How do I know if my reimbursement is high enough?

[shaggybill]

About to sign a contract for my first physician job. Its a 1099 position that will involve some driving to different facilities each day (2 max). It's extremely niche, probably 1 or 2 CPT codes, and probably 100% Medicare/medicaid. I looked up the CMS payment for the most commonly billing code and CMS pays $72, I will be paid $22 for that code. Does this seem on the low end? Or am I thinking about this the wrong way?

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[NotAProgDirector]

Let's say you want to target a salary of $200K.

52 weeks/yr - 4 weeks vac - 2 weeks CME - 2 weeks holidays = 44 weeks.

200K / 44 weeks / 5 days per week = $900 per day

900 / 22 = 41. You'd need to bill 41 times per day, every day, to GROSS 200K. Then you'll have the double FICA taxes, costs for driving to these two sites, etc.

So whether this is "worth it" or not depends on how much work it is, and how much you want to make.

Also you should assume that Medicaid will pay you somewhere close to zero for everything you do. And wll you get paid when you do the service, or when Medicare/Medicaid actually pays -- because the latter could be weeks or months later.

 

[NotAProgDirector]

Reviewing your post history, I see that you never completed a residency. In that case, whether or not this is a "good deal" or not, if it's a way to get your foot in the door may be worth doing.

 

[shaggybill]

Yes, I completed about 60% of my residency. For my case, I understand when getting a job as a non-BC doc, beggars can't be choosers. That being said, what I'll be doing doesn't require a rare or complicated skillset and being able to get a medical license (along with yearly CME) is more than enough to do the work, so I don't want to get taken advantage of either. I am grateful for the opportunity, however. My medical license does have worth, I just don't have the experience to know how much negotiating power it comes with. Presumably not much. Thank you for the helpful reply.

Also, just a side note, most (~95% +) of these pt encounters will include a non-complicated procedure that reimburses about $20, so that will help reduce the number of pts I need to see to meet whatever income goal I set.

 

[shaggybill]

Also you should assume that Medicaid will pay you somewhere close to zero for everything you do. And wll you get paid when you do the service, or when Medicare/Medicaid actually pays -- because the latter could be weeks or months later.

The vast vast majority will be Medicare, not Medicaid. Hopefully they pay better/faster than Medicaid. And unfortunately, the procedures are paid when Medicare pays. The visit itself is paid for on the following payday.

 

[RangerBob]

The vast vast majority will be Medicare, not Medicaid. Hopefully they pay better/faster than Medicaid. And unfortunately, the procedures are paid when Medicare pays. The visit itself is paid for on the following payday.

Medicare pays quicker than all others-I get paid within two weeks of my billers submitting charges, unless they ask for documentation or there’s some sort of error.

Medicaid takes at least a few months to see a check. It doesn’t pay nothing, but it’s less than half of what Medicare pays. I see Medicaid as getting paid a little bit for patients that would’ve been charity cases in the past.

Make sure to look up all the deductions you can take advantage of as a 1099 contractor. You should be able to deduct mileage, health insurance, etc. And don’t forget the pass-through deduction. You’ll probably want to meet with an accountant at least once, if not have one regularly do your taxes for you.

 

[thumbz]

So I may not be understanding exactly what you're getting at - are you going to be direct billing Medicare/aid or are you working with a group and you're a contracted employee but using their coders, nurses, supplies, etc?

If you're an employee then getting paid $22 for a $72 code makes sense. Your employer can anticipate actually getting $50 on average for the code, and your employer needs to cover their overhead (nurses, equipment, facility, power, etc). Unless you're already looking at the work RVU, in which case I'm not sure how you found out what Medicare/aid pays for that, I've never been able to unlock the mysteries of that box. Even then you need to consider what CMS says they reimburse and what they actually reimburse are vastly different.

Now keep in mind, lets say you bill a 99214. The wRVU is 1.44, so you'll actually make $42 for seeing that patient because it's worth more than 1 RVU to you.

As aPD mentioned, you're not residency trained. I recommend getting your foot in the door, and even if you're grossly underpaid stick it out for a little experience and work hard as hell so you can then leverage your new found experience and reputation into more $$$. When you apply for a new job, if you can say "My RVUs were at the national 98th percentile for this last job I was at" you will 100% be able to leverage that into more money (trust me, this is personal experience).

 

[shaggybill]

Thank you both for the insight and information.

I will be using a CPA to help me figure out how to optimize the taxes/deductions, as well as a physician-specializing financial planner to help with the rest of the financial aspects.

My position is as IC, but the company will be doing all the billing and paying Biweekly, and procedures will be paid "when company is paid".

I arrived at the payment by looking at CMS 2019 Physician Fee Schedule which shows one of the CPT codes I'll be using as 2 RVUs with a CMS payment of $72.08.

Search the Physician Fee Schedule | CMS

Downloads Physician Fee Schedule Guide (PDF)

www.cms.gov

Again, I'm brand new at this so I may not be doing this correctly. And I knew regular insurance rarely paid 100%, but I wasn't aware that Medicare was similar. Good to know.