Medicare Fix Started with Town Hall

April 9, 2014

By Reps. Sam Farr and Anna G. Eshoo

Years ago at local town hall meetings, we began hearing from seniors that they were unable to find a doctor willing to treat them, despite being covered by Medicare. Their friends had access to doctors, but none of those doctors were taking on new patients.

We decided to delve into the issue and found that not only was there a shortage of doctors practicing in our districts, but the few that were simply could not afford to take on new Medicare patients. Driving the problem was the reimbursement for Medicare doctors in our districts. It was at a lower rate than for doctors providing the same care in other parts of California. The underpayment was a result of an outdated classification system, the Geographic Pricing Cost Index (GPCI), which labeled California counties as either "rural" or "urban" and determined Medicare payment rates based on that classification. The assumption was that urban areas would have a higher cost of living, and therefore a higher cost of providing care than rural areas.

As seniors and doctors in our part of the state can attest, this is simply not the case, and we couldn't agree more.

The classification failed to take into account any economic growth those counties have experienced after 1966 when the classification was put into place. The result decades later were classifications that no longer represented the populations of those counties. To give you an idea how bad the problem became: San Diego County was still considered rural. In all, 14 California counties were classified as rural despite high costs of living, leading to Medicare underpaying doctors by up to 10 percent.

We tracked one payment code for a typical visit and found that a doctor in a mislabeled county could expect to receive $11.75 per visit less than a doctor in a neighboring county. That doesn't sound like much, but when multiplied by a typical 10-patient day, 5 days a week, and 52 weeks a year, that adds up to over $30,000 for just that one visit. Looking across the board at every visit adds up to $54 million in lost revenue for doctors practicing in these 14 counties. That is 54 million reasons why a doctor would rather practice in another region of our state.

So while our counties were losing doctors and could not attract new ones to replace them, other counties were coming out ahead. This gets to the heart of why this was so hard to solve. Any change that would be a 'win' for our congressional districts would have been a loss for other counties. So for almost 15 years we've worked non-stop in Congress to find a solution. We worked with our colleagues in California and elsewhere to find compromise. Four different times we were able to get a deal in place that allowed us to get a fix in the House of Representatives, only to watch it die in the Senate. Each time, we picked ourselves back up and started the process again. Often this meant educating a whole new set of members and their staff about the problem.

That all changed last week when Congress debated a larger bill that dealt with the payment of doctors by Medicare throughout the United States. The bill had to be passed by the end of March to prevent a massive cut in payment rates. Tucked inside that bill was a small provision we inserted that would update the GPCI classification system for California to one that better reflects the economic realities of all counties.

Thanks to this fix, tens of thousands of seniors will now be able to see a doctor. Doctors will now be properly paid for treating these patients no matter where they live. It will allow our congressional districts to attract more doctors and keep the ones we already have, improving access to quality health care for everyone.

It was a small piece of language in a bigger bill, but the effect will be huge for California. And it all started when a few seniors stood up to speak at a town hall meeting.

Sam Farr, D-Carmel, represents the 20th Congressional District; Anna Eshoo, D-Palo Alto, represents the 18th district. Published in the April 6, 2014 edition of the Santa Cruz Sentinel and the Monterey Herald.