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Last week the Senate failed to take action to avert a 21.5% reduction in Medicare fees to doctors scheduled to go into effect January 1, 2010.  Such a dramatic reduction in Medicare reimbursement will be devastating to the healthcare of older Americans.  Many physicians will stop seeing Medicare patients, in favor of younger patients whose insurance already pays much better than Medicare.   Older Americans’ access to healthcare will suffer.

Worse yet will be the impact on clinical geriatrics, which includes geriatric medicine and geriatric psychiatry.  Specialty geriatric practices depend almost entirely on reimbursement from Medicare.  These practices already are barely viable financially.  They cannot compensate by taking more young patients, so the impact on the geriatric sub-specialties will be catastrophic.  A staggering crisis already exists in the geriatric workforce (try finding a geriatrician or geriatric psychiatrist to appreciate how big a problem this is). The Institute of Medicine’s report of April 2008 Retooling for an Aging America: Building the Healthcare Workforce concludes that this predicament is an emergency for which immediate action is needed.  The IOM report concludes that inadequate reimbursement is the single greatest barrier to geriatric workforce development.  I can confirm that this so from my own experience.

Unfortunately, federal Medicare policy is not supporting the growth of clinical geriatrics.  To the contrary, the Medicare cuts scheduled for 2010 will devastate the field and set back the cause of geriatric healthcare by a decade or more.  The most vulnerable elder patients will suffer the most, and the cost of their care will increase as a result.

In addition to the looming 21.5% fee cut, the Centers for Medicare and Medicaid Services plans to cut specialists’ payments under Medicare in favor of a commensurate six to eight percent increase in payments to primary care physicians.  While this increase will apply to geriatricians, it will not apply to geriatric psychiatrists.  This further cut will be another nail in the coffin for geriatric psychiatry.  The federal government ought to use Medicare reimbursement in every way possible to support growth of geriatric psychiatry.  Instead, they seem to be doing everything possible to weaken the field when it is most needed. Federal healthcare policy is heavily invested in primary care.  But it fails to recognize the central role geriatric psychiatry plays in the primary care of elders with mental disorders.  The IOM report points out that primary care physicians are not prepared to meet the challenge of geriatric care.

Urgent legislative action is needed to prevent devastating damage from being done to geriatric psychiatry and to ensure that geriatric psychiatrists will be available to meet the needs of the rapidly growing ranks of the oldest Americans.  This action should include the following:

• Permanently eliminate the Sustainable Growth Rate Formula for annual Part B fee updates.  Another one-year temporary fix is not good enough.  Year-to-year unpredictability regarding annual Part B updates makes planning and recruitment all but impossible for geriatric practices.  Until fundamental reform of physician payment occurs, Medicare Part B fee updates should be tied to annual changes in the healthcare market basket, as recommended by the Medicare Payment Advisory Commission, the body that advises congress about Medicare policy.

• The CMS should be required to apply any reimbursement increase for primary care physicians to mental health specialists for services they provide to Medicare beneficiaries ages 65 and over.

• Congress should direct Medicare B and Medicare Advantage plans to pay a 10% added payment for all covered geriatric services provided by designated, sub-specialty geriatric practices that exclusively serve geriatric patients. This conforms to recommendations in the IOM Report for a supplemental payment for geriatric specialists.

• Funding for Medicare demonstration programs for community-based, geriatric-specific advanced medical homes.  These homes should be comprised of geriatricians and geriatric psychiatrists collocated within the home and working collaboratively to fulfill the potential of such programs.

• Require PACE programs that employ physicians to hire geriatric psychiatrists so that they comprise 25% of the physician staff.

• Fund Medicare demonstration projects for telephone consultation by geriatric psychiatrists to primary care physicians.

Ultimately more fundamental reform is needed.  The current fee-for-service reimbursement system is deeply flawed and fails to take advantage of geriatric mental health expertise.  Models such as medical homes, PACE programs, and collaborative care in primary care practices all offer potential.  To be viable, all will need to be supported by reformed reimbursement methodologies.   Regardless of how innovative geriatric healthcare reform is, it will all be for naught if there is not a workforce available with the requisite expertise to address the mental healthcare needs of older Americans.   As the IOM urges, urgent action is needed.