Balance Billing is Key to Medicare Debate

With the fiscal cliff ever looming, Americans are faced with the daunting realization that many entitlement programs cannot continue under their current payment structures.  Medicare is one such program that will be affected if legislation is not passed by January 1st.  In order to stabilize the program, Medicare will cut 26.5% from physician reimbursement come January.  If this cut occurs, America will likely see a mass exodus of doctors currently participating in Medicare.  This means higher waits for doctors and poorer healthcare for Americans over 65.  The AMA sent a letter to Congress, urging them to stop the crippling Medicare pay cut.  In the letter, the AMA indicates that physicians would be willing to work with congress on “new” payment models.  I don’t agree with this politico speak as the proposed models of fashion are predicated on “cost sharing” amongst insurance companies, hospitals, and networks of physicians.  These models are doomed to fail because they insist that costs going forward are going to decrease (not a reality based in these rigged economic models).  This position of new payment models is not market based because it is requires that some groups take profits from others, and it necessitates more services and improved outcomes while insisting on the cost being lower.  This is not reality based. In the real world, you don’t get to demand more while paying less.


We go through this same debate every year.  The sustainable growth rate requires by law that physicians be cut, and Congress overrides this cut by passing legislation that stops it in its tracks.  This is what the AMA is wanting Congress to do again; pass legislation that stops the pay cut.  But does this really address the problem? This same predicament will repeat itself year after year unless realistic, sustainable action is taken to decrease the cost of Medicare on American taxpayers.  Most Americans realize that our current entitlement spending patterns are unsustainable, yet the AMA is not proposing any real changes that would decrease the cost of Medicare. They simply want Congress to stop the cuts so that the status quo can continue.

 A simple treatment that would help to cure this illness of unsustainable entitlement spending would be to allow balance billing among Medicare physicians.  Under this model, physicians would be allowed to bill patients for the difference in what Medicare is able to pay and what the physician needs to charge in order to remain in business.  This would allow the much needed Medicare reimbursement cuts to go through, while also allowing physicians to stay in business and continue to treat Medicare patients.  If this simple solution isn’t advocated for, I am worried that the Medicare crisis will be exacerbated.  Two things could happen: the cuts could go through and we would see a mass exodus of doctors, or the cuts could be stopped and America’s debt will continue to increase exponentially leading to higher taxes and an even weaker economy.

I urge all Americans that are concerned with the fiscal health of our great nation to write their congressmen with this demand; allow balance billing to return to the Medicare program.  This would allow the program that helps millions of Americans to continue, while not further straining our debt situation. A copy of the letter I sent to Congress follows.  Please consider using it as a template.

I am deeply concerned about the looming 26.5 percent Medicare physician payment cut scheduled for Jan. 1. Inaction by Congress and the White House in reaching a bipartisan compromise to avert the “fiscal cliff” and eliminate the sustainable growth rate (SGR) formula has created an unnecessary burden and high level of uncertainty for physicians’ practices and access to care for their patients.

The annual threat of cuts, short term patches, delays and partisan politics can not continue. 
If cuts go through I predict a massive exodus of doctors in the Medicare program. Allowing balance billing to return is the place to start. This method would allow the greatest remaining participation for both patients and doctors and is fair because it treats all parties involved the same. It also solves your budget problems immediately by allowing you to stick to your budget.  The government needs to stop agreeing to pay for every conceivable codified service “allowed” by Medicare when there isn’t enough “bread in the basket”. It also has to stop insisting on more services without a market based pricing mechanism. Our current shortages can be explained because the government chose to pretend it can determine the price for services while at the same time giving all beneficiaries “free/guaranteed” care. Please bring some sanity to Washington and to America by making this decision.
Raymond W. Kordonowy MD  

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