January 15, 2007

Physicians who sign a Medicare participation agreement have the opportunity to change their minds once a year. Usually the deadline is December 31. But Congress has extended the date to Feb 14, 2007, so that physicians have the opportunity to consider changes to the Medicare Physician Fee Schedule (MPFS).

You have probably heard that Congress, in its dying gasps, cancelled the scheduled 5% fee cut. In fact, the cut was merely postponed, and a 10% cut is anticipated in 2008.

Additionally, physician fees will not be frozen at 2006 levels; only the conversion factor is. Your payments may be more or less because of changes in RVU-setting methodology, practice expense RVUs, limits on payments for imaging procedures, and coding "refinements."

The AMA keeps threatening that physicians will stop seeing Medicare patients if Congress doesn't turn back scheduled cuts. In fact, the only way that some physicians can continue to see Medicare beneficiaries, without courting bankruptcy, is to opt out of Medicare and see seniors as private patients.

Some physicians fear they would not be able to make a living because patients would abandon them and go elsewhere. But many have found that the majority of patients do value their services and also that their overhead declines substantially when they don't have to file claims, permitting them to lower their fees.

Reasons to consider becoming a Medicare Non-Participating physician:

• "Non-Par" doctors are allowed to opt out when they please; "Par" doctors first have to become "Non-Par," a chance that comes only periodically.

• "Non-Par" doctors, in most states, can charge a bit more.

• "Non-Par" doctors can collect the full fee up front. Patients get accustomed to paying directly. And huge accounts receivable need not accumulate.

• "Non-Par" doctors who collect at time of service are somewhat protected against abusive Medicare audits, during which their accounts receivable can be frozen for months or years.

Additional hazards for Medicare physicians include:

• Pay cuts to those who do not make huge investments in computer systems to track performance measures;

• Bounty hunters (private audit contractors) expected to "recover" $17 billion from alleged fraud and abuse;

• Implied contracts with Medicare Advantage Private Fee for Service (MAPFFS) plans (read on!).

Now being aggressively marketed to seniors are the new MAPFFS plans enabled by the Medicare Modernization Act that also brought Part D. There are dozens of such plans, including Humana Gold Choice and the "Any, Any, Any" Plan now available from Universal Health Care in eight states (Arizona, Florida, Georgia, Louisiana, Nevada, South Carolina, Texas, and Utah). Some promise "cash back" (Medicare will stop debiting enrollees' Social Security check for the Part B premium, $93.50/month).

The plans do not have a network. The patient may see any "provider" who meets certain qualifications, such as willingness to "accept Medicare" (that may mean having a participation agreement) and bill electronically. You need to find out what the requirements are before you agree to see the patient. Some plans may have an "implied contract" that you are "deemed" to have agreed to by seeing a patient!

In other words, it appears that you can't be like an "out of network" HMO provider. If you see a single patient, you might be bound by the provisions of the plan without ever seeing it, much less signing it. The New Mexico Medical Society brought a Resolution to the 2006 interim meeting of the AMA, asking for the legality of such implied contracts to be investigated.

You might be faced with the choice of (1) rejecting all MAPFFS plan patients, one at a time; (2) accepting whatever terms the plan imposes; or (3) opting out of Medicare and seeing seniors as private patients, for a mutually agreeable fee.

Claims are filed with the plan, not with the Medicare carrier. One sales representative, who was enrolling seniors for a plan, said it "guaranteed payment equal to or better than Medicare," with copays of $5 for a "GP," or $25 for a "specialist," including chiropractors and podiatrists. This suggests that the plan is not bound by the Medicare fee schedule and could deviate up or down.

It appears that the federal government is extremely eager to transfer its liabilities for Medicare beneficiaries for Parts A, B, and D to private companies, even at as much as $14,400 per person per year. Are the plans so much more efficient that they can easily afford to do without the Part B and Part D premiums, offering the amazing "$0 premium" plan?

Or will they simply do the government's dirty work of rationing care, or enslaving providers? It is rumored that grievances are piling up at a rapid rate. The plans' history is short, but potential subscribers are told not to worry about a plan's only being in business for a couple years. Medicare's endorsement is all that matters!

What You Can Do:

• Provide the informational flyer to your patients.

• Get the "welcome packet" from any plan before seeing a patient.

• If you did not receive our Jan 10 "News of the Day" on this subject and would like updates, send your email address to [email protected].

• Send us any intelligence you gather about MAPFFS plans.

• Take the first step toward freedom, if you have not already done so: become a "Non-Par" physician.