How are doctors paid in hospitals (esp. if Medicare)?

[InterestedOutsider]

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Hi there,

I am doing some research on health topics in the US and I am struggling to understand how hospital doctors are paid. It would be fantastic if somebody would take the time to help me a bit!

So if a Medicare patient is treated as an inpatient in a hospital, I understand that the hospital bills Medicare for the appropriate DRG.
Do I get it correctly that most doctors working in hospitals are not employees but they would separately bill Medicare for each service?
And how would it work if it weren't a Medicare patient?

Thank you!!

 

[libertyyne]

This is my rudimentary understanding.
1. There are multiple types of medicare A, B . one is for hospital services and the other for physican services for billing.
2. There are varied sorts of arrangements, sometimes even if the physican is not an employee the physician works for a group that is contracted by the hospital to take care of the patients. In which case the physician group gets paid and the doctor gets a cut of that.
3. Private insurance reimbursement also varies may be for services rendered or may be lump sum payments for DRGs or may even be population management HMO arrangements where the hospital/group gets a lump sum for taking care of x amount of patients regardless how much they utilize. Medicare has also been testing medical home models and population based models which the ACA utlimately set up as Accountable care organizations with cost savings.
4. Proceduralists still tend to get paid by proccedure so a heart cath, spinal fusion, Colonoscopy etc may get paid by the procedure/ complexity vs the actual DRG.

Point 4 gets complicated sometimes due to the fact that the patient may be admitted under x and need some other procedure y. Hospitals sometimes then discharge the patient and ask them to have the procedure done on an outpatient basis .
Another item worth considering is readmissions are quality dings to the hospital and medicare may refuse to reimburse a readmission within 30 days.( sometimes this happens even if the patient is coming in for a different reason heart failure exacerbation vs trauma).
There are also quality bonuses/penalties that hospitals face if they fall above the number of HAI, falls with injuries etc.
Also medicare will sometimes straight up not reimburse you if there is a quality concern during a stay like an HAI , fall with injury , wrong site procedure etc.

 

[InterestedOutsider]

Thanks a lot for your help, it's very much appreciated!

So just to be sure:

For a Medicare in-patient the hospital gets whatever the DRG is worth and the physician (or the physician group she's employed at) gets paid per service? I.e. an additional services does normally not cause any additional payment for the hospital because it's included in the DRG, but for the physician (or physician group) it means more money?

Also do the physicians pay the hospitals for using their facilities? Or do the hospitals pay the physicians? Or do they just agree on working together, but otherwise they are financially separate, each getting reimbursed separately (in the case of Medicare)?


Again, thank you!

 

[libertyyne]

https://www.merritthawkins.com/uploadedFiles/MerrittHawkins/Pdf/mhawhitepaper_reimbursement.pdf

I believe DRGs do not reimburse for physician services. I could be wrong though.

 

[werd]

so, many physicians that see patients in the hospital are hospital employees. they are given a set salary or income, and the hospital bills and collects for the physician's services. some physicians that see inpatients are in their own private practice. in this case, the hospital bills medicare (or any other insurance) for the hospital stay, the patient's meds that are given, etc., but the physician bills medicare for the particular service he/she provided and the physician's private practice receives the reimbursement. medicare vs. private insurance is exactly the same in terms of who bills for the service and who receives the reimbursement.

 

[sliceofbread136]

https://www.merritthawkins.com/uploadedFiles/MerrittHawkins/Pdf/mhawhitepaper_reimbursement.pdf

I believe DRGs do not reimburse for physician services. I could be wrong though.

Pretty sure this is correct. DRGs compensate the hospital not the physician, however how you code your DRGs based on your note affects the hospital’s measure of your “quality” based on outcomes and how much income you are generating. So while it would affect a hospitalists immediate income it could affect promotions etc.

Bill for service is different and you get into needing things like a 10x3 ros and 4x4 exam and complexity of mdm.

 

[sliceofbread136]

I do believe I have heard the physician compensate side (pretty sure this has a special name) may be switching to a drg system as well

 

[InterestedOutsider]

Thank you everyone!

So unless the doctor is an employee of the hospital, the doctor bills Medicare separately for his/her services.

In the case of the doctor not being an employee: Do the physicians pay sth also to the hospital for the use of the facilities or do the hospitals pay sth to the doctors for them using their facilities?

 

[Osteoth]

Thank you everyone!

So unless the doctor is an employee of the hospital, the doctor bills Medicare separately for his/her services.

In the case of the doctor not being an employee: Do the physicians pay sth also to the hospital for the use of the facilities or do the hospitals pay sth to the doctors for them using their facilities?

Depends on the arrangement. The big money maker in patient care is being able to charge the "facility fee", which hospitals generally do. In certain states it is illegal for doctors to own facilities aka hospitals, so in order to see patients if they are in a private practice model they basically pay the hospitals the facility fee and taken the provider fee.

The big money is owning the facilities though, because you can generate income on patients you don't see by hiring other practitioners.

 

[InterestedOutsider]

Depends on the arrangement. The big money maker in patient care is being able to charge the "facility fee", which hospitals generally do. In certain states it is illegal for doctors to own facilities aka hospitals, so in order to see patients if they are in a private practice model they basically pay the hospitals the facility fee and taken the provider fee.

The big money is owning the facilities though, because you can generate income on patients you don't see by hiring other practitioners.

Got it, thanks!
So in the typical case, the hospitals gets money via the payment from health insurer (e.g. Medicare) for the DRG as well as the facility fee from the doctors... and the doctors bill their services to the health insurers directly, e.g. Medicare.

 

[Osteoth]

Got it, thanks!
So in the typical case, the hospitals gets money via the payment from health insurer (e.g. Medicare) for the DRG as well as the facility fee from the doctors... and the doctors bill their services to the health insurers directly, e.g. Medicare.

Most typically these days doctors are employees of a hospital group and are paid a salary, but in a private practice model this could be the case. I'm not experienced enough with PP to say its "typical", but I'd imagine the physician group would keep track of their own billing.