JENS MANUEL KROGSTAD, Courier Staff Writer

WATERLOO - Dr. Kent Miller's eyes crinkled into a smile when he described Ruth Ransom, a patient he saw last week, as "a real sweetheart" and "a wonderful lady."

As an internal medicine physician, more than 50 percent of his patients enroll in Medicare, the government health insurance program for seniors and the disabled.

"I personally enjoy taking care of senior citizens, so I won't stop doing that," Miller said.

Despite the joy he derives from caring for seniors, he said he cannot afford to seek out new Medicare patients.

Last week Congress narrowly avoided a 10.6 percent cut in Medicare payments for doctors. The legislation still faces a presidential veto.

Had the measure failed, Miller said, the fiscal realities of his practice may have forced him to start turning away seniors.

"I anticipate, if this goes through, limiting the number of new Medicare patients I see," he said early last week.

Last week's action by the Senate staved off the problem, but only for 18 months. For the last several years, the issue has cropped up about every 12 months because Congress can only agree to a short-term solution.

This year the sticking point revolved around where to find funds to avoid a physician pay decrease. Democrats decided to cut funding from the Medicare Advantage plan. In 2003, a Republican-led Congress created the plan, an alternative to Medicare administered by private insurance companies.

The only way to create a long-term fix, said Allen Hospital CEO Rick Seidler, is to change the formula that determines reimbursement to doctors. In an effort to rein in spending, he said, the formula caps the amount of money Medicare pays doctors when too many patients sign up. When it was created 10 years ago, he said, nobody addressed the predicted burgeoning of the nation's senior population.

"If the growth (of patients) is too fast, then there are cuts," Seidler said.

Warnings of limited physician access are not new. Reimbursement rates have been declining for years, but so far, access has not been significantly compromised.

But doctors said this year's cut would have created a breaking point, particularly in Iowa. A physician reimbursement cut is imposed uniformly across the country. But every state receives a different reimbursement rate, and in that category Iowa ranks 49th in the nation.

With one of the lowest rates in the country, some Iowa physicians already choose not to participate in Medicare or to limit their Medicare patients, said Karla Fultz McHenry, vice president of public policy and advocacy for the Iowa Medical Society.

"We have physicians doing both in the state of Iowa. I know that number is growing every day because physicians are very frustrated with the situation we have now in Iowa," she said.

Iowa's high percentage of senior citizens means any changes in Medicare deeply impacts the state's medical providers. Even harder hit are rural areas, where seniors make up a significant percentage of the population.

Low Medicare reimbursement to doctors has wide-ranging consequences across the country.

The years of decreased reimbursements has made it harder to attract doctors to primary care practice, whose doctors take on a disproportionate share of Medicare patients. In coming years, experts warn the country faces a shortage of those physicians as more doctors pursue more lucrative specialities like cardiology.

Payments for Tricare, the health insurance program for military personnel and their families, are directly tied to Medicare. And reimbursement rates from privwate insurers will eventually reflect Medicare's reimbursement rates.

Iowa has 468,637 Medicare patients and 41,891 Tricare patients.

"Commercial payers over the last several years have tended to key reimbursement rates off of Medicare," said Jeff Halverson, vice president of Covenant Clinic.

The result - an across-the-board pay cut for all the patients a doctors sees.

Miller, the internal medicine doctor, said he knows it can be tough to garner sympathy from the public when doctors complain of not making enough money. But he said the costs of operating a primary care practice have increased dramatically over the course of his career.

It has become so expensive that Miller, 56, ditched the plan he envisioned when he first started his career - practicing medicine into his later years by gradually reducing the number of patients he sees.

He can't afford to do that today, he said, so he plans to retire early.

Until then, Miller needs to decide how many seniors he can afford to care for - a decision he said he wishes he did not have to make.

"When people call and say, 'Are you accepting new patients,' we take their information but make no promises," he said.

Contact Jens Manuel Krogstad at (319) 291-1580 or jens.krogstad@wcfcourier.com.