If you have a 30% medicare population. That means that 30% of all your billing is from medicare. It is that simple.
It's never that simple. Again, I do not have a "30% Medicare population." Approximately 30% of my
charges are Medicare. However, Medicare is the worst-performing payor we have, with the lowest collection percentage (I'm not talking about bad debt here, I'm talking about the difference between our fee schedule and what we collect from payors). Therefore, the net
collections are something less than 30% of the total.
As for patient volume, Medicare patients are high utilizers compared to most younger, healthier patients. The average number of visits per year for the typical Medicare patient is considerably higher than that of a non-Medicare patient. Many of my young patients don't even come in once a year, but I'm still their doctor, because it says so on their insurance card. You don't need vast numbers of Medicare patients to have a busy Medicare practice.
So if medicare cuts payments by 5% you lose 5% of 30%.
Not this year. The 5% cuts are across-the-board. If you factor in the increases in ambulatory CPT codes (which favor primary care), it's a wash.
Also, you mention that you can negotiate contracts with insurers. That sounds really good on paper. But the reality of it is that most insurance companies negotiate only so much.
It depends what you or your group brings to the table, and how badly they want you in their panel. We've done pretty well, actually.
Yes, you choose to drop certain insurance companies, but that only works if you are somewhere where competion is not king and the other insurance companies are strong enough with numbers to support your practice.
You have a keen grasp of the obvious.
As far as droping medicare. Well, there are some internal medicine practices out there that are 50% medicare. They are that way not by choice but by neccessity.
As I said earlier, you're only trapped if you built the cage yourself.
this is all big shot talk that means nothing when it comes to taking action.
There are already several insurance plans that we refuse to participate with because their reimbursement sucks, and we don't need 'em.
Our mission is to take care of patients. However, you have to constantly be looking after the business aspects of your practice if you're to survive. No margin, no mission.
Why don't you and your partners try it. Drop medicare and try to negotiate those higher paying contracts.
Again, from a primary care standpoint (most of our multispecialty group consists of primary care physicians), Medicare reimbursement is a wash this year, and we have several new physicians in the group who are growing their patient panels. We decided to continue to participate for now. We will re-evaluate Medicare on an annual basis. Our private insurance contracts receive similar attention.
<insert favorite sympathy song>
