Even though it appears that Congress is about to stop the planned Medicare fee cut for 2003, expectations of lower Medicare income have already forced many physicians to consider dropping participation in Medicare to raise their reimbursements.
Physicians who go "non-par" can charge 9.25% more than participating doctors, but they also face major disadvantages as they close in on the Feb. 28 deadline for making the switch.
In most cases, non-par physicians have to collect the whole bill from patients, which means higher collection costs that could wipe out added revenues, says Dave Gans, practice management resource director of the Medical Group Management Association.
Also, Gans says patients have to pay more, which could prompt many of them to switch doctors. Patients of non-par physicians will be reimbursed by Medicare for its share of the bill, but at a rate 5% less than Medicare pays for participating physicians.
When physicians bill at the higher non-par rate, patients have to make up the difference.
These problems have put off many physicians who initially considered going non-par.
Non-par status "would be a nightmare," according to John Schaeffer, M.D., at the North Ohio Heart Center, a 25-physician group in Loraine, Ohio. "Instead of having one payer, I would now have to go to thousands of little payers."
And although cardiologists have been hit particularly hard by the Medicare payment cuts, Steve Noller, M.D., a solo cardiologist in Macon, Ga., says he will not switch. He says 75% to 80% of his patients are in Medicare, and "if you threw participation away, patients would go somewhere else."
The Mayo Clinic in Jacksonville, Fla., went non-par on Jan. 2. It has the advantage of patient loyalty to the Mayo name. Yet even so, it undertook an elaborate education process to prepare patients for the change, says Erik Kaldor, a clinic spokesperson.
The clinic sent out letters to 40,000 patients, distributed tens of thousands of copies of a how-to booklet on billing changes and held seminars that were attended by nearly 2,000 patients, he says. The clinic also hired 15 additional people in its bill-collection department because "now we have to collect from thousands of patients."
Kaldor says the clinic made the switch because other Mayo clinics already are non-par and because it was losing money on Medicare. Last year, he says, Medicare reimbursed Mayo-Jacksonville 30% of its cost for services to Medicare patients.
Meanwhile, many more physicians are making plans to limit Medicare patients in their practices.
The AMA reports that in a December online survey, 48% of physicians said they will begin or continue limiting Medicare patients in response to the impending fee cuts.
"People are very reluctant to go non-par, but a lot of them are doing things like not taking Medicare patients, not taking people over age 62 who are going to become Medicare patients, or limiting the number of Medicare patients per day," says Jesse Bushman, government affairs representative for the MGMA in Washington, D.C.
Judy Corwin, spokesperson for the Corvallis (Ore.) Clinic, a multispecialty medical group of 80 physicians, says the clinic has stopped accepting new Medicare primary care patients.
She says Corvallis is still accepting Medicare patients for specialists because, in many cases, the practice is the only specialty provider in the area and patients would have no other local options.
While many physicians have discussed going non-par, few have considered the more drastic step of dropping out of Medicare altogether, Gans and others say. While dropping out allows physicians to charge the patient as much as they want, patients must pay the entire bill, and physicians have to wait two years to come back into Medicare, they say.
Compared with opting out, non-par status is actually flexible. Kaldor says Medicare will report the non-par's claim to the patient's supplemental insurance carrier, as it does for participating physicians, but only if the patient has "automatic crossover" supplemental insurance. In other cases, patients themselves will have to send the claim to the supplemental insurer, he says.
CMS officials say non-par physicians have the option of "accepting assignment" on a particular bill. That is, they can bill Medicare directly for that claim, but they will only receive 95% of what a participating physician receives.
The complications of going non-par have spurred a steady rise in Medicare participation from 62.1% of all physicians in 1993 to 89.6% in 2002, according to CMS. For those who are still considering non-par status, Gans and others say practices should have a waiting list of at least six weeks to make up for a projected loss of patients. They also should have a strong billing department, because it costs $1 to $2 each time to send one bill to a patient.
Arlene Brown, M.D., a solo family physician in Ruidoso, N.M., and board member of the American Association of Family Physicians, recalls that when she was non-par 20 years ago, patients would cash their checks from Medicare and not pay her. She says even her father, who worked at Los Alamos, spent his Medicare check.
"Patients won't be able to figure out the explanation of benefits," she says.