A lake area clinic could close its doors if a federal formula regulating payment to physicians for treatment of patients on Medicare is not addressed by Jan. 1.
Located in the Laurie Terrace Mall, Westlake Medical Center is a primary care clinic where an estimated 85-90 percent of patients are on the federal medical program for Americans ages 65 and up -- an unsurprising statistic in a city where the median age in the 2010 U.S. Census was 69.
Dr. Kenneth Derrington has been practicing medicine for more than 40 years with close to 17 years in Laurie as a primary care physician at Westlake Medical Center.
But without a bypass of the sustainable growth rate (SGR) formula, he and physicians across the country face a 26.5 percent cut in payments from its Medicare patients, according to the American Medical Association. And another 2 percent cut is possible on top of that if a budget deal is not reached by lawmakers in Washington, DC due to cuts that would be required by the 2011 Budget Control Act.
"This is a huge problem everywhere," Derrington says.
But the cuts would be especially devastating to small independent clinics like Westlake Medical Center.
The independent clinic is not attached to a hospital. There are two physicians and eight employees at the clinic. The income from fees must fund payroll, rent, utilities as well as medical and x-ray supplies.
Overall, Derrington says overhead is high, and on the scale of things, primary care doctors don't make nearly the income that specialists do. For the month of December in 2011, the physicians -- Derrington and Dr. Kathleen Robbins -- made no money after making payroll and bills, Derrington says.
"The cuts could be very bad for us," he says. "In a business like ours, when 90 percent of business is on Medicare, it's almost a 30 percent cut in income. The ability to keep the clinic open is severely threatened. Congress has to act."
The issue is not just financial solvency for Westlake Medical Center, however, but the access to healthcare it provides for Medicare patients in the area.
"Last year one-third of Medicare patients looking for a new primary care physician had trouble finding one, according to a MedPAC study," AMA President Jeremy A. Lazarus, M.D., said in a Dec. 19 press release. "Access to care for patients in Medicare will be drastically compromised if this cut takes effect."
This uncertainty in Medicare is not new, and the size of the potential cut now is related to the build up of bypassed cuts over the years.
Adopted in the late 1990s, the SGR formula has indicated a lowered reimbursement to physicians since 2002, but Congress has always implemented a short term fix to maintain the reimbursement rate, according to the AMA -- one of more than 100 state and specialty medical societies that are pushing Congress to repeal the SGR formula and transition to a new Medicare program that they say would be a long-term solution to end the payment instability, increasing quality and lowering costs.
Page 2 of 2 - With the stalemate and attention on the looming fiscal cliff, these medical groups are concerned that Congress will let the cuts take place this time.
“With no sign of action from Congress, physicians must prepare themselves and their patients for an impending Medicare crisis. With a full year to stop this drastic cut, it is absolutely inexcusable that Congress has failed to act, leaving Medicare patients and physicians to deal with the consequences," Lazarus said.
While Medicare payments to doctors has been flat over the last decade, the AMA estimates that the cost of caring for patients has increased by 20 percent.
"The ongoing stalemate in Washington makes the Medicare program unreliable, and this instability undermines efforts by physicians to implement new health care delivery models that can improve value for patients through better care coordination," Lazarus said. "Physicians want to work with Congress to move past this ongoing crisis to strengthen Medicare for current and future seniors. It is time to stop this broken cycle and move toward a Medicare program that ensures continued access and the best health outcomes for patients and a stable, rewarding practice environment for physicians.”
While lawmakers on Capitol Hill continue to battle over fiscal issues, back in Laurie, Dr. Derrington says Westlake Medical Center will continue to do the best job they can for patients and hope the money to stay open comes from somewhere.
"We live a lot on faith," he says.