WASHINGTON (AP) — It’s become a symbol of sorts for the federal government’s
budget dysfunction: Unless Congress acts before Jan. 1, doctors will again
face steep Medicare cuts that threaten to undermine health care for millions
of seniors and disabled people.
This time it’s a 27.4 percent cut. Last year, it was about 20 percent. The
cuts are the consequence of a 1990s budget law that failed to control
spending but was never repealed. Congress passes a temporary fix each time,
only to grow the size of reductions required next time around. Last week’s
supercommittee breakdown leaves the so-called “doc fix” unresolved with time
A thousand miles away in Harlan, Iowa, Dr. Don Klitgaard is trying to
contain his frustration.
“I don’t see how primary care doctors could take anywhere near like a
27-percent pay cut and continue to function,” said Klitgaard, a family
physician at a local medical center. “I assume there’s going to be a
temporary fix, because the health care system is going to implode without
Medicare patients account for about 45 percent of the visits to his clinic.
Klitgaard said the irony is that he and his colleagues have been making
improvements, keeping closer tabs on those with chronic illnesses in the
hopes of avoiding needless hospitalizations. While that can save money for
Medicare, it requires considerable upfront investment from the medical
“The threat of a huge cut makes it very difficult to continue down this
road,” said Klitgaard, adding “it’s almost comical” lawmakers would let the
situation get so far out of hand.
There’s nothing to laugh about, says a senior Washington lobbyist closely
involved with the secretive supercommittee deliberations. The health care
industry lobbyist, who spoke on condition of anonymity because he is not
authorized to make public statements, said lawmakers of both parties wanted
to deal with the cuts to doctors, but a fundamental partisan divide over tax
increases blocked progress of any kind.
The main options now before Congress include a one-year or two-year fix.
The problem is the cost. Congress used to add it to the federal deficit, but
lawmakers can’t get away with that in these fiscally austere times. Instead,
they must find about $22 billion in offsets for the one-year option, $35
billion for the two-year version. A permanent fix would cost about $300
billion over 10 years, making it much less likely.
“It’s going to be a real challenge, and there’s not a lot of time to play
ping-pong,” said the lobbyist. “It’s entirely possible given past
performance that Congress misses the deadline.”
Congressional leaders of both parties have said that won’t happen. Senate
Finance Committee Chairman Max Baucus, D-Mont., says the Medicare fix is too
important not to get done. But how? The endgame for a complex negotiation
also involving expiring tax cuts, unemployment benefits and dozens of lesser
issues remains unclear.
“They have to come up with a solution, and they will have to appear to pay
for that solution, and that will be contentious,” said economist Robert
Reischauer, one of the public trustees who oversees Medicare and Social
Security financing. One option: cut other parts of Medicare. Another: trim
back spending under the health care overhaul law. A nonpartisan panel
advising lawmakers is recommending that doctors share the pain of a
permanent fix with a 10-year freeze for primary care physicians and cuts
followed by a freeze for specialists.
Doctors aren’t buying that.
The Obama administration says seniors and their doctors have nothing to
But doctors are becoming increasingly irritated about dealing with Medicare.
Surveys have shown that many physicians would consider not taking new
Medicare patients if the cuts go through. Some primary care doctors are
going into “concierge medicine,” limiting their practice to patients able to
pay a fee of about $1,500 a year, a trend that worries advocates for the
Ultimately, the solution is an overhaul of Medicare’s payment system so that
doctors are rewarded for providing quality, cost-effective care, said Mark
McClellan, an economist and medical doctor who served as Medicare
administrator for President George W. Bush. That continues to elude
threat of payment cuts has become a holiday tradition, said McClellan. “It’s
just not a very enjoyable one."