AAOS Now

Published 6/1/2007
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Alan S. Hilibrand, MD

Access to care for the elderly – An emerging issue?

For more than 40 years, the Medicare program has guaranteed access to health care for the nation’s elderly population. The program has protected senior citizens from the skyrocketing costs of American health care while working Americans shouldered more of the costs of their own care through rising premiums and copayments.

Recently, the Medicare program was extended to cover some of the costs of prescription drugs. This has led to huge increases in Medicare spending, which must be offset by controlling costs in other parts of the Medicare program. Unfortunately, the budget has usually been balanced at the expense of physicians, whose reimbursements have lagged behind overall inflation and the rising costs of medical practice.

In response, some surgeons have begun “opting out” of the Medicare program altogether. If this continues, seniors may begin to experience difficulties in accessing necessary orthopaedic care.

Medicare spending realities
At the heart of this problem is the fact that physicians are reimbursed from Part B of the Medicare program, which also includes certain biologics and chemotherapeutics. The costs of biologics and chemotherapeutics have continued to increase, and the government cannot do anything to prevent these increases. Under the current payment formula, however, these costs are one reason for the increases in expenditures that result in decreased physician reimbursements.

Spending on Part B grew at 14 percent per year until 1989, at which point Congress imposed a fee schedule and spending targets. Nevertheless, spending continued to escalate, and in 1999, Congress passed legislation that tied Medicare spending to the Gross Domestic Product (GDP) using the “Sustainable Growth Rate” formula (SGR). Each year the SGR formula has dictated reductions in physician reimbursement. Through extensive lobbying efforts led by the AAOS, Congress has rolled back each of these reductions, only to promise to pay for them in future years with greater reductions. It has become a fait accompli among politicians and pundits that in the future, much larger cuts in Medicare spending will be needed for the program to remain solvent.

The role of the AAOS
A long-term “fix” to Medicare reimbursement has always been the highest priority for the American Association of Orthopaedic Surgeons. The AAOS has advocated “fixing the formula” through two key steps.

First, remove drugs and biologics from Part B, because neither physicians nor the government has any control over these cost increases.

Second, tie physician reimbursement to the Medical Economic Index (MEI), which is a better reflector of the rising costs of medical practice than the GDP is. Interestingly, the MEI is the index used by Medicare to calculate rising reimbursements to hospitals under Part A. The AAOS position states that Medicare Part B reimbursements should be recalculated from the 1997 fee schedule with annual updates calculated using the MEI. Politicians always support this position in principle, but respond by asking “who will pay for the program?”

The beginning of limited access for the elderly
At last report (2006), more than 75 percent of all American physicians continue to participate in the Medicare program. This number should be considered an underestimation of the effect on access to care, however, because many participating physicians restrict the number of Medicare patients they will see on any given day in the office. Although these patients may experience a delay in obtaining care, there is unlikely to be any outcry from the politically powerful senior lobbies until access becomes even more restricted.

Specific Medicare participation numbers for orthopaedic surgeons are not available, but from the surgeon’s perspective, the economics of Medicare participation are troubling. Each year, reimbursement for Medicare patients falls farther behind the rising costs of running a medical office and maintaining medical malpractice coverage. On a financial basis, participation in Medicare is a poor decision for a busy orthopaedic practice that can fill its offices with patients covered by commercial insurance.

On the other hand, important ethical issues also must be considered. Dropping out of Medicare represents a refusal to care for our nation’s elderly population. It limits access to orthopaedic care for elderly patients in smaller communities who may not have any other options. For many of us, it would also mean no longer providing care to our parents, or perhaps even to friends and contemporaries.

Clearly, with no end in sight to declining Medicare reimbursements, many orthopaedic surgeons will struggle with the question of Medicare participation, which is going to be “On the Horizon.” We welcome your comments on this emerging issue.

Alan S. Hilibrand, MD, is vice-chair of the AAOS Communications Cabinet. He and his practice, The Rothman Institute, continue to participate in the Medicare program. Responses to this column should be sent to aaoscomm@aaos.org