Mayo Clinic drops Medicare- in 2010

Update: this happened 2 years ago. So, I wrote this thinking it was a new development, but it isn’t. Anyone know how this experiment has played out?


I’ve wondered for years if hospital organizations (and big organized clinics) had done the math on whether they could do without Medicare, and apparently Mayo has. More after the quote

President Obama last year praised the Mayo Clinic as a “classic example” of how a health-care provider can offer “better outcomes” at lower cost. Then what should Americans think about the famous Minnesota medical center’s decision to take fewer Medicare patients?

Specifically, Mayo said last week it will no longer accept Medicare patients at one of its primary care clinics in Arizona. Mayo said the decision is part of a two-year pilot program to determine if it should also drop Medicare patients at other facilities in Arizona, Florida and Minnesota, which serve more than 500,000 seniors.

Mayo says it lost $840 million last year treating Medicare patients, the result of the program’s low reimbursement rates. Its hospital and four clinics in Arizona—including the Glendale facility—lost $120 million. Providers like Mayo swallow some of these Medicare losses, while also shifting the cost by charging more to private patients and insurers.

via Medicare and the Mayo Clinic –

First thought: the docs at the Mayo Clinic must have gotten some amazing assurances from the clinic to drop Medicare for 2 years. (If a physician opts out of accepting medicare, and it’s an all or nothing proposition, and under current law they cannot get their medicare billing back for 2 years. No doubt this was done to keep docs from using their opt-out as political leverage, and then get it restored when payments went the way they wanted).

Second thought: Mayo just became a Concierge Clinic. Interesting.

Third: I’m very interested in knowing what administrative advantages would follow dropping Medicare. EMTALA would no longer apply, but this is a clinic, not a hospital/ED, so I’m not sure that would affect them much. (I may misunderstand the role and capabilities of this Arizona Mayo Clinic, so let me know if I’m wrong here).

There are always strings attached with taking Uncle’s money, and they don’t lessen over time, they compound. I think HIPAA is linked to Medicare, too, so that gigantic unfunded mandate could stop.



  1. Steve Lucas says:

    Various comments on different blogs show that a cash only practice can charge about half of the Medicare rates and still make more money, due to lower overhead.

    One retainer medicine model limits a practice to 600 patients, with same day service, and again, with lower overhead makes more money for the doctors while providing better service to the patient.

    The only question is how brave will doctors be in the future to drop Medicare in favor of other payment methods.

    One big cost eliminated off the top is a coder and associated software and updates. Software and updates that funnel money back to the AMA, and until recently, a secret group setting rates for all doctors.

    Steve Lucas

  2. I find it interesting that they only dropped primary care and not the specialties. Any primary care doc knows you will go broke immediately with Medicare reimbursement for E&M codes. Without procedures, scopes, scalpels and higher paying services we are toast. With the aging Americans entering Medicare years…people better save their money so they can supplement Medicare with Concierge/retainer for primary care services. This is what happens when a Nation has no real health policy for the population. (ACA is “insurance reform” not really “health-care reform”.)

  3. Mayo in Jacksonville runs a full show hospital complete with ED. I can’t speak to Scottsdale or Rochester.

    William sends.