For the Lay-Person: What Does the Medicare Cut Mean?

There are a few issues to look at here: how the cut will affect physicians and their practices and how the cut will affect patients and their access to care.

Physicians
Most physicians in Texas are small business owners. This cut is reducing the physician's gross income by 10.6%. Herein lies the problem: the majority of contracts between physicians and health plans (payors) base the fee schedule (how much the physicians are paid for each procedure) on a percentage of the Medicare fee schedule. For example, if Medicare pays 100%, the private insurance company might pay around 130% for the same procedure (each contract is different). Not only that, but current (pre-July 1 cut) Medicare rates are almost the same as they were in 2001. Imagine not only not receiving a raise in the last 7 years, but taking a 10.6% cut in your salary, especially in today's economy.

Patients
A recent TMA study shows that 58% of Texas physicians would be limited to the amount new Medicare patients they could treat if the cut goes through. Even worse, only 38% of primary care physicians could afford to take new Medicare patients and keep their doors open. This has severe implications on the access to care for Medicare patients.

To sum up, the Senate has decided to turn its back on Texas physicians and their Medicare patients and instead support legislation that will only further deepen the pockets of insurance companies. For medicine, this is not a left wing or right wing issue, this is simply a survival issue.


UPDATE: I have talked with many physicians and I realize that this post does not portray the severity of this cut on the physician salary. Put simply, the cuts, by hitting your gross, will cut the take home income by a much larger percent (eg: 50% overhead precut will result in a 20%+ cut in take home).