Ezriel Kornel, MD, a spine surgeon with Brain & Spine Surgeons of New York in White Plains, N.Y., explains how and why he opted out of Medicare five years ago.
Q: What does it mean to opt out of Medicare?
Ezriel Kornel: It means neither I nor my patient can bill Medicare for my services. All of the money I get comes from the patient's own funds. However, Medicare still pays the hospital or other facility where the operation is done. And there is another twist: If I am on call at the hospital and see a Medicare patient, not only am I allowed to bill Medicare, I am required to do so.
Q: Why did you opt out of Medicare?
EK: Medicare pays well under my costs. For example, Medicare pays $500 for a lumbar discectomy. My break-even cost, including malpractice coverage and overhead, is at least $2,000, and that is only because I am doing a high volume of these cases.
Q: Did you consider not participating in Medicare rather than opting out?
EK: Yes, I considered that and rejected it. The non-participating physician bills the patient directly. The patient turns around and sends the bill to Medicare and then pays the physician. The physician can charge 115 percent of the Medicare rate, but that amount is still profoundly insufficient.
Q: When you opted out, were you concerned you would lose patients?
EK: Medicare patients make up 20 percent of my patient base and there was some concern that referrals from some physicians might end — that they would stop sending me any more patients or at least not send me any more Medicare patients. Neither of those things turned out not to be the case. Referring physicians keep sending me every kind of patient. I think it's worked because those patients have not gone back to their primary care physician and said they were dissatisfied with me.
Q: What do you tell your Medicare patients when they first come in?
EK: I charge a low fee for the initial visit. At the least, I want to be able to get back what it costs me. I have a contract with the patient that states I cannot submit bills to Medicare and, if they ask, I will give them the name of a surgeon who does participate in Medicare.
Then we decide if they want to go ahead with the surgery this way or go to somebody else. If they can't pay the full fee, I am willing to charge less. For example, my fee for a cervical fusion is $5,000, but if they can't manage it, I let them pay $3,000 or $4,000. If that is a problem, they can pay over time. I just don't want to lose money on the patient, which is what happens with Medicare. I find most patients work out some kind of fee schedule, based on what they are able to handle.
Q: Have your partners opted out of Medicare?
EK: There are six surgeons in my practice. Four of us have opted out and two are still in Medicare. I've been urging all my colleagues to opt out. I tell them they need to look at their own accounts and see how much they lose on Medicare.
Q: Do you think more physicians will opt out of Medicare?
EK: If the 21.3 percent Medicare fee cut goes into effect in December, when the current temporary fee fix runs out, I predict a mass exodus form Medicare. But even Congress votes in a new fee fix, Medicare reimbursements for all physicians are just going to get worse. It will reach a point when it just becomes ridiculous.
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