Squeezing physician reimbursements: A vicious cycle

Medicaid patients have a tough time finding a physician, due to ridiculously low reimbursements:

For example, Medicaid pays AppaRao Mukkamala, president of the Michigan State Medical Society and a radiologist in Flint, Mich., $20 for a chest X-ray while his costs are $29. “At this point, I have to pay money out of my own pocket to take care of that [Medicaid] patient, and it’s only going to get worse,” he says.

Patients without access delay care, go to the emergency room, and further drive up health care costs. The government then responds by reducing physician payments further.

Appropriate physician reimbursements would break this cycle.

Comments

Anonymous
When we found that we were losing money on Medicaid patients, we essentially stopped accepting new Medicaid patients. New Jersey has one of the lowest Medicaid reimbursement rates in the country. Additionally, our Legislature deemed that Medicaid no longer has to pay the 20% balance for Medicare patients. So – these Medicare patients are also losing access to care, though my practice hasn’t stopped seeing these patients – yet.
Happyman
this problem is compounded by the fact that, on average, these patients are sicker (?due to less access?) and need tests/specialist visits. This means plugging them into the local hospital clinic systems, since most private specialists will not take medicaid. This means excessive waits & bureaucracy, further increasing the likelihood of an ER visit.
Also, medicaid in their infinite wisdom in NY, pays me $7.50 to see a sick patient in a nursing home, or their home. On the other hand, they pay hundreds to the ambulette service to cart the patient to my office.
Anonymous
So who do you think funds Medicaid?
Oh yeah, that’s right, we the taxpayers.
So essentially you’re saying we all should be taxed more so doctors can make more money. In other words – take it out of my pocket and put it into yours.
Not that I’m not sympathetic to the need to keep physicians financially afloat… but this is essentially what you’re advocating.
Anonymous
No. He’s saying we should stop throwing good taxpayer money after bad taxpayer money, to reduce taxpayer expenses.
Because the doctors are underpaid, there is less access. People get sicker, and get mandated care from an ER where a) it is more costly anyway, and b) the patient is now sicker.
Pay the doctors better, improve access to care up front, and reduce costs.
Anonymous
“So essentially you’re saying we all should be taxed more so doctors can make more money. In other words – take it out of my pocket and put it into yours.”
So what are you advocating? That I lose money every time I see a Medicaid patient? Would you accept that in your own business? No one can stay in business very long if they lost money.
“Pay the doctors better, improve access to care up front, and reduce costs.”
Amen!!
John
Anon 9:34, it’s a complex situation where the Medicare/Medicaid patients lack access to primary care because their insurance doesn’t pay enough for familydocs to make economic sense to have them as patients. So the old/poor folks go to the ER to handle basic problems, which is really expensive: which forces you to pay more for your health insurance to offset the low pay of Medicare/Medicaid. So as the Medicare/Medicaid trend of decreasing payouts continues, you end up paying more and more money in health premiums to allow it(that’s not good, right?).
Medicare/Medicaid is in place to provide health care to old/poor people. It does not exist to pay doctors directly, this is just necessary because people only do work for compensation. And docs aren’t saying, “PAY US MORE BECAUSE WE WANT TO BE RICH.” They’re saying that if reimbursements don’t increase, no family docs are going to see Medicare/Medicaid patients, who are all going to the ER, which drives up health care costs for everyone (except the old/poor on medicare/medicaid)
So, while I appreciate your sympathy to “keep physicians financially afloat”, what you’re really arguing against is the state run Medicare/Medicaid, not what physicians are getting paid, which isn’t much.
Kevin
Anon 9:34, 9:57,
It’s clear that you don’t like the idea of reimbursing physicians appropriately. That’s fine, and reflects common public sentiment.
However, I have outlined the realities of the system. You will pay one way or the other. Just because you don’t like economic realities facing medicine today doesn’t make them less real.
I invite you to come up with another idea if you don’t support increasing physician reimbursement.
“Putting all physicians on a salary in a single-payer system” would be a response – but please, do you think that is likely to be implemented anytime soon in the US?
Thanks,
Kevin
Anonymous
I get it, I get it.
I just like to throw in comments from time to time to spark some discussion and be the devil’s advocate.
It’s been way too quiet here lately. Summer doldrums, anyone?
Anonymous
Well, the real issue is.. hey, if the public doesn’t want to reimburse for Medicaid that’s fine with me. Provided the public doesn’t get uppity when nobody accepts Medicaid and it is functionally worthless.
If we start having the government pay for car repair but they’ll only pay 5 dollars for brake replacement, don’t act like it’s the mechanics fault for taking people who will actually pay the going rate.
Stephen Segall
Is there any reason to think that reimbursements won’t continue falling for as long as there are enough doctors willing to work for that little? They will force you to draw a line in the sand at some level. Why not now? We have refused Medicaid for years, and will close our doors to Medicare with the next cutback.
I’m tired of physicians absorbing (paying) America’s indigents’ bills. Let all of America pony up and pay for the service it wants us to provide all comers by raising taxes for us, or it find some PA’s or NP’s to do it on the cheap.
Make no mistake: nobody in this process is thinking, “But what’s fair to these doctors?” They’ll give you a nickel a patient if you’ll take it, and then cut that to four cents to see if you’ll take less. Stand up for yourself and everybody else. Refuse.
You know, the old deal where we were treated and paid like royalty in exchange for an attitude of noblesse oblige from us has been violated. For what they want to give me today, you get a lot less.
Anonymous
That is the perversity of the Medicaid scam. Sell you on the compassionate care for the indigent but pocket the tax money by the Medicaid administrators and insurance subcontractors and stiff the doctor.
Does it occur to anyone that participation makes you part of the problem?
Anonymous
Frequently you find that large entities, hospitals, etc., can handle the Medicaid just fine.
What you find out, though, is they manage to extract higher payment from Medicaid and Medicare.
Critical-access status. Cost-plus reimbursement. A few years ago, there was a WSJ article about some sort of scandal at NYC’s Floating Hospital system (not to be confused with Tufts/Boston Floating Hospital). The scandal did not interest me as much as a casual mention of how much more NY Medicaid paid for a nurse-practitioner to see a patient, compared to the much smaller amount that would be paid to a private physician performing the same service.
Catron
Frequently you find that large entities, hospitals, etc., can handle the Medicaid just fine.
Sorry, that’s BS. With a (very) few exceptions, hospitals get hammered by Medicare and Medicaid.
Medicaid, for example, routinely pays ER visits at the triage rate ($44 in my state).
Anonymous
Sorry, that’s NOT BS.
I’m not saying all hospitals get it. Maybe I should say “sometimes”. Nor is it necessarily Medicaid payments, but other payments they are able to extract that are not available to private physicians.
Mine does. They have Critical-Access status, and yes they do get enhanced payments, the administrators themselves say so.
My State Medical Association, there was an educational meeting as part of the political meeting a couple years ago. One speaker described the outreach clinic he worked at, as Medical Director. A nice description of the primary care services provided, very nice.
But he casually mentioned the total budget, and later had mentioned the number of patient visits. It worked out to over $150 a visit. I pointed out that if Medicaid paid me that much per patient visit, I’d drop Blue Shield in favor of Medicaid.
The Floating Hospital story was in the WSJ a few years ago. The dollar figure was their quote, similar to what I’d described above. About $150 per patient visit from NY State, versus about a quarter of that for a private doc.
Maybe the Wall Street Journal got the numbers wrong?
I like guidestar.org Check out the site. Registration is free. You can see the finances behind charitable organizations. Harvard University, the American Red Cross, your county kennel club (if it’s a nonprofit).
There’s a free clinic in my town. Opened to great fanfare about ten years ago. Providing care to the poor.
Fine. Except when you look at their finances, the clinic, with one nurse-practitioner, has a total budget 50% higher than my medical practice, seeing far fewer patients. When you add in administrative fees the NP gets (line items in the budget, public record), the nurse makes about what I made.
No, it’s not just Medicaid payments directly, so maybe that’s where we have mutual misunderstanding. It’s (sometimes) enhanced payments, it’s government programs I can’t access, it’s government grants, it’s private grants. Not to mention tax-exempt of course.
At the end of that, free medical services written off was about five thousand dollars. Again a line item, public record.
Hey, more power to them. But if you paid me that much, I’d see the poor as well. Of course, I wouldn’t run as heavy with staff. These clinics also run as jobs programs in rural America.
Anonymous
Not only is Medicaid reimbursement bad, but, as of 10/1, we’ll have to use “tamper proof” script pads (whatever those are!)to write for controlled substances for Medicaid patients. Guess we’ll have to pay for another government mandate. If that’s the case, then it’s bye-bye to the few Medicaid patients I have left in my pulmonary practice.
Anonymous
Medicare and Medicaid does not pay equal to all payees. This is a FACT! There are special statuses that you can achieve to get paid whatever you need to run the clinic whether it be urban or rural just as long as it is “underserved.”
Anonymous
Oh, I’m not saying Medicaid payment stinks, just that some entities find ways around it, and it’s ways not available to private physicians.
Same as a certain medical school in the Northwest managed to exempt itself from the malpractice rules everyone else had to live under (total limits a couple hundred thousand….total damages….for the medical school, unlimited exposure for private physicians).
AND the medical school and another large hospital even managed to exempt itself from malpractice reporting requirements to the State Board.
So when a certain surgeon skipped the country to Australia and got in trouble there (this is in the public record), the question naturally follows “why didn’t the Board do something with all the complaints in the USA?” It turned out the hospital found a way to exempt itself from reporting rules.
A private doctor settles a malpractice accusation, it’s reported to the Board. Professor, or large HMO-hospital doc, didn’t have to report. The Board had no clue, as was subsequently revealed in the newspapers.
Anonymous
>>Medicare and Medicaid does not pay equal to all payees. This is a FACT!
Thank you.
Medicare also varies geographically. I found that myself, the hard way.
For a mid-level office visit, established patient, regular Medicare. The payment difference between my rural area, and metro area a couple hours drive away, there’s a fifteen-dollar difference, per visit.
Over a year, that’s a big payment difference. And the cost of living difference does not justify the payment difference. My stethoscope costs what it costs, I don’t get a rural discount. And some big-ticket items are actually more expensive because of shipping. Yeah, some things are cheaper, but not enough to justify the pay differential. Soon this rural area is going to have one less doctor.
Catron
Mine does. They have Critical-Access status, and yes they do get enhanced payments, the administrators themselves say so.
Critical Access hospitals constitute only about a quarter of all hospitals, and most of them are rural institutions.
While CAHs do receive slightly better reimbursement, the difference isn’t enough to offset the losses incurred pursuant to the demographic make up of their communities.
Most CAHs are, in fact, losing money. So, your original assertion simply doesn’t conform with the facts.
Anonymous
Wow, I didn’t know CAH’s were a quarter of all hospitals.
Whether they do well or not is another matter. My point was the hospitals extract payment that is different from what I would get for the same service.
My hospital is critical access. They employ doctors. I’m private. The employed doctor gets more than I would get for providing the same service to a Medicaid recipient.
A nearby hospital has a funny situation. The big hospital is urban. Go about ten miles on an excellent highway, and there’s a tiny hospital they took over. There is not strong reason to run such a tiny hospital ten miles from big-city hospital. But……a county line makes them, on paper, defined as rural. The place is kept open because of CAH status. Why not? If those patients went ten miles, the urban hospital would provide the same service for less pay.
Not that I blame them. Nor am I saying they necessarily do well, even with the better payment.
But they DO get better payment.
Catron
Here’s how most hospital finance types would describe the difference between what a normal acute care institution gets and what a CAH gets:
The former rate stinks to high heaven, while the latter merely stinks.
Anonymous
“It’s clear that you don’t like the idea of reimbursing physicians appropriately. That’s fine, and reflects common public sentiment.”
Kevin, what’s an appropriate reimbursement?
Physicians come to the public saying this expense is too high, that payment is too low, give us this, give us that, and at the end of the day, it’s all about money. And that’s not bad, because money in large part makes the world go ’round.
But how much exactly are you looking for? What is the sum at which physician complaints are muted?
Anonymous
The number you are asking for can only be determined in a free market, which we do not have. I will stop complaining about increasing costs when I can, like other businesses, pass them on to my customers. If doing so reduces my volume, then I have to make that choice, but it least I am making it. Similarly, let me charge what I want to charge. Those that can afford it will see me, those that can;t, wont. But in the end, I’ll at least have the ability/option to negotiate my fee with my customers invidually, which I do not have now.
Anonymous
Further, what’s an appropriate reimbursment for any good or service? Well, it’s what the market will bear. If physicians are dissatisfied enough, they will leave practice, and supply will diminish. If reimbursement is too high, they will lose customers.
The same applies to lawyers, accountants, plumbers, mechanics, and all sorts of businesspeople who own their own businesses. Why are doctors singled out for “special treatment” and price controls? Why must the government, or any body, (or me, right now, in response to yo0ur question) determine what my reimbursement will be ad infinitum? Can a plumber not raise or lower his rates at will, several times a year? Does a governmental body set the rates once yearly? No – he or she can changes them daily if they like to meet the needs of their business. And they don’t have to agree to not provide servcice to 98% of the population for the next two years before setting their own rates either (as physicians do).
Anonymous
Doctors aren’t “singled out”. Doctors enter into contracts which set their rates. No one makes them.
Nothing made you two previous posters enter into the contracts you’re now in, and nothing makes you renew them.
Anonymous
The lack of customers outside of these contracts makes them renew them.
Of course, they could just do something else with their lives, but that’s the point, isnt it? increasing access, not decreasing physicians.
And if I don’t contract with Medcicare, I can charge whatever I want? No. If I do, it is called fraud. I must agree (and contract with patients) NOT to see 99% of medicare patients for 2 years, then I can charge what I want to whoever is left. And if there is no one left, I am stuck with it for 2 years, no way out.
Name another business where BY LAW, you must choose a business model which limits your customers in order to set your own rates, and stick to that model for 2 years, success or failure? Can you name any other? Can you name any other industry in which reimbursement to individuals for services provided by those individuals are set by Congress? (I am not referring to government employees or employees of any kind. I am referring to self employed professionals.) If not, doctors ARE “singled out.”
Anonymous
For those that do not understand how medicare participation works, here is a link:
http://www.ama-assn.org/ama1/pub/upload/mm/-1/medicareoptions.pdf
Anonymous
>>Kevin, what’s an appropriate reimbursement?
I’m not Kevin, but what the heck.
It would be nice to see a reimbursement that would allow me to at least meet payroll and expenses.
Medicaid does not do that. If my private practice had a substantial Medicaid load, I would go bankrupt.
In fact, I prefer the uninsured. I can lower my charges for payment at the time of service, and do better than I would with Medicaid. In fact, I have noticed the occasional Medicaid recipient pay cash despite being on Medicaid. The person realizes I would not see them otherwise. Unfortunately, if I find out they are on Medicaid (despite their statement that they are NOT on Medicaid) I have to drop them. If they had told me they had Medicaid, I would not have taken them in the first place.
That’s why I don’t accept Medicaid. Of course, some would like to point out how stupid doctors are for signing the contracts. Of course, that does not account for the patients forced on us by hospital follow-up rules. They hit the ER and we are forced to see them in follow-up as a condition of staff privileges.
Well, I suppose we could set up our own hospitals and surgicenters. Oops, Federal rules for specialty hospitals and state CON laws make that difficult, if not impossible. Massachusetts has specific rules about Blue Shield participation and following Medicare limiting charge rules, as a condition of licensure.
But in my state at least, I can simple decline to accept new Medicaid patients. Of course, that gets docs like me lambasted in the press.
Anonymous
“The lack of customers outside of these contracts makes them renew them.”
Do you think that’s going to change if you continue to sign them? Do like every person in every other profession, which you claim to want to be like in terms of payment, and figure out a way to differentiate yourself and make people be willing to pay for your skills.
You guys keep doing the same thing over and over, and expecting the result to change. Hospitals forcing patients on you that can’t pay? Don’t work for the hospital.
Yeah, medicare participation sucks – so don’t participate. If you keep participating, how do you think that improves your bargaining position.
You guys keep claiming you want more money, more freedom to set your rates, etc. Yet time and again you do the exact same thing you’re doing now. Have you been stuck in this cycle so long that you’ve forgotten how this free market you claim to want works? Are you sure you even want it, or is it just an idle bitch?
You can’t even set a number you want for reimbursement, much less refuse the bad deals you’re in now. Why do you think you can survive in the free market?
Anonymous
I want $425/hr, including clerical work I do on patients’ behalf when they are not in the room. What my Lawyer gets. When my nurse, or med assistant does the work, I want $125/hr, what my lawyer gets for his para-legal.
There, I set a number.
Anonymous
Now you must find a way to get paid that much. That’s how the free market you profess to want works. You’re lawyer gets paid that because you believe that’s what he’s worth.
Anonymous
Right. I decide that is how much he is worth, not some meddling third party.
Take third parties out of the middle of the physician-patient relationship. You decide if my bill is worth it, and you deal with your insurer, to get reimbursed at whatever rate you have negotiated with them. That way, I can negotiate my rates with you, and not be restricted by phony price controls and unfunded congressional mandates.
You keep reiterating that I choose to participate in the existng system, as if there is any real alternative other than not practicing medicine. But for most of us, in most geographic locations, there is no alternative that has any practical reality (e.g. No patients would participate in it.)
So we agree that my patients are the ones who should decide how much I am worth. Should they have to forego their insurance coverage in order to make that determination? (See Medicare rules for opting out) Or should they be allowed to pay the difference between what their insurance covers and what I charge? Why o the patients not have that choice? And I’ll tell you, they do not.
Anonymous
# posted by Anonymous : 8:36 AM
You forgot the 36-hours in a day the lawyers use for billing.
Anonymous
“So we agree that my patients are the ones who should decide how much I am worth. Should they have to forego their insurance coverage in order to make that determination? (See Medicare rules for opting out) Or should they be allowed to pay the difference between what their insurance covers and what I charge? Why o the patients not have that choice? And I’ll tell you, they do not.’
They don’t because no one is requiring them to. If the providers ever stopped agreeing to take their insurance, then they would find a different way of paying for their healthcare.
How do you know patients wouldn’t participate in an alternative scheme? If you offered them something distinct, which is what the free market requires, they may very well flock to you. After all, for decades doctors didn’t have the third party payers, and patients paid in other ways.
Lawyers who do insurance defense work are in the same situation as you are. You hit someone in a car, and you’re not paying for your lawyer out of your pocket. Those lawyers choose to do that work because it’s consistent work with a solvent party paying the bill. They argue over charges just like you do with health insurers, and so on and so forth.
The truth is that most physicians make a damn fine living in the current system, and for all their bitching are either financially unable or just too scared to take the risks a different system would entail.
Anonymous
You’re not allowed to, with Medicare. Acceptance of billing limitations in Blue Shield and Medicare is a condition of licensure in Massachusetts.
Anonymous
Oh, and you’re not allowed to with Medicaid and Worker’s Comp.
I’ve had my share of patients present, saying they have no insurance, they’ll pay fee-for-service.
They pay, then just as a certain “look-back” window hits, they say, “oh, by the way, I had Medicaid”, or “my sprained ankle is a ten-year-old Comp claim from another state, so reopen it”.
By law, I have no choice. Well, the patient is shown the door, but aside from that. This, of course, is accompanied by the usual badmouthing, in the town, in the press, and sometimes with the Board, for not playing ball with the system and being only concerned about money.
Anonymous
How do you know patients wouldn’t participate in an alternative scheme?
Because the law prohibits it. I CANNOT charge what I want to a medicare eligible patient and balance bill. No matter what you say, it is ILLEGAL. Now, I can choose to opt out of medicare, and bill what I want, but the patient can then not choose to apply what medicare would have paid against my bill. That is a condition of opting out – receiving no payments from medicare, and the patients cannot be reimbursed by medicare.
So they have NO choice. I can offer all of the distinct features I like, and the patients CANNOT apply the medicare payment against my bill under any circumstances – unless I agree to take only what medicare allows – a price control.
Please pay attention, class.
It’s not the same as insurance work for lawyers. Even in insurance work, the lawyer is not prohibited from charging the client for other services, not related to the insurance claim, based SOLELY ON THEIR AGE. Thats right, students, if your patient is 65 or over, or totally disabled, there is NO mechanism to apply medicare reimbursement against your larger-than-medicare-allows bill for better/unique/distinct services, ever. The lawyer can offer additional service to his insurance clients, like drafting a will, or whatever, without restriction.
I am still waiting for someone to name another profession wherein reimbursement to the professional for services provided by an individual professional are mandated by law, for an entire class of clientele.
Anonymous
“This, of course, is accompanied by the usual badmouthing, in the town, in the press, and sometimes with the Board, for not playing ball with the system and being only concerned about money. “
So? What do you care? Does the press or board pay your bills? Do you really want those in town who bitch about having to pay as your patients?
Who cares? You’re not running a charity.
Again, this is how the free market works.
Don’t practice in Massachusetts. That will change things really quick. It appears, though, that a pretty decent living can be had in Mass., because they have plenty of docs.
Anonymous
They have plenty of docs, the highest physician to patient ratio in the USA. Problem is, most are doing academics, research, etc., as it is actually difficult to access docs there, at least for primary care.
http://tinyurl.com/33eebd
Anonymous
>>if your patient is 65 or over, or totally disabled, there is NO mechanism to apply medicare reimbursement against your larger-than-medicare-allows bill for better/unique/distinct services, ever.
But in the UK, docs have NHS practices and parallel private practices. You can see them in the NHS, with whatever waits accompany that, or you can see the same person privately, with quick access, but you pay for it.

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