ACA Cuts Cause Doctor Practices to Flee From Medicare

As Medicare chips away at what it will pay healthcare providers, 1-in-10 doctors say they who own their own practices will start direct pay or concierge medicine in the next one to three years. This new data comes from a national survey of nearly 14,000 physicians by physician staffing firm Merritt Hawkins. Analyzing 2012 practice patterns, Merritt Hawkins found that 9.6 percent of practice owners plan to convert to concierge practices in the next one to three years.

The movement is across all medical disciplines with 6.8 percent of all physicians planning to go into the “direct primary care” business and stop taking insurance.
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“Physicians have been running for cover for several years now,” according to Mark Smith, president of Merritt Hawkins. “There is a lot of uncertainty in health care now and the only certainty is there is a lot of talk about cutting physicians fees. One way to get out of it is to go off the grid.”

The new report comes a few weeks after the so-called “doc fix” on Medicare payments in the fiscal-cliff negotiations by Congress. Although a 27 percent slash in Medicare payments to doctors was avoided, doctors continue to be disappointed that a permanent solution to the dramatic cuts is not in the offing. Under the sustainable growth rate (SRG) provisions of ObamaCare, doctor payments from the Medicare health insurance program are dropping at an alarming rate. The cost-saving measure is part of the more than $700 billion in cuts that helps fund the Affordable Care Act over the next ten years.

Approximately one in five physicians say they are restricting the number of Medicare patients in their practice. This figure drops to one in three primary care doctors, according to a 2010 AMA survey of more than 9,000 physicians who care for Medicare patients.

Under the direct primary care model attracting physicians away from Medicare payments, doctors contract directly with their patients. The services are free of insurance interference and can be offered at rates that average $50 to $60 per patient per month. The New York Times coined the new model “concierge for the masses” because it’s cheaper than the high cost of concierge medicine that Congressional investigators found to be $5,000 to $15,000 a year.

“If you can afford a gym membership, you can afford this kind of care,” Merritt Hawkins’ Smith said. The direct primary care model allows unlimited office visits and e-mail access to physicians for consultations. The primary care model cuts out the health insurer middleman, drawing heavy opposition from the insurance industry, including Aetna, Humana and UnitedHealth Group.

A proposal under consideration by Congress supports a pilot program that will provide monthly fee-based payments for direct primary care medical homes used by some Medicare beneficiaries. Supporters of the direct primary care approach, including Rep. Bill Cassidy, the Louisiana Republican and physician who introduced the legislation, see the pilot as a way to show Congress that the concept can provide quality medical care and lower Medicare costs.

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