For years, Mayo Clinic officials have complained that Medicare and Medicaid pay less than what it costs to treat patients.
Now they're doing something about it.
In the past week, the Rochester-based clinic said it will stop caring for 50 Medicaid patients in Montana and Nebraska starting Jan. 1, unless they have a rare disease that can't be treated elsewhere. Also on that date, a handful of Mayo's primary care doctors in Arizona will opt out of Medicare, forcing some 3,200 patients to pay out-of-pocket or find new providers.
None of the patients is from Minnesota -- save for some snowbirds who winter in Arizona.
Mayo will continue to see the vast majority of its Medicare and Medicaid patients, who make up 40 percent and 6 percent of patients, respectively.
Aware of the clinic's high profile in the national health care debate, clinic representatives downplayed the number of patients affected and said the moves had been in the works for some time.
But they also drew a direct link to the payment problem Mayo leaders have long highlighted -- most recently in Congress.
Mayo officials want a new payment formula that takes into account outcomes, rather than just number of procedures. This would reward high-performing medical centers such as Mayo and help ease the burden of taking on patients on public programs.
"Both of these moves are very difficult for us to make," said spokeswoman Shelly Plutowski. "Both point to the fact that we as a country need to change the way we pay for health care. Mayo Clinic and other providers lose money on every Medicare patient we see, and the same goes for Medicaid."
Last year, it cost Mayo $840 million more to treat Medicare patients than it received in payments, Plutowski said. The clinic also lost $100 million treating Medicaid patients, she said.
Mayo will continue to see Medicaid patients in Minnesota and the four states that border it -- Iowa, Wisconsin, North Dakota and South Dakota. It doesn't have Medicaid contracts with any other states except for transplant contracts in Arizona and Florida, where it has satellite clinics.
In Arizona, five primary care physicians at Mayo Clinic Family Medicine-Arrowhead, in the western Phoenix suburb of Glendale, will opt out of Medicare at the end of the year. Mayo has 40 primary care physicians out of a total of 375 doctors in Arizona.
While the Medicare issue is a long-running one, Mayo has also been hit by the recession, as have other medical and hospital groups.
Mayo barely broke even last year on revenue of $7.2 billion. While the number of patients was stable at 526,000, income from patient care fell by almost a third. Investment losses spiked and gifts were down sharply.
Chen May Yee 612-673-7434