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Congress has agreed to a one-month delay in a huge payment cut to doctors who treat Medicare patients -- a short-term reprieve to a looming crisis over treatment of the nation's elderly.

In Minnesota, a growing number of doctors are refusing to take on new Medicare patients. Physicians have complained for years that Medicare doesn't keep up with the cost of delivering health care -- expenses that are driving some out of business.

Dr. Linda Marden, who runs a private neurology practice in the Brainerd Lakes area, said the Medicare program is so unstable that she's decided to shutter her practice at the end of this month.

"It's pretty much untenable for me to keep a practice up here," Marden said.

About half of Marden's patients are enrolled in Medicare. High numbers of elderly patients are common in rural Minnesota. In January, she will move to a larger and younger community in Alabama, where she'll have fewer Medicare patients.

Marden said that while the cost of providing health care has skyrocketed, the compensation for treating Medicare patients remains low.

"The truth is that for the last eight years we've been losing ground in terms of reimbursement," she said. "We've been getting less than the rate of inflation for a long time. We're getting about 40 percent less now than we were 15 years ago for Medicare in real dollars."

On top of that, doctors are worried about an additional 23 percent cut to their Medicare payments. That cut was supposed to take effect this week, but a Congressional delay has postponed it until January. 

Though it's often confused as part of the new federal Health Care Reform Act, the cut is actually part of a complicated formula approved by Congress in 1996. Since then, federal lawmakers have repeatedly postponed cuts to Medicare.

Lawmakers face strong pressure from the medical community, from groups representing seniors -- and growing pressure to cut federal spending.

That presents a tough balancing act for Congress, said Robert Kane, who holds the endowed chair in long term care and aging at the University of Minnesota School of Public Health.

"It becomes a political contest of wills in terms of how Draconian can one be in cutting back on costs and how resistant will the provider community be in using that cutback as a basis for reducing services," Kane said. "So we're at one of these shoot-offs at the OK Corral."

The Minnesota Medical Association recently surveyed its members and found that nearly 30 percent said that if the looming cut takes effect, they would stop taking new Medicare patients. Another 12 percent said they'd stop seeing Medicare patients altogether.

Association president Patty Lindholm said the cut would be devastating to Minnesota clinics and their patients, especially in rural areas.

"All of our Congressional delegation have told us they know that it's flawed, they know they need to fix this compensation formula, but nobody seems to have the will to do it," Lindholm said. "Medicare patients every year are, they don't know this, but they're just at the edge of not having medical care."

Policymakers are looking for answers at both the state and federal level.


A few years ago, Minnesota health officials created an initiative called "

" that provides financial incentives for doctors and clinics that adopt new practices to reduce costs. Since August, the initiative has signed up 39 health systems throughout the state. Another 100 are working toward certification.

State Health Commissioner Sanne Magnan said the initiative encourages providers to focus more on early prevention and health maintenance. Magnan recently learned the federal government will participate in the state initiative by allowing Medicare to be included in the reform effort.

"Medicare is trying to move to a different model of paying for something different," she said. "Instead of just paying for more visits, test procedures, hospitalizations, we're now moving to a payment model that rewards doctors and clinics for keeping people healthy and keeping them out of the hospital."

Minnesota is among eight states that will participate in the demonstration project with the federal Medicare program. That will allow Medicare providers to be reimbursed for things that used to go unpaid.

"This is a big deal," Magnan said. "We've been asking, pleading with the federal government to begin to look at different payment models. To have Minnesota be one of the eight states selected, is a big boost for our state and for rural Minnesota.

State officials hope to have 150 clinics signed on to the initiative by the end of next year. It will take several years to evaluate whether the program works better for Medicare patients and doctors.

Gallery

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Tom Robertson

Author

Physicians have complained for years that Medicare doesn't keep up with the cost of delivering health care -- expenses that are driving some out of business.

More Minn. doctors refusing Medicare patients over low reimbursements

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