The Mayo Clinic and Medicare

The media got it wrong in reporting about the Mayo Clinic and Medicare patients, but the inaccuracies actually provide a service because it presents an opportunity to discuss the issue of Medicare reimbursement and patient access.

Recent news reports stated that Mayo’s Arizona facilities would no longer be seeing any Medicare patients.  As the Clinic pointed out on its health policy blog, that’s not the case.  In actuality, the five-physician Mayo family practice clinic in Glendale, Arizona is conducting a trial during which it will no longer be taking Medicare reimbursement for primary care services.  Other health services at the Glendale clinic will still be covered by Medicare, but Medicare patients seeking primary care services will have to pay out-of-pocket.

The issue, of course, is low Medicare reimbursement levels that don’t meet the actual cost of providing care.  Mayo is not the only health provider pointing out this problem.  The Medicare Payment Advisory Commission reported in 2008 that an increasing number of Medicare beneficiaries were having trouble finding a doctor that would take Medicare payments for primary care services.  In one of the nation’s largest states, Texas, a survey by the state’s medical association found that only 58 percent of Texas physicians were taking new Medicare patients, and only 38 percent of the state’s primary care doctors were doing so.

One of the mind-boggling aspects of the current health reform debate came when policymakers advocated creating a government-run health insurance option that would pay providers according to current Medicare reimbursement rates.  They claimed doing so would save the system money.  What they never mentioned was that these cost savings come as a result of not paying doctors and hospitals the actual cost of the care they provide.  That’s not greater efficiency.  It’s simply underpayment, and those costs get shifted, in large part, over to private payers.

As Mayo pointed out on its blog, “Mayo Clinic loses a substantial amount of money every year due to the reimbursement schedule under Medicare.  The discrepancy between what Medicare pays and our cost of providing services is particularly acute for our clinics that provide primary care.”

This issue isn’t sufficiently addressed in the current health reform legislation.  In fact, in some ways, the bills moving through Congress will only exacerbate the problem by moving millions of Americans into the low-reimbursement Medicaid program.  This is a problem that must be addressed sooner rather than later or we’ll see a worsening of healthcare access for our nation’s most vulnerable citizens.