Medicaid/Medicare Medicare Physician Compensation

If you have Medicare, will your physician refuse to treat you?

In the not to distant future, the answer may be yes.

A report by Frazier and Foster (2009) examine how difficult it is for Medicare beneficiaries in Alaska to find a primary care doctor.

About 85% [of primary-car doctors in Alaska] choose the standard Medicare process (“participating”). Another 4% still work with the Medicare system but charge patients somewhat more (“non-participating”). The final 11% have opted out of the Medicare system , but will still see patients who agree to foot the bill.”

In Anchorage, however, fewer than three out of every four doctors accepts Medicare patients and only 13 percent of Anchorage primary care physicians accept new Medicare patients.

The reason why docs are refusing to see Medicare patients is that Medicare reimbursement is not sufficiently large to incentivize physicians to accept Medicare patients.  This is despite the fact that payments to doctors in Alaska are relatively high compared to Medicare payments in the rest of the nation.

In 2008, Congress set the Alaska geographic differential for ‘physician work’ at 50% above the U.S. average, effective in 2009. Alaska’s U.S. senators Lisa Murkowski and Ted Stevens were instrumental
in gaining that increase for Alaska doctors. But combined with the other differentials—set by CMS—the overall Medicare geographic differential for Alaska doctors in 2009 is 29% above the U.S. average.

In 2009, Medicare paid doctors in Anchorage $118 for a new patient, 30 minute visit.  This is 39 percent less than private insurance companies pay doctors in Anchorage ($187).

Who will see new Medicare patients in Anchorage?  The answer is safety net providers.

The Anchorage Neighborhood Health Center, which accepts all patients, saw twice as many Medicare patients in 2007 as in 2001. It has become the only choice for many of Anchorage’s Medicare patients.

Typically, most policymakers worry that Medicaid’s relatively low payment rates mean that a large share of physicians won’t see Medicaid patients; this issue may soon be a problem for Medicare patients as well.