Why doctors can turn away Medicare patients, even if they pay cash

Last week, KUOW listener Carole Glickfeld reached out to us with a story.

She had come down with walking pneumonia. “I was very weak, feverish, I felt like it was the end of the world,” Glickfeld said.

She couldn't get an appointment with her regular doctor, so she went to an urgent care clinic on Capitol Hill. Glickfeld, who’s covered by Medicare, asked to pay cash.

The clinic said they weren’t allowed to treat her, even if she was paying cash. Glickfeld was eventually treated at a community clinic.

Glickfeld asked KUOW to investigate this question: “Why are certain urgent care clinics unwilling to treat me if I'm a Medicare patient, but I'm willing to pay cash?”

To find the answer, KUOW's Kim Malcolm talked with Aaron Katz. He's a lecturer in health services at the University of Washington.

He told us there is a law preventing some providers from treating Medicare patients who are seeking urgent care, even if they want to pay cash. They’re called "opt-out providers" and they don't take Medicare at all.

Interview Highlights

On why this policy exists in some places

In order to serve a Medicare patient, even if they want to pay out of pocket, [the clinics] have to have some sort of agreement with the patient. This law basically protects people who are sick right now and need care. She wanted to get seen right now and this protects them from agreeing to something that maybe they wouldn't otherwise agree to if they weren't sick.

Are doctors required to accept patients with Medicare or Medicaid?

No. Physicians are not required to serve Medicare or Medicaid patients. These are individual business decisions of physicians and clinics.

What about public hospitals like the University of Washington Medical Center?

My understanding is that not-for-profit and tax-exempt hospitals are required to serve Medicare patients. But if you look across the country, many hospitals are not tax exempt, and they're not required to take Medicare or Medicaid.

Most hospitals would have a very hard time surviving financially if they didn't serve Medicare patients because that's the bulk of who goes into hospitals.

Why would private practices refuse these patients?

The argument that you would hear from physicians or practices or clinics is that Medicare pays at rates that are below the costs of actually providing the care, and so they would lose money on those patients.

Now from my point of view it's a little bit difficult to assess that independently, but that's the argument they make.

What are your thoughts on the system as it stands now?

I think it's a product of a very fragmented healthcare system in which we categorize people by their income or their age or who provides insurance and it puts us all into separate buckets. And the effect of that is to keep us apart in terms of our economic and political interests.

How healthy would you say Medicare is for the people who are counting on it for the future?

The decisions that have been made by the Republican Congress and the Trump Administration have at least threatened to erode the financial wellbeing of Medicare.

I wouldn't say Medicare is going to go away in five years. Right now, I think Medicare is a viable program for the foreseeable future, but that could change tomorrow.