doctalaughs

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Derm hopeful here. Assuming I can match Derm, does a 3-4 day work week with a $500,000 salary really await me?

This seems too good to be true https://www.merritthawkins.com/uploadedFiles/MerrittHawkins_Dermatology_WhitePaper_2020.pdf

In short, no. You work a lot for that salary.

Opportunity for that mid career (and much more) if you build a successful practice up, which requires a lot of work - and unfortunately now an uphill battle for new grads depending on location.

I can easily clear that now with ancillary services and partnership even cutting back to 3-4 days. Our new hires, not so much (they can clear that on production by working hard after a few years but not working 3 days for sure).

Hard to hit as well I imagine joining PE or big system, or academics (not impossible). The only way to make significantly north of that is be an owner.
 
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reno911

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It depends.

If you work 4 ten hour days (so still a full 40hr work week), then you can find jobs with that type of compensation (provided your schedule is full).

If you work 3 eight hour days, then it's going to be very tough. Not impossible, but there is going to have to be something special about the situation.

Above applies to the present. If you haven't even started residency yet, who knows what things will be like when you're done? I'm assuming it will be worse.
 
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dermie1985

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Derm hopeful here. Assuming I can match Derm, does a 3-4 day work week with a $500,000 salary really await me?

This seems too good to be true https://www.merritthawkins.com/uploadedFiles/MerrittHawkins_Dermatology_WhitePaper_2020.pdf
It depends on a lot of factors, but I would not expect to make $500k for a 3 day work week, especially as a general dermatologist. You could probably make that amount with a 4-day work working extremely long, hard days. I'd say most dermatologists out of residency would expect to make something around $350-450k for a more typical 4-5 day work week, less in academics. Though, it really depends on where you want to practice and in what capacity/lifestyle.
 
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Sure. If you cram five days of work into three days. There’s no free lunch. You can be one of those mills that runs in 80 patients a day and biopsies everything, and probably hit that number with a three day work week. But practicing good quality ethical care at normal hours, I think it would be very difficult to hit.

This is of course talking about your own production. If you were supervising multiple mid levels or have big streams of ancillary income, then the math changes.
 
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$100 x 40% = $40 per patient take home.
$500,000 / 50 weeks = $10K/week.
$10K/3 day = $3,333 per day
to make 500K working 3 days a week you need to see 83 patients a day.

1. you have to join a practice right out the gate that can give you 83 patients.
2. If you can collect $200 a patient for the practice you will only need 41 patients a day. Most likely the average collection is $125 to $170 a patient so we are looking at 50-70 patients a day depending on the patient type and collection rate of the practice.
3. OraclePL is right on.
 
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doctalaughs

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$100 x 40% = $40 per patient take home.
$500,000 / 50 weeks = $10K/week.
$10K/3 day = $3,333 per day
to make 500K working 3 days a week you need to see 83 patients a day.

1. you have to join a practice right out the gate that can give you 83 patients.
2. If you can collect $200 a patient for the practice you will only need 41 patients a day. Most likely the average collection is $125 to $170 a patient so we are looking at 50-70 patients a day depending on the patient type and collection rate of the practice.
3. OraclePL is right on.

This napkin math is a very good estimate of reality in most practices.

We bill over 200/patient but collect closer to $180. We aren’t a mill so our dermatologists average 35-40/day, meaning 4-5 days to hit that number on production. Cosmetics and procedures can offset that some, but most also take more than 2 weeks of vacation too.

I suppose if you are a true assembly-line practice you could churn 60-70 a day and hit that in 3 days. In most markets with any real competition though patients aren’t happy with 6-10 minute visits — they will leave your practice for one down the road.
 
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It sounded too good to be true. Although derm is unmatched in terms of lifestyle for the moment hope the coming years and mid level encroachment don’t put an end to that.
 
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This napkin math is a very good estimate of reality in most practices.

We bill over 200/patient but collect closer to $180. We aren’t a mill so our dermatologists average 35-40/day, meaning 4-5 days to hit that number on production. Cosmetics and procedures can offset that some, but most also take more than 2 weeks of vacation too.

I suppose if you are a true assembly-line practice you could churn 60-70 a day and hit that in 3 days. In most markets with any real competition though patients aren’t happy with 6-10 minute visits — they will leave your practice for one down the road.
So 180x40 means you are collecting 7200 per day? Is that profit or what is profit in your pocket
 
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So 180x40 means you are collecting 7200 per day? Is that profit or what is profit in your pocket
No. That's an estimate of revenue for the practice. You'll make a % of that.

There's also a lot of variation out there, $180 is on the higher end.
 
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doctalaughs

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So 180x40 means you are collecting 7200 per day? Is that profit or what is profit in your pocket

Prior poster is correct. That is the rough revenue/ collections generated by a dermatologist with a full schedule. There is overhead (paying staff, rent, lights, equipment, benefits etc) that needs to be subtracted from that revenue before you can calculate the practice “profit”— which then translates to doc salaries.
 
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doctalaughs

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Sounds good, would overhead be around 50 percent?

Roughly yes. But most take home based on their contracts 40% of their production (that 10% gets reinvested in the practice or distributed to partners that built the practice up from the beginning). Also, don’t forget most people don’t work 5 days seeing 40 patients/day (average 4 for “full time”) and don’t work 52 weeks a year.

You can do the math.
 
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My dermatologist gets $110 more for a 99214 than I get paid as a Psychiatrist in my practice for one insurance company. This is actually one of my better payers. If I see two patients with this insurance company per hour - routine psychiatry - in comparison to 4 for dermatology, this is a difference of $800/hr.

I.e. my dermatologist, just on this insurance for a level 4 is potentially making $800/hr more than I am. This difference is more than enough to cover the increased MA staff or even medicare/medicaid payer mix I don't have, when extrapolated over a whole year.

I can see why Private Equity is seeking to gobble up dermatology. Dermatologists really should be working for themselves only, and not doing employed gigs. Just wow.
 
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My dermatologist gets $110 more for a 99214 than I get paid as a Psychiatrist in my practice for one insurance company. This is actually one of my better payers. If I see two patients with this insurance company per hour - routine psychiatry - in comparison to 4 for dermatology, this is a difference of $800/hr.

I.e. my dermatologist, just on this insurance for a level 4 is potentially making $800/hr more than I am. This difference is more than enough to cover the increased MA staff or even medicare/medicaid payer mix I don't have, when extrapolated over a whole year.

I can see why Private Equity is seeking to gobble up dermatology. Dermatologists really should be working for themselves only, and not doing employed gigs. Just wow.
Why do they get so much more for the same billing?
 

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Why do they get so much more for the same billing?
Best guess is they are part of a Big Box shop and simply got a better contracted rate because of the size of the multispecialty group practice. I'm solo.
 

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So then working for yourself doesn’t make sense since you wouldn’t get the same rate?
Perhaps. We don't know why this insurance company pays me X and the dermatologist X+100.
Or perhaps it doesn't make sense that I'm taking insurance and should simply do cash only.
Or perhaps dermatology is more financially rewarding.
 
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doctalaughs

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My dermatologist gets $110 more for a 99214 than I get paid as a Psychiatrist in my practice for one insurance company. This is actually one of my better payers. If I see two patients with this insurance company per hour - routine psychiatry - in comparison to 4 for dermatology, this is a difference of $800/hr.

I.e. my dermatologist, just on this insurance for a level 4 is potentially making $800/hr more than I am. This difference is more than enough to cover the increased MA staff or even medicare/medicaid payer mix I don't have, when extrapolated over a whole year.

I can see why Private Equity is seeking to gobble up dermatology. Dermatologists really should be working for themselves only, and not doing employed gigs. Just wow.

It’s not easy to justify a 99214 in the 2021 E/m rules for a derm visit. You can for stuff like accutane when you add the lab review in - but screening skin exams just don’t cut it (I always thought 99214 was over billing for bread/butter derm although some disagree). I think dermatologists billing all 99214s this year should be VERY careful to make sure documentation justifies it.

That being said $110 is a big spread. Are you sure you aren’t confusing what they are billing insurance vs contracted actual collection? What do you collect for a 99214?

Also, don’t forget the average derm practice has way higher overhead than psychiatry practices. We probably have to bill 2/3 more to take home the same profit, I imagine.
 
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I think this is more a factor of you getting ****ty reimbursement than anything innate to derm or psych. Since when are insurance companies reimbursing the same code at different levels by specialty? Are you sure it’s not a 99214+ a procedural code?

Also, $180 per encounter is pretty high. Last number I saw at the AAD meeting a few years ago was $135 average. This is also, incidentally, what at least several private equity groups use for their internal calculations for new hire guarantees.

Something to also be aware of: BCBS of MA has gone through with modifier 25 cuts (50% reduction for the second code). CMS proposed this a year or two ago before backing, but it’s only a matter of time before more insurers follow suit. This will be devastating for general derm collections.
 
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It’s not easy to justify a 99214 in the 2021 E/m rules for a derm visit. You can for stuff like accutane when you add the lab review in - but screening skin exams just don’t cut it (I always thought 99214 was over billing for bread/butter derm although some disagree). I think dermatologists billing all 99214s this year should be VERY careful to make sure documentation justifies it.

That being said $110 is a big spread. Are you sure you aren’t confusing what they are billing insurance vs contracted actual collection? What do you collect for a 99214?

Also, don’t forget the average derm practice has way higher overhead than psychiatry practices. We probably have to bill 2/3 more to take home the same profit, I imagine.
I've been in private practice for several years now. I know how to submit claims, all the modifiers, and resubmissions, and especially how to read an EOB. The billed amount is well in excess of the insurance rate. The 99214 for my derm compared to what I get for the negotiated rate is X vs X+$110.

The overhead in Derm is not that substantially more than Psych, when comparing an insurance practice to an insurance practice.
 

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I think this is more a factor of you getting ****ty reimbursement than anything innate to derm or psych. Since when are insurance companies reimbursing the same code at different levels by specialty? Are you sure it’s not a 99214+ a procedural code?

Also, $180 per encounter is pretty high. Last number I saw at the AAD meeting a few years ago was $135 average. This is also, incidentally, what at least several private equity groups use for their internal calculations for new hire guarantees.
They've always been reimbursing Psychiatry less than other specialties.

Of course PE will use a number like $135, because that furthers their agenda of keeping more money in their pocket. Don't trust the numbers presented at national meetings or societies or even MGMA - they only serve to hasten, and tamp down the rates for employed positions.
 
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doctalaughs

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I've been in private practice for several years now. I know how to submit claims, all the modifiers, and resubmissions, and especially how to read an EOB. The billed amount is well in excess of the insurance rate. The 99214 for my derm compared to what I get for the negotiated rate is X vs X+$110.

The overhead in Derm is not that substantially more than Psych, when comparing an insurance practice to an insurance practice.

So what is your overhead as percentage of collections yearly? How many Square feet do you need to lease and how many staff do you employ per doc (solo? Group?).

I don’t profess to know much about psychiatry practices. I have exactly 1 good friend in psychiatry and his overhead is significantly lower than mine, understandably (given much fewer staff, less clinic space and almost no equipment needed).
 
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doctalaughs

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Of course PE will use a number like $135, because that furthers their agenda of keeping more money in their pocket. Don't trust the numbers presented at national meetings or societies or even MGMA - they only serve to hasten, and tamp down the rates for employed positions.

I would agree than $135 is probably an underestimate (not to mention this number was a few years ago). I’m guessing 165 is closer to the truth.

I find it difficult to believe PE is somehow collecting $200+ for a 99214 though (e/m alone no procedure), which would be much more than twice Medicare.... unless your $110 spread means you are collecting like 80 bucks or something which would be an issue incredibly raw deal.
 
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I would agree than $135 is probably an underestimate (not to mention this number was a few years ago). I’m guessing 165 is closer to the truth.

I find it difficult to believe PE is somehow collecting $200+ for a 99214 though (e/m alone no procedure), which would be much more than twice Medicare.... unless your $110 spread means you are collecting like 80 bucks or something which would be an issue incredibly raw deal.
I do think he’s probably collecting 80 bucks haha it’s pretty sad what psychiatry pays compared to you guys
 
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My dermatologist collected $292 for a 99214.
 
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Nonsense. Nobody is collecting 300 for 99214. Billing maybe, collecting 200 at best, likely less.
 
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doctalaughs

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My dermatologist collected $292 for a 99214.

Nah, don’t buy it. That’s about 350% of Medicare. Don’t see why any insurance company would accept that - PE firms in derm hardly have the market cornered (and even if they did it would be pretty unheard of).

In private practice if I could collect that multiplier on everything I’d easily clear 2, 2.5 mill/yr take home after overhead (on my own collections only). Sound fishy.
 
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You caught me. I'm a 10+ year member who has a 2+ year thread old detailing the entirety of my private practice start up with complete finance disclosure, even a how to guide for opening up a private practice, and I'm going to get some doctalaughs by trolling the derm forum with a made up EOB.

Here's a thread for you to read, first few pages are rough but it gets easier as you progress:

I'm not wasting my time to scan and de-identify my own personal information because y'all doubt it. Seriously, what purpose would I have to post such a fallacy?

This information is my personal EOB statement. This is something I can share, and am doing so maybe it'll help y'all out and draw attention to what derm contract rates are (or could be?).
 
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I just pulled up an older EOB for the same doc, at the same multispecialty group practice (not a PE firm), and this was with a different insurance company for that visit. Same basic quick skin check, 99214 was reimbursed at $303.

This insurance company pays me ~$160 less.
 

doctalaughs

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I just pulled up an older EOB for the same doc, at the same multispecialty group practice (not a PE firm), and this was with a different insurance company for that visit. Same basic quick skin check, 99214 was reimbursed at $303.

This insurance company pays me ~$160 less.

Hey, I’m sure you believe 100% that’s what he’s collecting —- I’m just saying, don’t pretend that’s a remotely common scenario in dermatology. If true, this would be a 0.1% situation (or maybe pulling something shady in billing? IMO 99214 for a quick straightforward skin exam is already shady though I know some disagree)

Think about it- most dermatology visits also involve a procedure (or several) as well. So then we are talking collecting maybe 400-500 average dollars per patient times likely 35-40 patients a day as an average practice (some see 60+). Do the math and ask if that type of money sounds like even 1% of derms. I’m guessing that I know a LOT more dermatologists than you do (and some that do VERY well) but it still would automatically be categorized as a freak outlier just based on hard math.
 
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Ok, your dermatologist earns 3x the norm. What was the point again? Maybe you can do a psych-derm fellowship and apply to your dermatologist office to get that reimbursement rate. Then you could enjoy that stellar income and stop looking over your neighbors fence while trying to convince of group of dermatologists that they’re overpaid for their work and their overhead is actually quite low. Thanks for the education.
 
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Ok, your dermatologist earns 3x the norm. What was the point again? Maybe you can do a psych-derm fellowship and apply to your dermatologist office to get that reimbursement rate. Then you could enjoy that stellar income and stop looking over your neighbors fence while trying to convince of group of dermatologists that they’re overpaid for their work and their overhead is actually quite low. Thanks for the education.
Lol human nature is so funny, even if someone was paid 1k per follow up they would still argue it’s not enough. Good ol’ human behavior..I don’t blame you though I would also want more
 

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This thread reminds me of that scene in kill bill vol. 2 where bar owner says “what’re trying to convince me of? That you’re as useless as an a**hole right here (pointing to elbow)?” I don’t care who gets paid what. If you can negotiate a great contract, kudos, fair market, congrats. It just seems the subtext is that derms are vastly overpaid, which is a tough sell in a forum like this. Unless I missed something?
Was one argument that private equity will negotiate these stellar contracts and take all the cream? If so, go ahead and start your own practice and enjoy these stellar rates for yourself.
It seems to me your time would be better spent negotiating more favorable contracts for yourself than perseverating on the reimbursement of other specialties.
I suspect if you examined the reimbursement for 99214 across specialities in the US it would revert to a mean where everyone was being paid pretty much the same. There will always be outliers, and it’s not specific to derm.
 
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No the point isn't derms are overpaid. The point is PE is cutting out a lot of income in the pocket of a dermatologist. My comments were meant to advocate more indepenednt practice by dermatology, to reveal their disparity between these reference 135 or 180 per encounter 'norms.' To let y'all know there is a lot of money out there being withheld.

Second was to post my own shock of the difference in 99214 reimbursement. I know psychiatry is bad and we are always the field Scat on by hospitals, insurance, etc, etc but this was a new level of disparity, and eye opener for myself.

I'm not coming here to kick your shins. Dial down y'all sensitivity and see this for what it is, a good will showing of numbers and a curiosity of why dermatologists are voluntarily choosing to enter into employment contracts when they can have the gift of their own private practice?
 
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doctalaughs

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No the point isn't derms are overpaid. The point is PE is cutting out a lot of income in the pocket of a dermatologist. My comments were meant to advocate more indepenednt practice by dermatology, to reveal their disparity between these reference 135 or 180 per encounter 'norms.' To let y'all know there is a lot of money out there being withheld.

Second was to post my own shock of the difference in 99214 reimbursement. I know psychiatry is bad and we are always the field Scat on by hospitals, insurance, etc, etc but this was a new level of disparity, and eye opener for myself.

I'm not coming here to kick your shins. Dial down y'all sensitivity and see this for what it is, a good will showing of numbers and a curiosity of why dermatologists are voluntarily choosing to enter into employment contracts when they can have the gift of their own private practice?

Oh, I agree that PE is killing our field and would encourage new dermatologists to steer clear if they can.

However, I don’t see how your particular dermatologist collecting an outlandish fee has anything to do with your point?

You have multiple dermatologists in private practices on this forum (myself ~15 years) saying that is not reality on the ground.....

Out of curiosity is that derm academic or hospital affiliated? I wonder if there is some sort of shady facility fee in that $300 (which he certainly wouldn’t be seeing in his paycheck and neither would any private practice).
 
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Nether, as already mentioned it is a large multispecialty group that is in theory doctor run. Think like a wannabe Cleveland clinic but on a much tinier scale.

There was no facility fee related to it. As previously posted I know what an EOB is and how to read them. This was just 99214. And two separate insurance companies over a 2 year period. So not even a one off single insurance company anomaly.
 
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doctalaughs

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Nether, as already mentioned it is a large multispecialty group that is in theory doctor run. Think like a wannabe Cleveland clinic but on a much tinier scale.

There was no facility fee related to it. As previously posted I know what an EOB is and how to read them. This was just 99214. And two separate insurance companies over a 2 year period. So not even a one off single insurance company anomaly.

Well I’ll take your word — and good for that guy.

If I could have negotiated that in my decade plus of haggling with insurance companies I would in a heartbeat (and you would too, no doubt). In fact, I’d probably make my 2-3 million off that per year for a few years and be long retired by now. Hell, I even could be a d-bag partner and pay my new derm employee colleagues 350k and make 2 mill off each of them, as well!

Too bad that’s not anything close to reality for 99.9% of dermatologists (and physicians in general).
 
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It’s not easy to justify a 99214 in the 2021 E/m rules for a derm visit. You can for stuff like accutane when you add the lab review in - but screening skin exams just don’t cut it (I always thought 99214 was over billing for bread/butter derm although some disagree). I think dermatologists billing all 99214s this year should be VERY careful to make sure documentation justifies it.

That being said $110 is a big spread. Are you sure you aren’t confusing what they are billing insurance vs contracted actual collection? What do you collect for a 99214?

Also, don’t forget the average derm practice has way higher overhead than psychiatry practices. We probably have to bill 2/3 more to take home the same profit, I imagine.
Agree re: 99214. Most skin exams are now level 3 for me unless I'm also managing something else that requires a prescription (e.g. acne/rosacea, eczema, etc.) at the same visit.

Level 4 returns aren't terribly hard to get to though, as long as you are (1) managing 2 stable chronic problems, including at least 1 that requires a prescription, or (2) 1 chronic issue that is worsening and requires a prescription. I find the lab testing/note review section of E/M coding usually is not usually relevant for coding, except for a few situations, as the new system only requires 2/3 E/M categories to be at the coding level to bill at that level, and the # of problems addresses and complexity (e.g. OTC or prescription drug management) tend to be the more important differentiating factors. It's also quite annoying to document lab testing/note review, so I usually ignore unless I feel it's necessary to reach a certain billing category. I do see, with the new E/M 2021 rules, new visits are MUCH easier to get to Level 3, so while the return visit coding has gone down for skin checks, the new visit code levels are increased and I think it mostly evens out for derm in terms of E/M.
 
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No the point isn't derms are overpaid. The point is PE is cutting out a lot of income in the pocket of a dermatologist. My comments were meant to advocate more indepenednt practice by dermatology, to reveal their disparity between these reference 135 or 180 per encounter 'norms.' To let y'all know there is a lot of money out there being withheld.

Second was to post my own shock of the difference in 99214 reimbursement. I know psychiatry is bad and we are always the field Scat on by hospitals, insurance, etc, etc but this was a new level of disparity, and eye opener for myself.

I'm not coming here to kick your shins. Dial down y'all sensitivity and see this for what it is, a good will showing of numbers and a curiosity of why dermatologists are voluntarily choosing to enter into employment contracts when they can have the gift of their own private practice?
Apologies if I missed it — but what was the employment situation with this dermatologist? Is this a small town with no decent nearby metro? Is there an IPA that this doc is contracted through? Reason being, I cannot remember a time where E&M was 2.5 to 3x CY MC. I’ve seen some procedure codes that high, but it has been some time. Around here, E&M is below MC for most major commercial plans for small practices. For example, my new “improved“ fee schedule for the largest insurer here is for $154 for a 99214.... and that is an improvement.
 

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Apologies if I missed it — but what was the employment situation with this dermatologist? Is this a small town with no decent nearby metro? Is there an IPA that this doc is contracted through? Reason being, I cannot remember a time where E&M was 2.5 to 3x CY MC. I’ve seen some procedure codes that high, but it has been some time. Around here, E&M is below MC for most major commercial plans for small practices. For example, my new “improved“ fee schedule for the largest insurer here is for $154 for a 99214.... and that is an improvement.
On edit, never mind — did not read far enough down.

FMsoloL
 

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Apologies if I missed it — but what was the employment situation with this dermatologist? Is this a small town with no decent nearby metro? Is there an IPA that this doc is contracted through? Reason being, I cannot remember a time where E&M was 2.5 to 3x CY MC. I’ve seen some procedure codes that high, but it has been some time. Around here, E&M is below MC for most major commercial plans for small practices. For example, my new “improved“ fee schedule for the largest insurer here is for $154 for a 99214.... and that is an improvement.
Looks like a similar boat as what Psychiatry typically sees.

This must simply be a geographic anomaly paired up with this multispecialty clinic having negotiating power to get these rates. Oddly though, in this metro there are several other large health systems so they don't exactly have majority market share to push back against the insurance companies.

Just baffling.

I looked way back over older EOBs and found the 99214 / $303, also pays $205 for a 99213 with a pediatric doc at this multispecialty clinic.

Kudos for this multispecialty clinic, but also sad because it will further their more aggressive expansions they've been doing lately.
 
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