Tuesday, January 5, 2010

Mayo Clinic Won't Take Medicare

Medicare, the government insurance company for everyone over age 65 (and for the disabled) pays fees to primary care physicians that guarantee bankruptcy. Additionally, 70% of hospitals in the United States lose money on Medicare patients. That's right...for every patient over age 65, it costs the hospital more to deliver care than the government reimburses. That is why Mayo Clinic has said it will not accept Medicare payments for primary care physician visits. Mayo gets it. Nationwide, physicians are paid 20% less from Medicare than from private payers. If you are not paid a sustainable amount, you can't make it up in volume. It just doesn't pencil out.

Mayo lost $840 million last year on Medicare. Since Mayo is considered a national model for efficient health care, if they are losing money it doesn't bode well for the rest of us who are much less efficient and who have fewer resources for integrated patient care. Instead of Medicare payments for clinic visits, Mayo will start charging patients a $2000 fee for patients to be seen at their Glendale, Arizona clinic. Much like a "retainer", this fee will cover an annual physical and three other doctor visits. Each patient will also be assessed a $250 annual administrative fee.

Primary Care physicians are on the front line of patient care and senior patients are the most time consuming. The average Medicare patient takes 11 different medications. Just refilling and coordinating the medication can take up an entire office visit, without addressing other health concerns. I grant all Medicare patients a 1/2 hour visit because I would be chronically behind if I didn't. After paying office overhead, I am broke with Medicare. I do not welcome the 65th birthday of my patients, but I continue to see them because I love my Senior patients. No kidding, I really love being their doctor. They are grateful and respectful and have interesting health conditions. I am able to see them because I make my income from my administrative position and I have private pay patients.

Sad but true. Unless we have true payment reform that values primary care and pays for coordination of care, I fear Medicare patients will not find enough willing physicians who accept Medicare in the future.


KM said...

Your Senior patients are extremely fortunate to have you still caring and continuing to be there doctor when on medicare. I have seen their difficulty and helped some patients when trying to find a new doctor due to their physician retiring or going to concierge that many doctors offices are not accepting new medicare patients outside of previously established ones.

One patient called me back so grateful that I had given her a referral to a doctor who would take her on medicare and said it had taken her two years to find a physician since her doctor went to conceriage.

I hope when I'm older and turn 65 I will be able to see a doctor who cares and can actually say loves their patients and finds their illness challanging like you.

Anonymous said...

I am a medicare patient with medi-gap insurance which covers any cost over what medicare pays. I thought that the majority of medicare patients had such coverage. I feel sorry for the over 65 who don't have such protection, and for the doctors and hospitals who treat them. What a sad situation.

Toni Brayer, MD said...

Anon: There is wide misconception of what "medigap" insurance covers. Medicare has a cap on what it pays. Medicap insurance only covers the portion that would be the patient's "copay"(usually 20%) not the full charges. It does not cover any cost over what Medicare pays. It only covers up to what Medicare says it will pay.

For example, if I charge $150 for a patient visit, Medicare may only pay $66. Medigap insurance will not pay anything over Medicare allowable, which is up to $66.00. The difference between $66 and $150 is paid by no-one and the doctor has received a fee that does not support the practice.

Additionally, there are things Medicare does not cover at all, like physical exams or removal of skin lesions that are not cancer. Medigap insurance will not cover those costs either and unless the physician tells the patient up front that the condition is not covered, she is not allowed to bill the patient. The payment is zero.

Medigap is great for patients because it pays your copay. Medigap does nothing to resolve the terrible reimbursement for primary care from Medicare.

ERP said...

Although I support the current health care bill, I am not supportive of medicare cuts that will likely come with it. I foresee more and more MD's and Hosptials dropping Medicare all together, forcing many into the ER when they get sick enough to need an operation or what not.

Michael Kirsch, M.D. said...

Remind me, isn't this the same Mayo Clinic that the president holds up as a model for the country? Will the president recommend that we follow Mayo's example?

Praveen said...

I've heard this complaint many times, and to be honest, I find it somewhat difficult to believe. Let's do some math.


The link shows some real Medicare reimbursement numbers for pediatrics in 2007 (in Colorado). Pediatrics is primary care, and office visit reimbursements aren't very different. For an existing patient, the Medicare rate for an office visit given in the link above is around $85 on average, versus $106 for commercial insurance.

If a doctor sees 16 patients a day, that's 8 hours of patient time at 30 minutes per patient. Throw in 2 hours of overhead and that's a solid 10 hour day, but 50 hours a week is a pretty typical workweek for many professional occupations in the US.

16 patients * 5 days a week * 48 weeks a year (leaving 4 weeks for vacation/holidays) = 3840 patient visits per year.

3840 * 85 = $326,400 in gross revenue for our hypothetical doctor seeing only Medicare patients.

Doctors offices have significant overhead; I know a number of doctors, and think that $100,000-$200,000 is not out of order for total overhead for a PCP, though this varies greatly by state. Let's take the midpoint, $150,000 per year in overhead. In one practice that I'm familiar with, two doctors share overhead of around $300,000 total, splitting a staff of eight, plus the cost of offices, malpractice insurance, etc.

After subtracting out overhead, our doctor's net income is $176,400 per year. No, this is not the high flying income of a specialist, but it is not poverty wages either. And this is without a single commercially insured patient!

Now in practice a doctor may not fill 100% of their schedule. Let's assume 10% vacancy - that would reduce the doctor's net to around $144,000 per year.

Let me know if you see a grave error in my numbers - but what I see is that the common saying that Medicare isn't enough isn't true. It may be true that Medicare doesn't pay enough for many doctors to earn what they think they're worth, but that is a different story.

P.S. Referencing the link above again, I see that Colorado Medicaid pays significantly less, about $50 per patient. At this rate, a doctor would net only $23,000 per year using all of the same assumptions as above - now that's ridiculous, and it explains why Medicaid patients struggle to find docs.

John Calvin Hall said...

I am sorry, but I have ABSOLUTELY NO SYMPATHY for hospitals who charge $150.00 for aspirin.
Why should it cost the patient $150-200,000 for a trip to the hospital? Why is it that a patient who cannot afford $100+ per month for medical insurance be forced into a lifetime of poverty when they need medical care?
I'm no bleeding heart liberal, but there is a problem here. Wake UP!

scooter said...

Misunderstanding of medicare. Medicare is an assignment program. Regardless if a physician or hospital accepts the program for reassignment, the patient can still bill for the services. They need fill out a CMS-1500 form and submit with their receipts, and medicare will reimburse you.

People need to realize that medicare is a discount program. Physicians that accept reassignment of benefits (meaning medicare pays the doctor directly), also accept a lesser rate.

Patient on medicare do have the ultimate choice of who they go to. But if they goto a physician that does not accept reassignment, then they need pay cash for the services rendered (as was done prior to 1984 with all insurance companies). Honestly, physicians and hospitals would lose a lot less if people paid up front. Mind you, the physician makes less than 10% of that what a hospital makes on a patient. Further, dont let hospitals fool you. They are not losing as much money as you think. Mayo does, because they provide the most comprehensive physical on the earth. Further, they provide more miracles in a year than the Children's Miracle Network.

I accept medicare, and am now regretting it. They owe our practice over 300 thousand dollars for services rendered to thousands of people. They havent sent us payment on them in some time.

It is getting absurd dealing with them, and all of you should let your legislators know. If you want national healthcare, look at medicare seriously, and then decide. More and more physicians are not going to accept these federal programs until they are paid on time, every time.

scooter said...

a side note responding to praveen:

You are right, doctors dont have a bad life. But think of all the birthdays, holidays, vacations, reunions, etc they miss every year. My father is a physician, and I hardly saw him as a child. Now I see him because I work with him.

Further, how many people honestly would wake up at 2am for their job. Physicians are required to. I am not asking for sympathy toward doctors, but look to cast the blame of cost where it counts. The average thoracic surgeon pays 87K in malpractice insurance (they do heart and lung surgery), the average neurosurgeon 100K (brain and spine), the average OB 135K.

In our office alone, we have 7 staff (excluding providers), in one of the poorest counties in america (we have over 35% of people on medicaid or uninsured). Of these 7, only 1 has a degree. They are all paid well over 30K per year a piece.

We take care of our staff. We also take care of our physicians. People have a right to be healthy. What they need to realize, I also have a right to have food, but I have to pay for it. I cannot be denied access, but I have to pay for it.

Why is it, I ask all of you, that the average 12 year old knows the exact information of the cell phone plan they have (text message allotment, time factors, cost, etc), but adults are too lazy to learn about their insurance coverage?

The formula you are using is an average. Did you know, when you have surgery, that often times a physician cannot charge for further services rendered during what is called a global period? Further, do you know how many folders, papers, photocopiers, etc are needed just to accept the first patient. You are looking at revenue and forgetting cost.

Many physicians are being forced out of business and taking jobs with hospitals. If you think this is a good thing, think again. When a physician takes a job, s/he is guaranteed their salary; regardless if they see 5 or 500 patients. Many of them chose to see a lot less.

The average internist works over 60 hours per week, without overtime pay. Many of them take Emergency room call without pay. In one city they pay 350 for 24 hours. Mind you, during this time, the physician must be no more than 30 minutes away from the hospital, cannot go out for a drink, and cannot goto a movie because they will probably be interrupted.

Everyone's time is precious. You may not notice it overtly, but physicians are not going to keep tolerating underpayments. Dont forget about the cost to bill for services either. Average cost is 17% of the annual gross collections.

When you want a full detailed analysis of a physician practice, then look to the MGMA. You will find data that will blow your mind.

Anonymous said...

Uhm, I am a Medicare receipient, have a Medicare supplement AND AM a Mayo Clinic patient.

I have been getting quality care there for years! Yes, you get what you pay for!

Mayo does take Medicare, but not Medicare assignment. They DO take the lab assignments though.

For me it works about like this (rounded)

I see my Mayo doc = $100.00
Medicare pays an amount (their usual amount)
My supplement pays the normal 20% amount
I pay the balance - roughly $2.95 - three bucks!

Medicare and the supplement pay me directly, as only labs are paaid directly to Mayo. I deposit the money and then send the same amount to the Mayo. About aa month later I pay the $2.95 balance.

Three bucks to keep seeing my doctor? Yep! A steal. Sure, some tests, and specialty docs cost more, and a few times I pay up to about $100 out of pocket, but those are rare (MRI, etc..)

Also, my doc there of years DOES work with me, as he knows I am on Medicare. So, he writes a script (MRI) and I have it done IN a Medicare provider facility and they send him the results.

Bottom line: Mayo does take Medicare, just not Medicare assignment. And for the record, when I see bills for Mayo services they are typically CHEAPER than those from facilities who do take assignment!

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Anonymous said...

Why is it that healthcare costs in the US have skyrocketed since 1970?

We now have the highest health care costs in the world, and some of the most dismal quality metrics.

Hint: it's the providers, docs , doctor owned facilities etc. By the way, the trend in the US, in terms of healthcare cost is "bending" the wrong way.

The original post re. MAYO not accepting Medicare is just part of the provider's well funded Koolaide
Just stop lapping it up and get informed.

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Anonymous said...

I worked, paid taxes and now Mayo Clinic can tell me that I have no insurance. However, I have Medicare and BC/BS, but that's not good enough for Mayo Clinic Arizona location.

Seniors we really need to come together regarding those doctor's and Mayo Clinic decidsion not to except Medicare insurance. This is just the beginning with more hospitals and care givers to come.

My question is how can they receive federal funding, grants and not except Medicare? I was told they have their quota of Medicare participating members. When did we seniors become a quota? How and when did we loose our rights to go to one of the best medical facilities in the country; that receive federal funding which comes from taxpayers?

Everyone is concern about universal medicine,or Obama care. I think we need to become concern about discrimination and the refusal of medical services against the elderly here in the great State of Arizona.

Anonymous said...

Guess who paid for your doctor to become a doctor? Medicaid and Medicare. On average it costs 100,000 a year to train a US doctor during their residency and internships (it is split between the doc salary and the hospital that trains them). Over 100,000 doctors a year all getting their training paid for by US taxpayers via Medicaid/Medicare.

That works out to be between 500,000 and 1.1 million for some surgical specalities. When they graduate they are expected to treat medicare and medicaid patients for less in order to pay back the cost of their training.

If this was a loan they would pay back double or about 1 million to 2 million or over a 30 year career but lest just assume it is 500k at 4% that would be about $2500 in services a month. At a discount of $25 a visit that would be 100 medicare visits a month

ANY doctor who refuses to treat medicare or medicaid should be required to pay back the cost plus interest of their taxpayer funded education. It wasn't a gift it was an ethical contract to care for those that paid for you to become a wealthy doctor.

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