A mini-doc fix patch for 2015

Right now Congress is debating primarily on how to pay doctors more to treat Medicare patients than allowed under the Sustainable Growth Rate (SGR) formula in what is known as the doc patch.  This is a recurring “fix” as the SGR would cut provider pay for Medicare patients by 20% to 25% immediately.  Doctors are among the most trusted professions out there, so when they scream as a collective body, the American public will listen.  And when the comparison is against Congress, the American public will believe the doctors without analyzing the argument too hard. 

Congress has passed a doc fix every time that doctors could have potentially faced pay cuts.  Currently there is talk about passing a permanent doc fix.  The question is finding the pay-for.  I would be more than willing to take a public option or the Veterans Administration offering their formulary for Medicare Part D in exchange for giving doctors more money.  Republicans don’t want those policy trades that would be net deficit reducing.

There is a strong potential for a second doc fix style situation to come up this November and December.  PPACA for 2013 and 2014 changed the rate that Medicaid pays primary care providers (PCP) for primary care services.  Instead of getting the baseline Medicaid rate, providers that are either board certified PCPs or perform mostly PCP billing codes, these providers would get the Medicare rate.  

The change to a Medicare baseline is important.  Right now for physical health fee for service, Medicaid tends to pay significantly less than Medicare which pays a bit less than narrow network Exchange which tends to pay significantly less than broad network Exchange/Group Commercial which tends to pay less than non-par out of network.  Bumping Medicaid pay to Medicare rates reduces the incentive for doctors to treat current patients who are on Medicaid but to not take any new Medicaid patients while holding those slots open for commercial or Medicare insured individuals. 

The goal of the program was to act as a two year bridge to expand the PCP universe who would accept new Medicaid expansion patients.  From my point of view, it has been successful in opening up panels.  The problem is that it was a temporary two year path.  Current law assumes on January 1, 2015, Medicaid PCP service fees will be reduced by 25% to 50%.

I don’t think that will happen quietly.  Doctors are an amazingly well organized lobby with high degree of political trust.  The Democrats want primary care providers happy to take Medicaid patients and Republicans count on doctors as a major donor class, so I think something will be done if it can be done in such a way that Republicans can facially claim that they are not funding Obamacare. 


39 replies
  1. 1
    dmsilev says:

    TPM this morning:

    GOP’s New Kamikaze Plan: Punish Doctors If Obamacare Isn’t Chopped

    House Republicans have a bold new strategy to attack Obamacare, which involves huge pay cuts for physicians unless Democrats agree to delay the law’s individual mandate to buy insurance.

    GOP leaders intend to vote on legislation this week, aides say, to delay the individual mandate in order to fund a “doc fix” that avoids a 24 percent pay cut to physicians under Medicare — which will automatically take effect on April 1 unless Congress acts. Inaction would disrupt the health care system, in part by causing many doctors to stop accepting Medicare patients.

    The strategy is unlikely to succeed and could backfire on Republicans. Delaying the individual mandate is a nonstarter for the Democratic-led Senate and White House. By demanding a largely partisan unraveling of Obamacare in exchange for must-pass bipartisan legislation, they risk being blamed by seniors and the health care industry if the doctor pay cuts go into effect. When Republicans insisted on such an approach for federal funding last fall, the government shut down and they took most of the blame.

  2. 2
    Mudge says:

    And as noted many places, US physicians are paid much more than physicians in other countries. Let’s just continue that as middle class wages drop.

  3. 3
    Wag says:

    And there’s this little bit of cheer from the GOP.

  4. 4
  5. 5
    Wag says:

    Beaten to the punch.

  6. 6
    RobertDSC-Power Mac G5 Dual says:

    Why don’t they just pass legislation repealing the SGR requirement instead of trying to meet the requirement?

  7. 7
    Baud says:

    Doc fixes will lead to a socialist dictatorship. /Reagan

  8. 8
    Baud says:



  9. 9
    aimai says:

    @Baud: But the SGR is, itself, “socialism” in that it regulates a free market in anything goes prices. I think its ridiculous that Mediaid and Medicare ever paid different rates–if the service si the same why would the cost be different? Why would you make treating low income people with serious medical conditions less attractive than treating elderly people? Its nuts.

  10. 10
    Baud says:


    Why is it socialism? Seems more like government procurement.

  11. 11
    maximiliano furtive, formerly known as dr. bloor says:

    @Mudge: That depends entirely on what kind of doctor you’re talking about. In any case, that’s a weird way to go about the goal you have in mind, as these cuts are going hit the poor and elderly while leaving the middle class untouched.

  12. 12
    Redshift says:


    Why would you make treating low income people with serious medical conditions less attractive than treating elderly people? Its nuts.

    Unless you’re a Republican. Then one group is obviously “deserving” and the other is “undeserving.” (Though in fact, the answer probably had more to do with which is a reliable voting bloc and has political influence.)

  13. 13
    Redshift says:

    Hey, I’m not seeing any complaints about FYWP — does socialism no longer trigger the spam filter? Testing…

  14. 14
    A non mouse says:

    Docs a well organized lobby? In what world? The AMA has only about a third of all docs(I am not a member).
    Reading doc message boards, the only thing agreed upon is that we are the face of this cluster-fuck. Solutions to such are wildly varied. Me, I’m hoping for single payor.

  15. 15
    Commenting at Balloon Juice since 1937 says:

    How does delaying the individual mandate save money? Not having to pay subsidies? So the Repugs are proposing to use the new revenue sources of the ACA to shower doctors with more cash?

  16. 16
    mcmullje says:

    I have a current Medicaid problem. My 94 year old mother is on Medicaid. She has some potential skin cancer (basal cell) but we cannot find a dermatologist that takes Medicaid. Really worries me specifically about her, but in general for everyone else getting on Medicaid..

  17. 17
    Mnemosyne says:


    And as noted many places, US physicians are paid much more than physicians in other countries.

    US physicians also graduate with far more debit than physicians in other countries, who have often been provided with a free education. In the US, medical students have a median debt of $119,000 after graduating if they went to a public university, and $150,000 if they went to a private university.

    That’s the problem at the bottom of the changes we’re trying to make — you can’t ask someone with a $119K debt to take a job that starts at $30K a year. It’s obscene. We really have to come up with some kind of debt relief for medical students if we want to have fewer of them concentrate on the specialities that will gain them the highest income (and thus allow them to pay their debt down more quickly).

  18. 18
    Mnemosyne says:


    Is she on Medicaid, Medicare, or both?

  19. 19
    Shakezula says:

    You’re confusing doctors with medical societies such as the AMA and part of what the AMA does is make a lot of noise so it can get people to purchase a membership. (See for example the ICD-10 delay.)

    But this time the AMA doesn’t want another patch, they want a permanent fix which would mean Bye-Bye SGR.

    However, there’s also a fear the alternative will be a quality based payment model, which a lot of people don’t like, for reasons that are sometimes not good.

  20. 20
    Shakezula says:

    @Mnemosyne: There are some debt relief programs for providers who work in underserved areas or for IHS (sorry, I am foggy on the details).

  21. 21
    Stella B. says:

    @mcmullje: My mom had a problem with derm too, although she had Medicare. She had to go to the nearest big city (Albuquerque) to find a dermatologist who accepted Medicare. Unfortunately, the dermatologists can make a lot more money doing “aesthetic” dermatology for cash. There can be problems accessing doctors who accept Medicare in certain wealthy, isolated areas (Santa Barbara, Santa Fe, Aspen, etc.) which attract the well off, retirement crowd. If your mom only has Medicaid, it may be tough to find derm in other, smaller cities. Try contacting the Medicaid office.

  22. 22
    Stella B. says:

    @Mudge: You are right, docs in the US make ten times what docs in India make (of course the US average household income is 100 times the Indian average). Docs in Canada, however, are paid the same as US docs. I can provide references for all of those claims.

  23. 23
    divF says:

    Instead of getting the baseline Medicaid rate, providers that are either board certified PCPs or perform mostly PCP billing codes, these providers would get the Medicare rate.

    Richard –

    Using board certification as a measure of fitness is a hot-button item among doctors in the primary care specialties, ever since the American Board of Internal Medicine and the other specialty boards introduced recertification exams every 10 years in the 1990’s (anyone who was already board-certified was grandfathered in, in the sense that they did not have to take the recert exams to retain board certification). Board certification is in no way a good metric as to whether you are a good PCP. A practicing geriatrician, for example, does not deal with obscure issues in gynecology, yet those are exactly the sorts of things you have to be adept at to pass the recert exams. The specialty boards have been engaged in a campaign to become de-facto licensing agencies, and doctors, particularly in the primary care specialties, are fighting back. So are the state agencies who license doctors, who believe that they are in a better position to decide who is maintaining their qualifications based on criteria such as continuing medical education.

    Full disclosure: Madame divF has been a primary-care geriatrician for the last 20+ years, but just missed being grandfathered in when she was board-certified in Internal Medicine. At this point in her career and life, she is not going to waste a year studying academic medical arcana irrelevant to the practice of geriatrics to get recertified.

  24. 24
    Richard Mayhew says:

    @mcmullje: Is she dual eligible (Medicare due to age, Medicaid due to poverty/long term nursing home care) — see if you can get on a SNP which tends to pay Medicare rates more often.

  25. 25
    Richard Mayhew says:

    @divF: Completely agree, I am just repeating what the regulations are for eligibility to get paid Medicare rates for common PCP services to Medicaid patients.

  26. 26
    Mnemosyne says:

    @Stella B.:

    I think sometimes people look at the incomes of the very highest-paying specialties (like plastic surgery) in the US and assume that it must be the average pay for all doctors, which is not at all the case.

    I’m guessing that the very highest-paying specialties in the US don’t get paid as much in Canada, but that the average doc in a primary care office or a common specialty (like dermatology) makes the same in both places.

  27. 27
    Richard Mayhew says:

    @Commenting at Balloon Juice since 1937: Fewer people would buy an Exchange policy with attendant subsidies without the mandate, so the total on saved subsidies minus the foregone mandate penalty revenue would be a savings of $9 billion in a year.

  28. 28
    Richard Mayhew says:

    @Mnemosyne: Dermatology is one of the highest paying specialties out there — and there are nowhere near enough of them. In my region of several million people, there are a few dozen dermatologists total (thousands of family medicine/internal medicine, a thousand cardiologist, several hundred orthopedic surgeons etc)

  29. 29
    Mnemosyne says:

    @Richard Mayhew:

    But is it the highest-paying because of the current shortage, or has it always been the highest-paying?

    I would have thought that plastic surgery or ENT (otolaryngology) or even oncology would be higher-paying than dermatology.

  30. 30
    divF says:

    @Richard Mayhew:
    I expected you would agree, just trying to get the word out to others that might not know about the issue.

  31. 31
    Richard Mayhew says:

    @Mnemosyne: Derm has been fairly high paying since the early 90s. There is the goldern “ROAD” consisting of Radiology, Opthomology, Anesthesiology and Dermatology where the pay is excellent but the stress is fairly low. The pay is high because there has been a series of technological changes that have massively increased provider productivity without any real downward pressure on pricing. For instance, a mole removal procedure thirty years ago may have been assumed to reasonably complex and time consuming. With lasers etc, it is an easy job that takes 10 minutes. However, it still gets billed out as if it is a complex task that took an hour.

  32. 32
    Shakezula says:

    @Richard Mayhew: But the AMA/CMS have become more agile at spotting these discrepancies and changing RVUs accordingly.

    Also, Anesthesia is kind of a weird case, isn’t it? Technology can make their jobs easier, and when a surgical procedure becomes easier, they see a drop in the time spent per procedure. So they could get twice the boost. However, they’re also at the mercy of hospitals and surgical groups.

  33. 33
    Mnemosyne says:

    @Richard Mayhew:

    There is the goldern “ROAD” consisting of Radiology, Opthomology, Anesthesiology and Dermatology where the pay is excellent but the stress is fairly low.

    Right, but that’s slightly different than it being the highest-paying specialty, isn’t it? Maybe I’m not sufficiently up on these things, but I find it hard to believe that the average dermatologist is being paid as much as the average plastic surgeon.

  34. 34
    Violet says:

    @Mnemosyne: Dermatologists get to do “procedures”, which, as Richard pointed out, pay very well. They are mostly in-office, which keeps their costs down. They don’t have to work in a hospital setting, put people under anesthesia, etc.–all of which raise malpractice insurance costs, and include other expenses. It’s all of the money, less of the expense. That is not to say that Plastic Surgeons don’t get paid well–they do. But their expenses can be much higher.

    Plus, these days there are all the cosmetic dermatology procedures–botox, laser treatments, etc. Dermatologists who go into those kinds of practices rake in the money.

    There’s also the issue of being on call. Dermatologists almost never have to go in on a call. Maybe once in awhile, but their weekends are their own. Can’t say the same for Plastic Surgeons.

  35. 35
    Violet says:


    But is it the highest-paying because of the current shortage, or has it always been the highest-paying?

    To answer this specific question, Derm is now one of the highest paid specialties. According to this presentation, in 2012 it was just slightly below Plastic Surgery. It has not always been so highly paid. As Richard pointed out, changes in how Dermatology procedures are done and the slowness of payment practices to catch up have contributed to how highly they’re paid. Cosmetic procedures are the rest of it.

    Like I said above, it’s highly desirable and is one of the hardest residencies to get because of the lifestyle it affords. Only medical students who graduate at the very top of their classes with all sorts of honors make it into a Dermatology residency. It’s highly, highly competitive.

  36. 36
    Mnemosyne says:


    Plus, these days there are all the cosmetic dermatology procedures–botox, laser treatments, etc. Dermatologists who go into those kinds of practices rake in the money.

    Yes, but those things aren’t generally covered by insurance, are they? I guess that’s what I’m trying to suss out here — which doctors have a high income because they get a large reimbursement from insurance payments, and which doctors have a high income because they have lucrative side businesses they can get into?

    ETA: Also, it looks like dermatology is only the 8th-highest compensated specialty, with orthopedics being in the front.

  37. 37
    Violet says:

    @Mnemosyne: I’m not an expert on that. I do know that the orthopedic surgeons are the cowboys of the surgery world and get paid a lot for what they do. I’m guessing most of that is insurance money, as I don’t think most people would choose cosmetic orthopedic surgery.

    Perhaps Richard can comment further on which specialty makes money from insurance and which ones make money from other stuff.

    BTW, Plastic Surgeons make a lot of money not from insurance because a lot of their procedures aren’t covered on insurance, or only a portion of them are. You want a tummy tuck or a boob lift? You get to pay a lot of that yourself unless it’s medically dictated. Even gastric bypass and other types of weight loss surgeries aren’t fully covered.

  38. 38
    Mnemosyne says:


    I think it’s an important thing to figure out in the healthcare debate, though — how many doctors have high incomes because of the direct compensation they get for their medical services, and how many of them get that high income with their side businesses? It’s a heck of a lot harder to regulate the payments a doctor gets for formulating their own skincare line than it is to regulate their medical procedure payments, but we seem to talk about “doctor income” as though it’s all coming from medical procedures when it is for some specialties but not for others.

  39. 39
    mclaren says:


    And as noted many places, US physicians are paid much more than physicians in other countries. Let’s just continue that as middle class wages drop.

    Thank you for pointing out one of Richard Mayhew’s little lies of omission. Oh…wait — did I say “little”?

    No, it’s one of Richard Mayhew’s whopping huge lies of omission. Mayhew, the superwealthy one percenter health insurance CEO, conveniently forgets to inform us that American doctors makes on average $240,000 (that’s general practitioners — specialists get much, much more). Meanwhile, the average doctor in France makes $80,000 U.S. per year — that’s one third of what the U.S. physician makes. The average doctor in Germany makes $100,000 per year — that’s less than half what an American doctor makes.

    So once again Richard Mayhew presents as an urgent “problem” that America needs to “solve,” the insanely rapacious greed-crazed overpayment of U.S. doctors.

    Really, Richard?

    How about starting a series of posts about the critical “problem” of maintaining that steady stream of ten-million-dollar-per-year bonuses for the greedy corrupt Wall Street smash-and-grabbers who wrecked the world economy and then got rich off their economic vandalism?

    And as for Mayhew’s assertion that U.S. physicians are rated “among the most trusted groups” by the American public — well, guess what, folks?

    Yes, American doctors are grossly incompetent and shockingly uninformed at the most basic rudiments of their profession.

    In the early throes of a heart attack, caused by an abruptly clotted artery, the stunned heart often beats quickly and forcefully. For decades doctors have administered “beta-blockers” as a remedy, to reduce consumption of limited oxygen supplies by calming and slowing the straining heart. Giving these drugs in the early stages of a heart attack represents elegant medical ideology.

    But it doesn’t work.

    Studies show that the early administration of beta-blockers to heart attack victims does not save lives, and occasionally causes dangerous heart failure. While two studies support the use of beta-blockers after heart attack, there are 26 studies that found no survival benefit to administering beta-blockers early on. Moreover, in 2005, the largest, best study of the drugs showed that beta-blockers in the vulnerable, early hours of heart attacks did not save lives, but did cause a definite increase in heart failure.

    Remarkably, the medical community has continued to strongly recommend immediate beta-blocker treatment. Why? Because according to the theory of the straining heart, the treatment makes sense. It should work, even though it doesn’t. Ideology trumps evidence.

    The practice of medicine contains countless examples of elegant medical theories that belie the best available evidence.

    Recent press reports detailing the dangers of cough syrup for children have noted that cough syrup doesn’t work. True: No cough remedies have ever been proven better than a placebo, either for adults or children. Yet their use is common.

    Patients with ear infections are more likely to be harmed by antibiotics than helped. While the pills may cause a small decrease in symptoms (for which ear drops work better), the infections typically recede within days regardless of treatment. The same is true for bronchitis, sinusitis, and sore throats. Unnecessary antibiotics are still given to more than one in seven Americans each year for these conditions alone, at a cost of more than $2 billion and tens of thousands of serious adverse medication effects requiring treatment.

    Back surgeries to relieve pain are, in the majority of cases, no better than nonsurgical treatment. Yet doctors perform 600,000 of these surgeries each year, at a cost of over $20 billion.

    More than a half million Americans per year undergo arthroscopic surgery to correct osteoarthritis of the knee, at a cost of $3 billion. Despite this, studies show the surgery to be no better than sham knee surgery, in which surgeons “pretend” to do surgery while the patient is under light anesthesia. It is also no better than much cheaper, and much less invasive, physical therapy.

    Treatment based on ideology is alluring. Surgeries to repair the knee should work. A syrup to reduce cough should help. Calming the straining heart should save lives. But the uncomfortable truth is that many expensive, invasive interventions are of little or no benefit and cause potentially uncomfortable, costly, and dangerous side effects and complications.

    The critical question that looms for health care reform is whether patients, doctors and experts are prepared to set aside ideology in the face of data. Can we abide by the evidence when it tells us that antibiotics don’t clear ear infections or help strep throats? Can we stop asking for, and writing, these prescriptions? Can we stop performing, and asking for, knee and back surgeries? Can we handle what the evidence reveals?

    Source: “Believing in Treatments that Don’t Work,” The New York Times, 2 April 2009.

    The obvious answer is “no!” American physicians are too ignorant and too incompetent and too utterly unaware of the basic elements of the scientific method to handle what the evidence reveals about illness and its proper treatment.

    Anywhere in the world, this would be shocking — but for the highest-paid physicians on earth, this is just plain disgusting.

    So at this point we need to ask: why is every one of Richard Mayhew’s posts filled with lies and distortions and misinformation?

    Richard Mayhew lies by implication (“physicians are one of the most trusted groups by the American public” — when in reality American doctors persist in prescribing treatments that scientific studies have shown don’t work) and Richard Mayhew lies by omission (“we need a permanent doc fix” — when in fact American doctors are the most grossly overpaid physicians among all first-world countries, and not just by a few percent, but by 300% to 240% overpaid, paid three times what other physicians France or the Netherlands or Spain get paid).

    Richard Mayhew lies and lies and lies and lies in his articles on healthcare, creating a vast miasma of false impressions and total distortions.

    And once again, everyone reading Mayhew’s articles should ask themselves — Why doesn’t Richard Mayhew tell us how much money he makes per year?

    Mayhew keeps telling us how America’s overpaid incompetent doctors who can’t manage to prescribe the right treatments for illnesses (treatments the scientific studies have shown actually work), but, boy, those greedy incompetent American doctors need lots more money. Lots and lots and lots more money.

    This from the superwealthy one percenter health insurance CEO who admantly refuses to tell us how much money per year he makes. How much is that, Richard? $400,000 per year? $900,000 per year? Two million dollars per year?

    Email John Cole. Tell him to press the eject button on this Richard Mayhew guy. The only thing Mayhew has to “inform us” on about American health care is how much more money these greedy incompetent superwealthy one percenters supposedly need to get paid.

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