Family Med private practice AMA

[Postictal Raiden]

---

Members don't see this ad.

I'll try and make it simple.

So everything we physicians do has a procedure code associated with it (a CPT code). Office visits, appendectomies, c-sections, autopsies, lacerations, amputations, everything. Each CPT code has a value associated with it, called a Relative Value Unit, or RVU. This determines how much Medicare (and private insurance) pays for a given code. An RVU is worth a certain amount of money to Medicare. Let's say its $100 per RVU.

So if a regular office visit is worth 1 RVU, Medicare will pay $100. Let's say an appendectomy is worth 6.5 RVUs. That means a surgeon would get paid $650 for doing one.

That said, an RVU does take overhead into account. So the RVU is broken down further into 3 sections: physician work (wRVU), practice expense, and malpractice. There are worth, in order, 52%, 44%, 2% of each total RVU.

So for that $100 office visit, Medicare expects a physician to earn $52 of that while $44 goes to office overhead and $2 goes to malpractice.

So if we go to the Medicare Fee Schedule (Overview of the Medicare Physician Fee Schedule Search) and look up a 99213 which is the most common outpatient office visit code, in my area it is worth $70. So Medicare expects me to earn as pure income 52% of that, or $36.40. Its a 15 minute-type visit so I can do 4 in an hour which brings me to $145.6 per hour income by Medicare rules.

It gets more complicated as you get deeper into it, but that's the short version.

Now do the math for a medicaid patient in CA and your $146/hr will turn into $60, or even less because now you'll still have the same/higher overhead costs.

 

[QueenJames]

^^^

And add the fact that these rates CHANGE every certain amount of years due to the doucher politicians that are constantly trying to screw over doctors because they are "payed too much" and how everybody and their mother likes to go after the medicare budget.

Let's not forget to bring in the insurance companies either... who will try to find each and every way not to pay doctors their due money.

What docs used to reimbursed years ago... today's docs are seeing pennies on the dollar for.

Essentially...

All of this boils down to $$$.

YOLO BRO!

 

[VA Hopeful Dr]

Now do the math for a medicaid patient in CA and your $146/hr will turn into $60, or even less because now you'll still have the same/higher overhead costs.

That's why you don't live in California

 

[BorntobeDO?]

Now do the math for a medicaid patient in CA and your $146/hr will turn into $60, or even less because now you'll still have the same/higher overhead costs.

It is my understanding that one of the pros of california is that their medicaid rate matches the medicare, rather than the 38% of the rate it seems to be most everywhere else. Is this not true?

 

[Postictal Raiden]

It is my understanding that one of the pros of california is that their medicaid rate matches the medicare, rather than the 38% of the rate it seems to be most everywhere else. Is this not true?

They did match Medicare for a period of 2 years and then the incentive was expired. Not sure if there are any new developments I’m not aware of.

CA is one of the worst states when it comes to Medicaid reimbursement. Straight Medicaid (without HMO) reimburses about a third of Medicare rates. In me ighboring states like NV and AZ, straight Medicaid pays over 70% of what Medicare pays plus pts have a small copay. Other states like Alaska for example reimburse Medicaid at a much higher rate than Medicare!!!
Medicaid-to-Medicare Fee Index

 

[AlbinoHawk DO]

OP is also an actual physician seeing 40-50 patients a day rather than a pre-med who just got into med school spending most of his day jerking off and on SDN being a big man.

Calmeth the eff down little homie.

If you can't follow through, don't offer to do it. I bet you're a brown noser in school, but you don't need to be on SDN

 

[BorntobeDO?]

They did match Medicare for a period of 2 years and then the incentive was expired. Not sure if there are any new developments I’m not aware of.

CA is one of the worst states when it comes to Medicaid reimbursement. Straight Medicaid (without HMO) reimburses about a third of Medicare rates. In me ighboring states like NV and AZ, straight Medicaid pays over 70% of what Medicare pays plus pts have a small copay. Other states like Alaska for example reimburse Medicaid at a much higher rate than Medicare!!!
Medicaid-to-Medicare Fee Index

No kidding, Alaska and Montana here I come!

 

[group_theory]

If you can't follow through, don't offer to do it.

My sentiments exactly (the first part, not so much the second part ) - the OP offered to do AMA but never really followed up. I understand the OP is busy - so am I as an attending ... but if you're too busy to do an AMA, then don't do an AMA.

But I didn't want to call out the OP because I wanted to encourage other attendings (whether new attendings, or established attendings, junior faculty members or senior faculty members) to do AMA to offer SDN the opportunities to learn.

Shameless plug - I'm glad the discussion turned towards finance and reimbursement - something that is almost never mentioned in medical school (almost like a taboo) and rarely mentioned or poorly taught in residency. I started a couple threads in the recent past to help educate/discuss

How a doctor makes money?

How a doctor makes money (Part II)

 

[Postictal Raiden]

My sentiments exactly (the first part, not so much the second part ) - the OP offered to do AMA but never really followed up. I understand the OP is busy - so am I as an attending ... but if you're too busy to do an AMA, then don't do an AMA.

But I didn't want to call out the OP because I wanted to encourage other attendings (whether new attendings, or established attendings, junior faculty members or senior faculty members) to do AMA to offer SDN the opportunities to learn.

Shameless plug - I'm glad the discussion turned towards finance and reimbursement - something that is almost never mentioned in medical school (almost like a taboo) and rarely mentioned or poorly taught in residency. I started a couple threads in the recent past to help educate/discuss

How a doctor makes money?

How a doctor makes money (Part II)

Allow me to call you out on this 😎.

I asked you a question on the original "How a doctor makes money?" and you still never responded. It was regarding straight medicaid vs HMO medicaid reimbursement.

Thankfully others chimed in and answered my question.

 

[group_theory]

Allow me to call you out on this 😎.

I asked you a question on the original "How a doctor makes money?" and you still never responded. It was regarding straight medicaid vs HMO medicaid reimbursement.

Thankfully others chimed in and answered my question.

Because others have already answered by the next day. did you want an attending attestation? (agree with above note as written)

 

[NecrotizingFasciitis]

I'll try and make it simple.

So everything we physicians do has a procedure code associated with it (a CPT code). Office visits, appendectomies, c-sections, autopsies, lacerations, amputations, everything. Each CPT code has a value associated with it, called a Relative Value Unit, or RVU. This determines how much Medicare (and private insurance) pays for a given code. An RVU is worth a certain amount of money to Medicare. Let's say its $100 per RVU.

So if a regular office visit is worth 1 RVU, Medicare will pay $100. Let's say an appendectomy is worth 6.5 RVUs. That means a surgeon would get paid $650 for doing one.

That said, an RVU does take overhead into account. So the RVU is broken down further into 3 sections: physician work (wRVU), practice expense, and malpractice. There are worth, in order, 52%, 44%, 2% of each total RVU.

So for that $100 office visit, Medicare expects a physician to earn $52 of that while $44 goes to office overhead and $2 goes to malpractice.

So if we go to the Medicare Fee Schedule (Overview of the Medicare Physician Fee Schedule Search) and look up a 99213 which is the most common outpatient office visit code, in my area it is worth $70. So Medicare expects me to earn as pure income 52% of that, or $36.40. Its a 15 minute-type visit so I can do 4 in an hour which brings me to $145.6 per hour income by Medicare rules.

It gets more complicated as you get deeper into it, but that's the short version.

This was beautifully explained. I'm one class into my MBA and you did a better job than was taught to me.

 

[deleted600623]

This is slightly unrelated but can someone explain why insurance companies reimburse roughly 50% of what is billed?

 

[VA Hopeful Dr]

This is slightly unrelated but can someone explain why insurance companies reimburse roughly 50% of what is billed?

Yes.

Insurance companies have a maximum they will pay for any given CPT code. However, if you submit a bill for less than that maximum they will pay that lesser amount.

To make sure this never happens, everyone bills WAY more than any insurance contract.

Let's say Medicare pays $120 for X, Blue Cross pays $150, and Cigna pays $140. I'm going to charge $250 to make sure that I get the maximum payment I can from everyone.