The Proposed Medicare Cuts, and Its Imminent Repercussions

The Congress’ balancing act aimed at increasing nation’s debt, and decreasing federal spending has quite expectedly singled out Medicare – which is one of the priority spending sectors in the Federal Budget – as the nucleus of its growing deficit budget, and the one that requires immediate controlling measures either in terms of careful structural reform to the Medical Sustainable Growth Rate (SGR), or blunt across-the-board 2% cut to Medicare and other domestic programs. What is alarming is that the accumulated SGR is pegged at a negative 21.3% for 2011, though deferred till the end of the year, would have meant a drastic 21.3% cut to physicians bills for Medicare beneficiaries.

Having already come in for widespread criticism from all the stakeholders, the implementation will have serious repercussions across the spectrum of nation’s primary healthcare sector: Medicare Physicians, Beneficiaries, Medicare Insurance Carriers, and Medicare Billing Companies.

  • Medicare Physicians, who are already finding it impossible to serve Medicare beneficiaries for fees well below the market-driven rates, would find it even more tougher to balance their operating costs and revenues, and consequently be driven to reconsider their services for Medicare beneficiaries in the aftermath of such recommendation on Medicare.
  • Medicare Beneficiaries, who are already at loss finding suitable Medicare physicians, will find it even harder if the Medicare physicians consider migrating to private practice altogether, forcing Medicare beneficiaries spend at market-driven health cost. Further compounding the issue is the fact that the imminent percentage of seniors waiting to swell the-already-brimming dam of Medicare beneficiaries.
  • Medicare Insurance, which accounts for a majority of medical insurance reimbursement, would adversely be hit in as far is its percentage of medical insurance share is concerned should there be an exodus of Medicare beneficiaries to private insurance carriers.
  • Medical Billing Companies that until now considered Medicare processing as one of their priority businesses will be compelled to relegate Medicare down their portfolios of insurance carriers.

Having carried forward the perennially cumulative negative Sustainable Growth Rate (SGR) for more than a decade in the lager interest of Medicare beneficiaries (comprising senior citizens), the Federal Government has realized the proportion of negative impact of Sustainable Growth Rate on its fiscal composition and effectiveness of Medicare. Accordingly, it is contemplating either to repeal the Sustainable Growth Rate (SGR) formula for Medicare (meaning further Federal deficit to already trouble-stricken economy) or phased writing-off of the cumulative Sustainable Growth Rate projected to yield $575 billion in savings in the first 10 years (meaning a drastic reduction in payments to physicians attending Medicare beneficiaries, which could affect the physicians’ motivation level for serving Medicare patients). (, which is the largest consortium of medical billers with a deep concern for the medical billing market in the U.S., hopes that the Federal Government – having to tread on a thin line – will eventually come up with a solution that, apart from ensuring a balanced health budget, fosters Medicare as the health scheme promoting multiple stakeholders’ interests: Medicare Physicians, Medicare Beneficiaries, Medicare Insurance Carriers, and Medical Billing Companies catering to Medicare beneficiaries.