Granny Snatching: Doctors’ Fees and Tax Breaks; Connecticut’s Seniors are Tied to Federal Tax Maneuvering

When you are worried about the winter weather and increasing heating and grocery bills it is understandable if you don’t pay close attention to the interminable arguments in Congress over this bill, that legislation and the latest increase or decrease in the tax rate.

But Connecticut’s seniors are directly affected by much that happens in Congress even when the media seems to be reporting on something else.

For instance, much of the month of February was devoted to yet another clash over whether to extend payroll tax cuts, and if so, for how long. That dispute was settled by extending President Bush era tax cuts until next December, after the federal elections.

Ron Winter

Another facet of the same agreement, regarding doctors’ Medicare reimbursements also was extended. The two issues may not seem to be related but the tax rate that was cut actually funds Social Security, another major issue for the elderly, and eventually that money will have to be made up somewhere – possibly through health care cuts – which already are expected to pay for the revenue lost through the tax cuts.

The bill passed by Congress – informally known as the “Doc fix” – is only a temporary solution for the formula that is used to calculate what Medicare pays to doctors. The formula that is currently in place will remain so for the next 10 months instead of cutting the reimbursement rate by 27 percent. The estimated $18 billion needed to pay for it reportedly will be taken from other health care programs that apparently have yet to be determined.

The dispute over Medicare reimbursements goes back to 1997 when Congress enacted the “sustainable growth rate” formula, which sets annual limits on how much Medicare can pay doctors. If those limits are exceeded the formula reduces the fees that will be paid in following years.

Critics of the system say that doctors make up for the reductions by performing more tests and procedures which increases the Medicare costs. Holding fees at current levels instead of reducing them is estimated to cost about $300 billion over the next decade.

Congressional advisers are calling for a compromise that sets a new schedule of fees and requires $200 billion in savings over that period. The remaining $100 billion would come by cutting the fees for specialists by 5.9 percent a year for three years and then holding them steady.

And that is a major sticking point. Most elderly patients require specialized care at one time or another and the cost of educating specialists is horrendous. Many doctors say that cutting the amount that specialists can charge for their services and closing off other forms of income will result in a severe shortage of qualified medical professionals in the coming decades.

A physician I spoke with recently noted that it costs $200,000 just to pay for four years of medical school that in itself is only the beginning of a career that then requires a 3-year residency – a form of apprenticeship – during which the aspiring physician works 80-hour weeks at low pay.

Going on for specialized training – being qualified to implant a pacemaker for example, which requires a total of 9 years of training – can take physicians into their mid-30s to nearly 40 years old before they can begin to work at a rate that will pay a living wage. By the time doctors have attained that level of specialized proficiency they also are likely to owe hundreds of thousands in additional debt.

Rates paid for medical care are just one of many issues now being debated as the percentage of elderly in the American population increases and the cost to medical providers spirals out of control.

Fierce Health Finance recently reported on a story from Kaiser Health News that many hospitals now are requiring pre-payment for emergency room visits by patients who don’t have a serious medical condition. Kaiser says that HCA which operates hospitals in 20 states and overseas recently began charging a $150 upfront fee for non-emergency visits to emergency rooms, and as a result tens of thousands of patients leave without paying or seeking care.

At least half of the nation’s hospitals now charge upfront fees according to some reports, which also note that hospitals are changing their policies to reduce uncollected debts incurred by treating patients with routine medical issues in emergency rooms or from those who aren’t covered by medical insurance.

Nonetheless, some patient advocates don’t like the new collection policies and say that up to 7 percent of patients who come to emergency rooms for treatment, but who don’t have serious problems, are admitted to hospitals within 24 hours. That of course begs the question of whether the hospitals are admitting such patients so they can charge enough – either to insurance companies or the government – to cover their costs.

All in all, it is obvious that with the aging population there is much activity on the health care front, especially as it concerns the elderly. Failure to pay attention to ongoing initiatives in health care legislation can mean drastic changes in health care options in the near future. Eternal vigilance anyone?


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