Mayo Clinic in Arizona to Stop Treating Some Medicare Patients By David Olmos Dec. 31 (Bloomberg) -- The Mayo Clinic, praised by President Barack Obama as a national model for efficient health care, will stop accepting Medicare patients as of tomorrow at one of its primary-care clinics in Arizona, saying the U.S. government pays too little. More than 3,000 patients eligible for Medicare, the governmentâs largest health-insurance program, will be forced to pay cash if they want to continue seeing their doctors at a Mayo family clinic in Glendale, northwest of Phoenix, said Michael Yardley, a Mayo spokesman. The decision, which Yardley called a two-year pilot project, wonât affect other Mayo facilities in Arizona, Florida and Minnesota. Obama in June cited the nonprofit Rochester, Minnesota-based Mayo Clinic and the Cleveland Clinic in Ohio for offering âthe highest quality care at costs well below the national norm.â Mayoâs move to drop Medicare patients may be copied by family doctors, some of whom have stopped accepting new patients from the program, said Lori Heim, president of the American Academy of Family Physicians, in a telephone interview yesterday. âMany physicians have said, âI simply cannot afford to keep taking care of Medicare patients,ââ said Heim, a family doctor who practices in Laurinburg, North Carolina. âIf you truly know your business costs and you are losing money, it doesnât make sense to do more of it.â Medicare Loss The Mayo organization had 3,700 staff physicians and scientists and treated 526,000 patients in 2008. It lost $840 million last year on Medicare, the governmentâs health program for the disabled and those 65 and older, Mayo spokeswoman Lynn Closway said. Mayoâs hospital and four clinics in Arizona, including the Glendale facility, lost $120 million on Medicare patients last year, Yardley said. The programâs payments cover about 50 percent of the cost of treating elderly primary-care patients at the Glendale clinic, he said. âWe firmly believe that Medicare needs to be reformed,â Yardley said in a Dec. 23 e-mail. âIt has been true for many years that Medicare payments no longer reflect the increasing cost of providing services for patients.â Mayo will assess the financial effect of the decision in Glendale to drop Medicare patients âto see if it could have implications beyond Arizona,â he said. Nationwide, doctors made about 20 percent less for treating Medicare patients than they did caring for privately insured patients in 2007, a payment gap that has remained stable during the last decade, according to a March report by the Medicare Payment Advisory Commission, a panel that advises Congress on Medicare issues. Congress last week postponed for two months a 21.5 percent cut in Medicare reimbursements for doctors. National Participation Medicare covered an estimated 45 million Americans at the end of 2008, according to the Centers for Medicare & Medicaid Services, the agency in charge of the programs. While 92 percent of U.S. family doctors participate in Medicare, only 73 percent of those are accepting new patients under the program, said Heim of the national physiciansâ group, citing surveys by the Leawood, Kansas-based organization. Greater access to primary care is a goal of the broad overhaul supported by Obama that would provide health insurance to about 31 million more Americans. More family doctors are needed to help reduce medical costs by encouraging prevention and early treatment, Obama said in a June 15 speech to the American Medical Association meeting in Chicago. Reid Cherlin, a White House spokesman for health care, declined comment on Mayoâs decision to drop Medicare primary care patients at its Glendale clinic. Medicare Costs Mayoâs Medicare losses in Arizona may be worse than typical for doctors across the U.S., Heim said. Physician costs vary depending on business expenses such as office rent and payroll. âIt is very common that we hear that Medicare is below costs or barely covering costs,â Heim said. Mayo will continue to accept Medicare as payment for laboratory services and specialist care such as cardiology and neurology, Yardley said. Robert Berenson, a fellow at the Urban Instituteâs Health Policy Center in Washington, D.C., said physiciansâ claims of inadequate reimbursement are overstated. Rather, the program faces a lack of medical providers because not enough new doctors are becoming family doctors, internists and pediatricians who oversee patientsâ primary care. âSome primary care doctors donât have to see Medicare patients because there is an unlimited demand for their services,â Berenson said. When patients with private insurance can be treated at 50 percent to 100 percent higher fees, âthen Medicare does indeed look like a poor payer,â he said. Annual Costs A Medicare patient who chooses to stay at Mayoâs Glendale clinic will pay about $1,500 a year for an annual physical and three other doctor visits, according to an October letter from the facility. Each patient also will be assessed a $250 annual administrative fee, according to the letter. Medicare patients at the Glendale clinic wonât be allowed to switch to a primary care doctor at another Mayo facility. A few hundred of the clinicâs Medicare patients have decided to pay cash to continue seeing their primary care doctors, Yardley said. Mayo is helping other patients find new physicians who will accept Medicare. âWeâve had many patients call us and express their unhappiness,â he said. âItâs not been a pleasant experience.â Mayoâs decision may herald similar moves by other Phoenix- area doctors who cite inadequate Medicare fees as a reason to curtail treatment of the elderly, said John Rivers, chief executive of the Phoenix-based Arizona Hospital and Healthcare Association. âWeâve got doctors who are saying we are not going to deal with Medicare patients in the hospitalâ because they consider the fees too low, Rivers said. âOr they are saying we are not going to take new ones in our practice.â