There is no way Dr. Joseph Shanahan could bring himself to stop seeing Medicare patients. "My mother would kill me," he said.
But the Raleigh rheumatologist, who is also board certified in internal medicine, takes a huge financial hit by participating in the federal insurance program for older people. The program's fees to doctors are already low, and a looming 21 percent cut would make a difficult situation worse.
"By cutting reimbursements so low, what kind of quality of care are we expecting?" Shanahan said.
Although Congress acted last week to once again delay the fee cut, the political wrangling over its enactment and the threat that it will eventually take effect have prompted many doctors to drop their participation in Medicare or quit taking new patients who rely on the government program.
A recent survey by the American Medical Association found that 17 percent of doctors nationwide now limit the number of Medicare patients they take, and they cite the uncertainty about the future payment cuts as the reason.
"People are scared," said Dr. Conrad L. Flick, past president of the N.C. Academy of Family Physicians and a current board member of the national professional group.
They're also fed up.
"For the first time, a lot of doctors have thrown up their hands and said, 'Don't fix it. Let the cuts go into place and see what happens,'" Flick said. "If so many doctors end up dropping Medicare patients, then they will have to fix it."
The prospect of playing doctor roulette with the nearly 40 million Americans who depend on Medicare is an unsavory approach, Flick added. Doctors are in the business to tend the sick, he said, not to haggle for fees.
"My No. 1 job is to care for my patients," Flick said. "My No. 2 job is to be in business, and I can't do job No. 1 if I can't make job No. 2 work."
Rising doctor bills
The threatened 21 percent Medicare fee cut stems from a 1997 law Congress passed in an attempt to stabilize Medicare expenditures. That law pegged the cost of Medicare doctor services to growth in the broader economy, as measured by the gross domestic product.
For the past 13 years, updates in Medicare doctor fees have been calculated on that targeted growth rate. But doctor bills have outpaced economic growth.
In some instances, technological advances moved services once done at hospitals or specialty centers into doctors' offices. In other cases, Medicare added treatments or screenings. Such efforts shifted the oversight - and overhead - to doctors.
As a result, actual spending on doctor fees soon exceeded the targets set by the formula, triggering the need for a correction. In 2002, Medicare required a 5 percent fee cut. Doctors howled. Congress allowed the cut to stand, but the next year it intervened with a temporary delay on a second scheduled cut. Similar delays have been approved every year since.
Instead of fixing the formula, however, legislators have simply kicked the problem into the future, with each year's cut stacked onto the last. As a result, annual cuts of up to 5 percent have grown to the current 21 percent whack. It will likely be even bigger six months from now, when the most recent fix expires.
After years of postponing the problem, some members of Congress are now raising concerns about constantly delaying the fee cuts. The issue has grown more political, while efforts to craft a permanent solution have stalled under fears of ever-escalating Medicare costs and worries about the federal budget deficit.
Each temporary patch brings added uncertainty.
Shanahan, who moved to Raleigh from Wilmington at the first of the year to set up a private practice, said the wrangling this time resulted in a three-week freeze on Medicare reimbursements.
"Every time this comes up, it's a financial tsunami," Shanahan said, noting he has been paid only $647 this month from Medicare - a trickle compared to his usual billings.
Because most of his patients are on Medicare - rheumatologists treat people who have arthritis, gout and other chronic ailments associated with age - a disruption in government payments creates a bind.
"The bank, my employees, the water company, the electric company - they can't wait for me to pay them," he said. "Who else runs a business this way?"
Doctors pack it in
Many doctors have just given up, leaving Medicare patients in the lurch as they scramble to find a new medical home or specialists willing to see them.
For weeks, Moses Jones, 82, suffered pain in his neck, shoulder, hip and knees. His daughter had to drive him from his home in Willard to an appointment with Shanahan in Raleigh because he couldn't find a rheumatologist nearby who accepts new Medicare patients.
Jones said the visit cost his daughter a day at work and set him back for gas and other expenses. The trip was worth it, however, as Shanahan diagnosed an inflammatory illness and prescribed steroids.
"I was feeling better before I even got home," Jones said.
The doctor hunt can be especially tricky for people relocating to North Carolina, which is increasingly a destination for retirees. Clinton Willis, a retired brigadier general and president of the N.C. Senior Citizens Association, said difficulties finding a doctor who accepts new Medicare patients can hinder the chances some people have of moving into retirement communities.
Many of the communities require new residents to have a local doctor lined up for their care. Recently, Willis said, newcomers have been unable to find a doctor willing to add Medicare patients.
"We're very concerned about it," said Willis, who lives in a retirement community in the Scotland County town of Laurinburg. "We keep working with our physicians to take folks when they come in, and sometimes it can be right testy. They're filled to capacity in small communities like this, and they can't take anybody else."
Guided by his own sense of mission, Shanahan said he cannot simply walk away from Medicare. But by sticking with it, he said, he may be pushed out of business.
"I can only see so many patients in a day," he said, noting that patients want more time with their doctors, not less.
But even adding more patients at Medicare rates is not enough to keep doctors afloat. Instead, many diversify into pricey services that Medicare pays well for - screening and diagnostic tools such as MRIs, infusion clinics to administer expensive intravenous drugs, and laboratory analyses. All drive up the cost of care, Shanahan said, because the system rewards doctors for channeling patients into such services.
"A physician looking at the patient is where medicine occurs, not putting in an IV and administering a drug," Shanahan said. "It takes an interaction with the patient, thoughtful discussion. We're incentivizing doing things - giving a drug. There is no incentive for thoughtful discussion."
