The dramatic cuts in reimbursements to physicians who treat Medicare patients, by as much as 25 percent, would directly affect senior citizens and disabled individuals who are covered by Medicare insurance.

The deadline for the reduction in payouts to doctors was originally set for Dec. 1, 2010; however, the deadline has been delayed to Jan. 1, 2011. This one month extension does not resolve the problem by any means nor is this a simple matter.

Basically, under this particular insurance plan, payments to doctors for medical services rendered are based on a Medicare physician fee schedule (MPFS). The formula used to calculate the approved payments uses a “conversion factor.” The amount linked to the current conversion factor was in effect through Nov. 30, 2010. Starting Dec. 1, 2010, this factor and corresponding reimbursements were to be significantly decreased, in the amount of 24.9%. The MPFS mentioned above is linked to formula/ program called the Sustainable Growth Rate (SGR) which had been created by Congress about 10 years ago. Its overall purpose was to gradually reduce reimbursements issued by Medicare and serve as a way to control the growth of Medicare.

On multiple occasions, Congress has issued extensions, including the one made this week, when it passed a one-month extension. However, come Jan. 1, 2011, if no further efforts are made towards reform of the reimbursement formula and other related factors, then the doctors and patients will be back in the same predicament. Medicare patients, a large and very vulnerable group, will feel the brunt of this dilemma because a number of doctors have already reported that they will stop treating patients who are on Medicare.

Numerous medical and news websites are covering this development and looking ahead with much uncertainty, as follows:

The American Medical Association has been very outspoken about the need for the restructuring of Medicare reimbursement program for quite some time — here is an informative article, AMA meeting: Association spotlights need for Medicare payment reform.

Local media, Boston.com, has also published a news report, Congress puts off cuts to doctor Medicare payments.

A short review of this situation is an article released by Medscape Medical News called, “House Approves Senate's 1-Month Medicare Doc Fix”.  [Note: you must be registered with Medscape to view content.  Registration is free.]