Iola — More than 50 percent of Dr. Brian Wolfe's practice here is made up of elderly patients on Medicare. That is not uncommon in small, rural communities in Kansas or across the nation.
“We are totally at the mercy of what Medicare decides to do,” Wolfe said Friday, the morning after the U.S. House followed the U.S. Senate in approving legislation postponing until November a scheduled 21 percent cut in Medicare doctor reimbursements.
“We are here. We are going to provide the service. But we really are at their mercy,” Wolfe said. “We try to be as lean as we can be and do things as efficiently as we can from the standpoint of financials. So far, we're making payrolls and we're doing OK.”
The scheduled Medicare cuts became effective June 1 but now will be replaced by a 2.2 percent increase that will be paid retroactively for services provided after June 1.
Wrestling with the Medicare reimbursement formula has been an annual exercise in Congress the past few years but now is scheduled for revisiting in six months. Democratic leaders couldn't convince enough members to go along with a longer delay because of cost concerns. A permanent “doc fix,” as it has come to be called, remains a distant hope for the state and national physician groups that have been pushing for it.
Meanwhile, the uncertainty what they will be paid and when is something that rural Medicare doctors like Wolfe have by necessity adapted to, though no doctor anywhere in the U.S. seems to like it.
"Obviously, for the physican community and the hospital community, too, this annual dance that we go through with Congress is extremely frustrating and lends to a growing sense of uncertainty of how the physician community will be able to count on the federal government as a good business partner," Allison Peterson, communications director for the Kansas Medical Society said at one point during the congressional debate.
"Russian roulette
“The six-month Medicare patch Congress passed (Thursday) is a very temporary reprieve for seniors and baby boomers who rely on the promise of Medicare,” said American Medical Association President Cecil Wilson. “Delaying the problem is not a solution. It doesn’t solve the Medicare mess Congress has created with a long series of short-term Medicare patches over the last decade – including four to avert the 2010 cut alone.”
When Congress returns to the problem in November, the scheduled cut will have grown to 23 percent, in keeping with long-ago, sometimes-observed rules put in place to help balance the federal budget. By January, the scheduled cut will have grown to 30 percent.
But if Congress in November does again what it has repeatedly done, the scheduled cut will be postponed another year or six months and the scheduled cut needed to meet the budget balancing formula will grow proportionately. All this as the baby boom generation becomes the new Medicare generation, sending a huge wave of new beneficiaries into the program.
Doctors say this is no way to run a government.
“Congress is playing a dangerous game of Russian roulette with seniors’ health care,” Wilson said. “The baby boomers begin entering Medicare in six months and if the physician payment problem isn’t fixed, these new Medicare patients won’t be able to find a doctor to treat them. End the political posturing and fix the problem.”
Meanwhile, Wolfe's description of his practice was of an operation reliant on a dauntingly complicated Medicare payment system fraught with uncertainty, even if the annual reimbursement "dance" weren't in the equation.
Rural differential
Aware of the particular problems facing rural doctors, Congress through Medicare has allowed for extra payments to those who meet certain standards and threshholds. Without those payment allowances, Wolfe said, the future of the practice he shares with three other doctors would be dicey.
“The rural health piece has made all the difference to us,” he said. “It buffers us from the highs and lows. If they did away with it, if that happened, I think most rural docs would be in a heap of hurt. In rural America, we have an older population and that's who we see. I have (doctor) friends in the city who don't see much Medicare and they're flexible about who they see. That's not how we operate.”
For qualified rural doctors, Medicare honors a payment differential that comes closer to covering actual costs, Wolfe said.
That differential is calculated separately for each doctor or practice on a yearly basis based on revenues received and procedures performed. That calculation is then plugged into what is already a mind-numbingly complex formula for determing what doctors in various locations around the country will be paid for rendering some 9,000 computer-coded patient services or procedures.
Wolfe said his practice pays a consultant $4,000 to $5,000 a year just to prepare the annual submission to the Centers for Medicare and Medicaid Services (CMS), which certifies the rural payment bonuses.
A 2008 study by the Rural Policy Research Institute at the University of Nebraska Medical Center concluded that the bonuses increased revenues for rural practices or doctors by about $25,000 a year.
Impediment to planning
Wolfe said at his practice, they never know year-to-year what their rural differential payments will be, which presents some impediment to long-term planning.
"We could probably estimate what our costs are going to be as well as anybody," he said, describing the practice's business planning. "What we don't have is any guarantee or any great knowledge of what the (rural differential payment) limits will be next year or the year after that. We have no guarantees about that."
Despite that uncertainty, his practice invested in electronic health information technology in 2007, ahead of the federal incentives to do so that were included in the 2009 federal economic stimulus law. And to help recruit two new doctors to the practice, he and his earlier practice partner decided to put up and equip a new building.
"We couldn't recruit and attract doctors, if we didn't have the space for them to practice in so we kind of bit the bullet," Wolfe said. "That's a little more debt than we're comfortable with because we're going to retire in the next 10 years. It would have been nice to not have indebtedness and the ups and downs of non-reimbursement are more tolerable if you don't have heavy debt load. But we were trying to bring in services that will be helpful to the community."
Many critics of Congress' handling of the Medicare reimbursement formula have asserted that the uncertainty of it all will lead doctors to stop seeing Medicare patients.
But Wolfe said that won't happen at his practice because it is not a real choice.
“Because we're rural, we don't have any options. Half our patients are coming from the Medicare realm. That's just the reality,” he said. “We're not going to not take Medicare patients. But the problem then is paying the bills.”
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