Medicare plans to cut reimbursements by 27% in 2012

Doctors facing 27% cut in their Medicare fees

Arizona Daily Star | Posted: Tuesday, November 29, 2011 12:00 am

WASHINGTON - Politicians of both parties outdo each other vying for the approval of seniors, but their inability to compromise on the federal budget has put Medicare in the crosshairs again.

Unless Congress acts before Jan. 1, doctors face a 27 percent cut in their fees for treating Medicare patients. That could undermine health care for millions of elderly and disabled beneficiaries.

Last year around the holidays doctors were looking at a cut of about 20 percent.

The cuts are the consequence of a 1990s budget law that failed to control spending but never got repealed. Congress passes a temporary fix each time, only to grow the size of reductions required next time around. The supercommittee's breakdown leaves the so-called "doc fix" unresolved with time running out.

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 it."

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 practice.

"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.