Doctors, hospitals fear getting stiffed by U.S.

NEW YORK (CNNMoney) -- Doctors, hospitals, nursing homes and pharmacies might not get paid for products and services if the federal government defaults on its debt next week.

Some physician groups, anticipating this scenario, have started to warn their members that a possible default means their Medicare paychecks may not get mailed.
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The American Academy of Family Physicians, which has more than 100,000 members, alerted them this week that a default means the government will only have enough money to pay about half of its bills, resulting in a likely delay in Medicare payments to physicians.

In that scenario, the government would likely halt Medicare reimbursements to doctors until the debt ceiling issue is resolved, the group said.

"We felt it was important to tell our members for be ready for this," said Dr. Roland Goertz, president of the American Academy of Family Physicians. "It is highly likely that there will be some impact upon Medicare payments."

The American College of Surgeons sent out a similar alert via e-mail to its members this week, warning them that "if Congress and the president do not raise the debt ceiling by Aug. 2, there is a chance that Medicare claims will not be paid."

In 2010, the federal government paid out $515.8 billion in total Medicare benefits to health care providers, including doctors, hospitals, nursing facilities, home health care centers and pharmacies.

Here's a breakdown of Medicare payments to those providers last year:

-- $168 billion to hospitals

-- $64.5 billion to doctors

-- $26.9 billion to nursing facilities

-- $19.1 billion to home health centers

-- $61.7 billion to pharmacies as part of Medicare's prescription drug programs.


Goertz said a halt in payments is a serious issue to physicians, especially since about a quarter of all patients seen by his group's members are Medicare beneficiaries.

"Unfortunately that percentage has been dropping anyway because of Medicare reimbursement problems to doctors," Goertz said.

He fears that a longer-term ripple effect of a default could worsen that trend.

A stoppage in payments because of default could threaten to turn more physicians away from Medicare patients, he said, adding that doctors who aren't getting paid may look to replace Medicare patients with those who do ensure that physicians will be paid.
Debt ceiling deadlock: Who will get paid?

The American Medical Association, whose more than 250,000 members include doctors, medical students and faculty members, said it has contacted the administration and "expressed the importance of continuing to process Medicare claims to ensure physicians are paid in a timely manner and protect seniors' access to health care."

The American Hospital Association said in a statement to CNNMoney that it was unclear what impact a default would have on hospitals.

"When there was the possibility of a government shutdown, [the government] did not issue specific guidance about payments to hospitals until the very last minute. We expect that would be the same case here as well," said Matt Fenwick, spokesman for the hospital group.

The Centers for Medicare & Medicaid Services declined to say whether Medicare payments to health care providers would be affected if a default occurs.

In a statement to CNNMoney, the agency said: "As the president has said repeatedly over the past 6 months, there is no alternative to raising the debt limit. The only way to prevent a default crisis and protect America's creditworthiness is to enact a timely debt limit increase, which we remain confident Congress will do."