicare reimbursement, ophthalmologists are in a unique quandary about how to offset the revenue loss. According to the AMA, 60% of physicians said the cut would force them to limit the number of new Medicare patients they treat.

In a medical specialty that has a patient population dominated by senior citizens, however, ophthalmologists cannot easily limit the number of Medicare patients they see.

"It is an impractical choice for us," said Ramana S. Moorthy, MD, a retinal and uveitis specialist in Indianapolis. In Dr. Moorthy's two-physician practice, 70% to 80% of patients receive Medicare assistance. "We have hypothesized about [limiting Medicare patients], but it would be an inappropriate decision for us and probably would be financially crippling."

Other options physicians are considering include working more, perhaps by adding Saturday hours; delaying major purchases; laying off office staff; or reducing benefits to office staff. None of those decisions is easy.