This is a check for $20. You may click on it to see it larger. The check itself, that is, not its amount-it will still be worth just $20. What this $20 check represents to health care reform, however, is incalculable. Although maybe not for long.
This is a payment from the North Dakota Department of Human Services to a physician licensed and practicing in the state. It is payment for medical consultations for ten patients that, by the physician's estimate, accounted for about 25 hours of work time. (Those payment and time estimates do not account for the additional surgical procedures that several of the patients required.)
To render these services at the hourly rate of less than $1, this physician went to four years of medical school and did an additional four years of residency. For this work the physician was paid about $35,000 per year. The physician now carries a couple hundred thousand dollars in school debt and faces annual malpractice insurance costing tens of thousands of dollars. (Doctors elsewhere, and in other practices, pay a multiple of this.) Maintaining a staffed clinic is not cheap.
The insidiousness of the tactic at work here is not immediately evident. Politicians get heartburn when faced with cutting funding for Medicaid (or, especially, Medicare). It makes them look like scumbags. But they need to save money somewhere and they will try to do it on the backs of the most destitute and poor (who probably don't vote anyway) before proposing any tax increase at all. And a more politically expedient and villainous way to cut Medicare and Medicaid expenses is to allow cuts in physician reimbursement.
What this does is force medical professionals to be the bad guys. They can choose to provide services at a loss-or be assholes and choose not to. Not surprisingly, patients who could get a doctor last year but cannot this year come to see the doctor as the problem-not the underfunded program and the legislators who make it so. This scam also unnecessarily stresses doctors, especially a shrinking pool of primary care and family practice physicians, who seldom go into the profession for the money.
Adopted by Congress in 1997, the same year Cameron gave us Titanic, the Sustainable Growth Rate formula is a method for legislators to prevent Medicare and Medicaid payments from growing too quickly. The SGR formula affixes physician reimbursements to changes in the gross domestic product. As health care costs wildly outpace GDP growth, the SGR formula actually functions as a reimbursement cut.
Congress has avoided any actual cuts by repeatedly voting for extra funding. (Of course, there have been cuts in the form of cutting coverage; the cheapest reimbursement is the one you never have to make, right?) But after years of avoiding it, the SGR formula is now in debt-more than $200 billion-and dictates a 21% cut in reimbursements. This will happen in March unless Congress votes for the health care reform bill or passes a special funding override (again).
Indeed, a great deal of the American Medical Association support for reform that the Democrats so enjoy trumpeting is because of promised permanent SGR reform. In this leaner economic climate, passing this spending is tougher and has already failed once in the Senate. With a new distribution in the Senate, spurring another round of posturing over reform all over again, time is running out.
Part of what Republicans shamefully call an increase in spending in the House's health-care reform bill is actually just a canceling of the SGR cut. So this "increased spending" is basically just a market-determined funding of Medicare and Medicaid. That is important to know because one in every four Medicare patients is now having trouble finding a primary care physician.
As reimbursements shrink, fewer physicians are willing to take on new Medicare/Medicaid patients. The Mayo Clinic, that bastion of medical service held up as a model, even by the White House, of "how it can work"? It is no longer accepting a number of Medicaid and Medicare patients.
In some cases, after factoring costs, physicians are paying to provide treatment. Is any fan of market economics willing to step forward and defend such a system? Should one blame doctors for altogether stopping care for so many when it produces a loss?
Many don't care. Politicians get to deliver on pledges of "no tax increases." And poor and old people? Who gives a shit about them anyway, right? The poor ones are probably poor because of something they did (they should go get a job with health insurance, right?). Everyone wants a entitled handout! And the old ones should be lucky they get anything at all.
For those who feel or act that way, they should ask themselves: do you "support the troops"?
Health care reimbursement for military retirees and dependents of both active and retired servicemembers through Tricare, run by the Department of Defense's Military Health System, is based on the same Medicare SGR formula. Failure to change this formula either via the reform bill or through another permanent solution is fundamentally an unwillingness to provide the troops with a reliable system of health care.
Sure, call the AARP a self-interested group of fogies... just like The Military Officers Association of America, which considers the potential cuts an emergency action item.
You don't support Medicaid/Medicare SRG reform via the House health care reform bill or through other permanent spending increases? Then you don't support the military.
Of those ten patients mentioned above, for which the physician received that check for $25, sure enough, one of them was military. And the North Dakota physician did not receive the check just by itself. It was accompanied by a letter that said that, effective Jan 1, 2010:
"ND Medicaid will no longer allow/reimburse physicians (MD/DO) and other non-physician practitioners for outpatient and inpatient consultations."
So from here on out, that $1 per hour rate of patient care, if considered a "consultation," will now be reimbursed at the rate of $0.
"Ethically I'd feel terrible to drop them," the doctor said. "I'd probably take as many as possible. But I would still need to pay my bills. There are costs. I can't treat them from a tent on my lawn."
Abe Sauer most recently wrote about USC's branding trouble and the right's take on Obama's first year.
Abe's pieces are consistently the most enlightening and maddening reading I do all day.
Amen to that.
Abe is quite possibly the Robert Frank of North Dakota.
Thank you for this.
Yes, excellent and factual and very clearly written piece.
I'm kind of dumb. I haven't been following the health care reform debate as closely as I should, and while I have a general impression that physician reimbursements from Medicare and Medicaid are not keeping up with market rates, I have no idea what those providers are actually paid.
So this $20 for 10 patients thing, it's surprising and upsetting!
So I tried to find the ND reimbursement schedule. It's here:
http://www.nd.gov/dhs/services/medicalserv/medicaid/provider-fee-schedules.html
I don't know what all these codes stand for! I've done a little Googling and guesswork, and I have found that there are items (J7611, which seems to be a single dose of albuterol) is reimbursed for as little as 4 cents. I have tried to locate the appropriate code for an outpatient consultation, and they seem to be more in the range of $49-$100. But maybe I have the wrong codes! (I'm looking between 99201 and 99245).
It's not that I am going out of my way to disagree with you. I believe in paying physicians a salary that reflects their expertise and training! I believe in Medicare and Medicaid! But I guess I am having trouble believing in a $20 reimbursement for 10 patients requiring 25 hours of consultation. Help me believe.
This is what I mean by labyrinthine! (Frankly, and this is maybe the
WHAT? Let's try that again! This is maybe the inverse of my point below, but it could be that this particular doc, or his staff, aren't sufficiently well-versed in reimbursement procedure to get all they're entitled to?
I want to believe that's what the problem is, not that $20 is the appropriate reimbursement rate for seeing 10 patients.
Of course, it's not really a happier situation when doctors can't get paid because they can't figure out how to bill the system appropriately, either. It's just a different bureaucratic villain.
kitten, I received a lab bill for an office visit from 2008 for $305 about a month ago. I called my insurance company to ask them about it and whoever was doing the billing used the wrong codes. Now I have to see if I can get the $150 I paid in 2008 that was mostly likely a mistake as well.
Remind me why we as a Nation put up with this sort of shit again?
Because we as a nation are a bunch of unhealthy, selfish morons who have been systematically disenfranchised and undereducated. Even if we wanted to do something (which we don't, 'cause Lost is on) we couldn't (because we have been shut out of the system). Now shut up and vote for someone who hates your guts.
ohyeah.
While I realize that this isn't the focus of the piece, it's important to also note the huge impact fraud makes on Medicare and Medicaid spending. Having done a good deal of False Claims Act work, I've seen that this is one the largest -- if not the largest -- areas where all sorts of folks are gaming the system. The regs and reimbursement procedures are absolutely labyrinthine, and so are extremely susceptible to abuse.
Monetarily, of course, the vast majority of unlawfully claimed funds go to pharmaceutical companies. But for every doctor who's honest and getting screwed by these effective cuts in reimbursement, there is at least one, I'd bet, who is willfully cheating the government out of money.
This is a very good point an true though I'd debate the one for one statement based on my own experience (i have no immediate #s).BUT...
One of the ways that happens is that hospitals that take Caid/care patients have a separate coding and billing dept. AND private clinics that do this on teir own don't always have professional medical coders because EXPENSIVE.. (hey kids, want a (boring but) secure future job? Medical coding school) and to tool through the (well said) labyrinth of reimbursement codes makes the whole ordeal even more per-hour-costly to the MD who sometimes then does one of two things: Codes for the procedure she/he knows about (maybe more $) or forgets it altogether because, who needs the hassle (after which he/she stops taking these patients altogether because, who needs to hassle).
A lot of medical coding jobs are being shipped off to India so you might not want to take that up as a second career just yet.
Very true and good point, also! Something else that factors in cost-wise is that, because of the expense of having your own in-house billing department, a lot of individual docs will send out their paperwork to independent billing companies that might not know or care enough to ensure that all possible areas of reimbursement are covered in their submissions to the govt.
Larger companies/physician conglomerates/what-have-yous can afford to not only do in-house billing, but to potentially even "push the envelope" to get reimbursement for something for which govt coverage might be "questionable." They can also then afford the lawyers to back up their claims if the govt comes back & questions those submissions. (The greatest danger to an individual MD being the risk of becoming completely ineligible for Medicare/Medicaid reimbursement because of a finding of fraud.)
I think what we can agree on here is that the existence of fraud shouldn't be a reasonable excuse to keep the system from paying market rates thus ensuring people who are covered can actually get service. The fraud excuse is often used as a argument against funding the program as it should be which is absurd.
Agreed!
(See, we all can get along.)
Thanks for piece Abe.
I fail to see how any reform trying to "bend the cost curve" is going to make any of this better.
Medicare/Medicaid is often touted by proponents of single payer as being a superior method of providing health care access because it's cheaper. This would seem to argue otherwise.
If Medicare is expanded to all US Citizens what's to stop our entire health systems from having to deal with this kind of reimbursement cut? The net result being a cut in salaries for doctors and a decrease in people willing to go through the training necessary to become one.
Well, te 2 things aren't totally connected. First, what I'm talking about her, for now, is the SGR formula. Reforming that isn't going to immediately make medicare/aid cheaper but it is going to make sure doctors keep taking it (Otherwise you;re creating a while new population who, while "covered," is for all practical purposes really another uninsured group.)
The single payer expansion argument is a little different in that it gives the gov't (the insurer) HUGE bargaining power and balances its insurance coverage by having the young with little need for services paying into the system. Now the gov't coverage ONLY handles the most expensive population.
But the SGR is kind of "bend the curve" legislation that Orzag et. al. are trying to get expanded no? Who's going to push for reform on this?
HUGE bargaining power with who? Doctors? As you rightly point out it's a hell of lot easier to cut reimbursements than raise taxes so why not pursue the path of least resistance.
It's important to be clear about the distinction between Medicaid (low-income parents and children, generally not available for single people) and Medicare (for old people). Medicare's rates are set by the federal government and they are in general much higher than Medicaid's. Medicaid is a joint federal/state program, so its rates (and eligibility) are among the first things states cut when their budgets get crunched. Access to providers is a much more serious problem in Medicaid than in Medicare, though Mayo's decision is obviously troubling. AARP has 40 million members. Who lobbies for Medicaid? (Incidentally, health reform would take important steps to keep Medicare solvent for longer.)
When it comes to cost control, HOW care is paid for is much more important than what program pays for it (Medicare vs. private insurance). Right now, it mostly gets paid for on a fee-for-service, pay-as-you-go basis, which encourages more and more care, which isn't necessarily the same thing as more and more health. The health reform bills have in them all the good ideas that health economists and doctors and policy people have had for how to organize care more/better and pay for it in ways that encourage the most effective use of resources, including more appropriate use of (cheaper and cost effective) primary and preventive care. These would be applied to both Medicaid and Medicare.
Just another plug to call/email your congressional representatives and tell them they have to pass healthcare reform - and that it should be the Senate bill, with all this good stuff in it. And now I promise never to write another comment this long.
VERY good point. For example, ND pays 32% of Medicaid expenses. So when states are states are going bankrupt, cutting state funding of its portion of Medicaid (OR cutting reimbursements, see article above) is a HUGE option.
I kind of stopped reading after the second or third "Republicans oppose spending..."
At some point very soon, reasonable people are going to have to
start punching Republicans and Libertarians in the ballsinform less reasonable people how this whole "civilized society" thing works:1. If you happen to be running the U.S. government during an economic catastrophe, then you spend your way out of it, even if that means increasing the national debt. See Franklin Delano Roosevelt.
2. People are not commodities. Therefore, the Employee Free Choice Act must be passed by Congress immediately, and the Clinton-era decimation of our societal safety-net must be undone.
3. The environment is not a commodity. Fuck "green jobs" and "cap and trade." Create a sunset provision on fossil-fuel-based companies and utilities. Past a date certain, let's just say 2020, no more dinosaur bones get burnt in the name of Jersey Shore
Spending your way out of it? You mean like passing a
$775 billion dollar spending package? I heard something about that a while ago... no one really talks about it anymore. Not sure why.
Maybe if we all unionize that would solve it!! I hear the auto and steel industries have great unions. We should talk to them.
If can get the first two done then we can all become unionized rickshaw drivers. Like in China!
Maybe we can sarcasm our way out of it (!!!!)?
1. Sarcasm
2. ????
3. Profit!
Like Chinese rickshaw driverzzzz Right! Because in China, workers drive rickshaws!
If 3/4 of a trillion dollars isnt enough to kickstart an economy, then we are in trouble. There was really no need to float a trillion dollar deficit this year, if the US would simply reduce its foreign policy commitments there would have been alot of found money to put into the economy. Moreover, the one thing that has kept the US treading water and not nose-diving into a Great Depression is the liberalization of trade since the Smoot Hawley Tariff took a bad situation and made it god awful.
ECFA, in its current form is bad business because it puts the worker in the sad position of either pissing off the boss or pissing off the co-workers. The real problem with the current NLRB
The real problem with the current NLRA is the colateral, non-card check, issues involved in the process. The NLRA limits Unions organizers' contact with employees and does not have not strong enough penalties for employer tampering. All of which are in the ECFA but all get drowned out by the "card check" bullshit. There is nothing "free" about a public ballot, you know why the Gilded Age was so corrupt: public ballots.
Calling for a moratorium on fossil fuels is a very Luddite sentiment. The fact is the world does not have the technology (wind, solar, tidal) or the courage (nuclear, geothermal) to take the necessary steps to provide an alternative energy based power grid. Cutting off fossil fuels would put the US into a dark age, without enough energy to support agriculture, transport or communications. Are you ready for living the life of a 13th Century peasant?
The more I think about this piece, the more it bothers me. I hunted down the letter from ND Medicaid you selectively quoted above, which makes it clear that the tiny reimbursement is the result of a coding issue, not a policy decision to deny providers compensation for their services. It goes on to note:
"Physicians who bill consultations (99241-99245 or 99251-99255) after January 1, 2010 will receive a denial indicating the ND Medicaid will not allow/reimburse this code. The provider may resubmit a claim with an appropriate code and may not bill the patient for a 'consultation' service billed with 99241-99245 or 99251-99255."
Another thing. You note that "The SGR formula affixes physician reimbursements to changes in the gross domestic product. As health care costs wildly outpace GDP growth, the SGR formula actually functions as a reimbursement cut." According to the Centers for Medicare and Medicaid Services, Medicare/Medicaid reimbursement represented 34% of all health care expenditures in 2007. Surely controlling the rate of growth in 1/3 of all health care expenditures will exert some downward pressure on prices? Plus also are providers' expenses growing at the rate of health care costs, or at the rate of overall inflation? Their expenses are based on staff salaries, the cost of supplies, rent, utilities? Are these items growing at the rate of health care costs, or at the rate of inflation?
I'm definitely not an economist. I don't know. I'm asking for clarification.
I understand that providers who treat Medicare and Medicaid patients often cannot treat them profitably--and not a small part of the reason for it is that they have to spend so much money and time on managing the billing process. But you misrepresent the problem when you claim that ND Medicaid reimburses providers at $1/hour.
It should bother you. But.. First of all, that's not the letter that was with the check. I'll scan it if you'd like but it will take a day as I don't have a scanner nor immediate access to the letter.
It is not "selectively" quoted despite what your Google search tells you. I know Google is the end all be all of research but....
And I think if you look at the piece carefully you'll notice that I did not say physicians would not longer be compensated at all for services. It's that the system is no longer reimbursing "consults" which is making it more difficult for them to get compensated for "consultations" because they need to come up with a specific billing code for these consults (and, don;t let it be over the phone b/c that certainly won't be reimbursed).
As for the second part, the fact that the service represents that percentage of expenditure does NOT exert downward pressure. In fact, to make up for the losses, overall prices go up. I think you should look into this a little more at length.
Again, I do not think anywhere above I stated that Medicaid reimburses at the rate of $1 or less per hour. I presented an individual anecdote where certain consultations w/ a physician were paid at that rate. I noted that other surgical services following these consultations were not included in this rate (though they were far from lucrative). I understand the confusion. It IS confusing and often boring which is why many people don't give a shit or find it very easy to find the immediate reasons this kind of thing must be a mistake.
I'm not a physician, I don't personally know anyone using Medicaid, and I'm not in North Dakota, so the only resource I really have at my disposal is Google, unfortunately.
My own anecdotal experience with Medicare seem to indicate that it's true that physicians can't see Medicare patients profitably--members of my family have been dropped by their longtime doctors once they started using Medicare. Whether the issue is the lower rate of reimbursement compared to private insurance, the added expense of managing the billing, or some combination of those things and other factors, I don't know. I have zero confidence in my ability to use the few Internet-based tools at my disposal, but when I searched for the Medicare reimbursement rate for 99201 (Office/outpatient visit, new) in North Dakota, I found that the fees quoted are even less than ND Medicaid pays.
Which is all to say that I think I might passionately agree with your conclusions! But I'm tripped up by the rhetorical flourish of this $20 check, because while I can find evidence of a billing code change for "consultations" and "evaluation and management," I can't find evidence that ND has stopped paying for Medicaid patients' doctor visits. And I feel like a crank, that I'm continuing to post comments about an issue I know very little about, so now I'm going to let this go.
Again, I'm not sure how you concluded that the anecdote above translates to Medicaid visits being unpaid. It simply means Medicaid is making it harder for doctors to get paid, especially for "consults" which are often hard to define yet take up real time during the day. Does that make sense?
ALSO, the above is an extreme example meant to frame the problem. The real takeaway here should be the rate formula, that it impacts military families ("the troops") as well as pathetic medicaid patients health-care opponents don't care about. Even if the new senate changes mean that we start ALL over with a reform bill, the SGR formula issue MUST be addressed before March or many many people who reply on Tricare, Medcaid or Medicare are going to find it even harder to find a doctor which, essentially, is creating a whole new population of uninsured.
I had an interesting experience with the UK's National Health System yesterday. I have a bad sinus infection/earache and clearly need antibiotics (once, in college, my friend has this exact problem; she didn't have insurance, and I still had access to the shoddy student clinic, so I went in and faked being sick to try to get an amoxicillin prescription. Instead I was given one for cough syrup with codeine).
This time around, because I haven't registered with a GP, I ended up in a walk-in clinic. Aside from a small, polite sign noting that they couldn't prescribe methadone, it was as clean and and pleasant as any doctor's office I've ever been in. I was a little worried because I'd forgotten my wallet and had no ID, money, proof of citizenship, etc. No problem! Before I could finish my little cup of water, I was ushered into the doc's office, got my prescription, and walked out. The whole thing took maybe twelve minutes.
At the pharmacy, I noticed a sign that said in big letters "Notice: due to the such and such act all prescriptions are now £7.20. (unless you are on income support etc.)" I asked the pharmacist: indeed, ANY prescription, even a £500 course of specialist medication, will cost the end user £7.20. By the time I arrived home with my drugs, the total time I'd spent in contact with the health care system was still under half an hour (if I was in America, I'd still be reading magazines in the waiting room).
The "medical coding" profession does not exist here, and neither establishment has to employ a billing person or deal with insurance companies. This is the main reason why the UK system costs 40% as much as ours, and people here live longer, healthier lives and don't go bankrupt when they get sick. It's also why opposition to health care reform in the US is hard to explain as anything other than WILLFUL ignorance, or maybe some sort of Freudian death drive...
What was not mentioned about the SGR is fraud. Fraud was a variable that was omitted from the original construction of the formula.
If you take notice, those in strong opposition to any type of health care reform are, in some shape or form, are directly connected to the industry of fraud, the largest industry of fraud being in child welfare.
Child welfare is not limited to foster care and adoption, it is also in the Child Health Insurance Program (CHIP). Due to Freedom of Information Act exclusions and exemptions, statutory protections of the child welfare industry nurture the flourishing of fraud, with Medicaid fraud being the largest portion of unregulated funding.
Medicaid, in child welfare, funds Targeted Case Management, a non-medical portion of child welfare. Reviewing just a sample of the States federally documented estimates of fraud, the numbers could easily surpass the SGR formula of debt, "more than $200 billion, annually.
There are provisions contained in the Health reform bill that address the aggressive approach to ending Medicaid, Medicare and Tricare fraud, which is the creation of a new industry and jobs.
Most of the job creation will be around information technology and progressive agendas on the way we provide care by moving away from institutionalization (i.e. hospitals).
The political factions choosing to promulgate their fallacies against health care reform should be viewed in a positive light as they demonstrate the need to be led, by the hand, out of a 17th century mentality of human worth, to the 21st century of ethics, starting with information technology to end fraud.
Beverly Tran
I keep coming back to the mind-boggling complexity of the entire scheme, and I can't help but feel, in my simpleton's heart, that this entire system, its structure, its process--its purported reform--is a shell game to protect a shifty cohort of vested, powerful interests.
One day you Patriots will be old and sick and BlueCross is going to tell you to shove it. Then you can look across the waiting room and ask Sarah Palin to heal you.
Keeping in mind that I'm very in favor of health care reform that most would consider far more liberal than what currently seems to be proposed, isn't this half-sentence the current root of all the problems?
"As health care costs wildly outpace GDP growth..."
No. It is a symptom of the root problems.
Well, I guess I would agree that it is caused by the underlying structure, but I still see this as the main problem. Have you ever looked at a doctor's office bill? It's like $300 dollars for me telling him what disease I have and that he needs to write a prescription! (I'm obv not on Medicaid in North Dakota.) In addition, I'd like to suggest that the inflated cost problems are so severe that the fixes we would like to make to the overall health care system aren't really financially feasible.
But that's just it, they ARE feasible because the costs you put off up front, thinking massive reform isn't financially feasible, WILL end up costing you in the long run (and more). For example, the SGR formula fix was on the table several years ago for something like $45 billion. Nobody wanted to spend the money so now it's $200 billion. And now nobody wants to spend anything again. Like any ponzi scheme, eventually somebody has to pay the piper, and by continuously avoiding it, it only gets more expensive.
The trouble with this SGR thing -- and what I was getting at with my long-winded personal anecdote -- is that you can't fix the system by fiddling with the parts. The complexity IS the problem, by and large. The transparent, well-functioning markets that keep us supplied with inexpensive, high-quality iPods and home-delivered pizzas are simply impossible in health care.
Our whole system of pretending to set it up like a market just creates massive opportunities for A. Fraud and B. Rent-seeking by individuals and organizations with better access to information (large insurance companies, well-staffed specialist practices). And FYI, while A is a big problem, B is *at least* an order of magnitude greater. Also, fixing B has the happy side effect of eliminating A. I can't even imagine how one would defraud the NHS, though according to their Counter Fraud Service, "Among the more recurrent kinds [of fraud] are staff and professionals claiming money for shifts not worked, patients falsely claiming exemption from optical, dental or pharmaceutical charges and staff working in unauthorised jobs while on sick leave." In other words, the same shit that goes on in any large organization, not a systematic, $14-30bn a year fleecing like we have with Medicare.
What we really need is politicians who can speak like adults on the issues we've elected them to deal with. So, um, have fun with that guys... I'll just hang out here until you've got it all sorted out!
The check and story were good... the commentary a bit way off base in my opinion.
There is NO FREE MARKET in health care as we know it today. What we have of any market is highly distorted and driven by several phenomenon all of which are the fault of the government.
I highly recommend people search on YOUTUBE the campaign for liberty's OPERATION HEALTH FREEDOM videos.