Should You Opt Out of Medicare?

Ever-shrinking reimbursements, paperwork hassles and an uncertain future with healthcare reform are leading more physicians to abandon the nation's medical safety net for older Americans. Is it worth the financial risk and is it an ethical move?

By Vicki Gerson | Feature Articles | Spring 2010

 

Daniel Cosgrove, MD, an internal medicine physician, has been in private practice for 12 years and opted out of Medicare 10 years ago. The decision has allowed him to build a “personal health portfolio” for each of his patients. Cosgrove isn’t concerned about the national healthcare picture; he’s concerned about each patient he sees.

Daniel Cosgrove, MD, an internal medicine physician, has been in private practice for 12 years and opted out of Medicare 10 years ago. The decision has allowed him to build a “personal health portfolio” for each of his patients. Cosgrove isn’t concerned about the national healthcare picture; he’s concerned about each patient he sees.

IN 1945, PRESIDENT HARRY TRUMAN SENT A MESSAGE to Congress asking for legislation establishing a national health insurance plan, which created uproar. At the end of Truman’s administration, he’d backed off the idea for universal coverage. Two decades of debate ensued because opponents, like the American Medical Association, warned of the dangers of “socialized medicine.” Yet, administrators in the Social Security system and other leaders remained focused on the idea that such a program would benefit older Americans.

On July 30, 1965, President Lyndon Baines Johnson signed the Medicare and Medicaid programs into law in Independence, Missouri, at the Truman Library. For $3 per month, people 65 and older were told that they could sign up for Medicare Part B. The first to enroll? Former President Truman. So what has happened to a program that was supposed to provide senior citizens with excellent health care from our country’s physicians?

Today, doctors have three choices: accept Medicare payments, be a nonparticipating Medicare physician, or opt out of Medicare entirely. Many physicians are unaware of what being a nonparticipating physician means versus opting out. A nonparticipating physician is enrolled in Medicare, meaning the practice sees Medicare patients, but the physician hasn’t agreed to accept assignment for all Medicare patients. This allows the physician to bill the beneficiary “up front” for services. The patient then submits the bill and Medicare reimburses the patient rather than the physician for Medicare’s share. Opting out means the physician doesn’t enroll in Medicare at all and doesn’t fill out the forms patients need to submit to Medicare. The patient can’t bill Medicare for anything the doctor charges in the office, though hospital charges would still be covered. In essence, Medicare patients become cash paying.

Hassles and dissatisfaction

Attend a medical meeting or talk to other physicians and quite often there is a troubling discussion focusing on how unhappy doctors are with Medicare, and whether they should become   non-participating with Medicare or even opt out of the system entirely.

On November 18, 2008, the Physicians’ Foundation, an organization founded in 2003 and focused on funding research aimed at broad-based healthcare improvement, conducted a national study of practicing physicians. Of the nearly 12,000, the reported reasons for the widespread frustration with the Medicare system among primary care physicians and specialists included increased time dealing with non-clinical paperwork, difficulty receiving reimbursement, and burdensome government regulations. According to the survey, these issues keep them from the most satisfying aspect of their job: “patient relationships.” Specifically, 94 percent of the physicians who answered the survey indicated nonclinical paperwork has increased in the last three years and 63 percent of the respondents said this has caused them to spend less time per patient. Furthermore, 12 percent have closed their practices to Medicare patients, and 82 percent of the physicians said their practices would be “unsustainable” if proposed cuts to Medicare reimbursement were made.

Today, people on Medicare are facing a serious dilemma. A June 2008 report from the Medicare Payment Advisory Commission, an independent federal panel that advises Congress about Medicare, reported that 29 percent of the Medicare beneficiaries it surveyed who were looking for a primary care doctor had a problem finding one. This is an increase from 24 percent the year before. Furthermore, a 2008 survey by the Texas Medical Association found that while 58 percent of that state’s doctors took new Medicare patients, only 38 percent of primary care doctors did.

Daniel Cosgrove, MD, is an internal medicine physician and the owner of the Wellmax Center, a group practice based in the LaQuinta Resort and Club in La Quinta, California. Cosgrove has been in private practice for 12 years and opted out of Medicare 10 years ago. The decision has allowed him to take each patient and build a “Personal Health Portfolio,” instead of just asking, “What are you here for today?” Cosgrove says he isn’t concerned about the national healthcare picture; he’s concerned about each patient he sees. Approximately one third of his patients are of Medicare age.

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