Student Loans Now Harder To Pay Back

[exPCM]

Student loans just got a lot harder to pay back.


For immediate release:
Feb. 26, 2010

Washington, D.C. - A Medicare meltdown now seems certain, as the U.S. Senate has left early for the weekend, abandoning seniors, military families and baby boomers. The Senate failed to repeal the Medicare physician payment formula that will cause a drastic 21 percent payment cut to physicians who care for Medicare and TRICARE patients. On Monday, the 21 percent cut goes into effect, forcing many physicians to limit the number of Medicare and TRICARE patients they see in order to keep their practice doors open.
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In most every contract that physicians have, CIGNA, Untited, Aetna, etc. pay us based on Medicare rates, so essentially, I will be taking a 21% cut in pay for all of my paying patients, not just Medicare.

Here are real world numbers posted on Sermo by office based physicians:

1) since my expenses don't change and my overhead is about 50%, ----
i figure....

out 0f $100 collected- 50 to expense=50
now make that 100-21-50= $29

29/50=58%

so i am going to take home only 58% of my previous paycheck
assuming all medicare- a pretty fair assumption for me.

2) In my state, a 99213 pays 56. 99214 pays 87. or 224/ hr. 21% cut brings it down to 172.5/ hr. New patients pay less than this on a per hour basis. If you see patients 2100 hrs per year, your gross went from about $ 450,000 to 362,000.

expenses
2000 sqft lease @ 16/ ft 32,000
utilities 3,200
property tax 9,000
all insurances 24,000
equipment loans 29,000
office supplies 34,000
salaries for 3.5 fte's 136,000
benes 24,000
-----------------
$ 291,000
this doesn't include all expenses, my OH is actually higher than this. So your take home in this example went from $ 159,000 to $ 71,000. Less than your local high school principal. The 21% comes off the TOP. It is magnified more with higher expense ratios. At 50% expenses, your take home was reduced 42%.

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[deleted87716]

A Medicare meltdown now seems certain

The sky hasn't fallen quite yet.

"The Centers for Medicare & Medicaid Services (CMS) is working with Congress, health care providers, and the beneficiary community to avoid disruption in the delivery of health care services and payment of claims for physicians, non-physician practitioners, and other providers of services paid under the Medicare physician fee schedule. It has instructed its contractors to hold claims containing services paid under the Medicare Physician Fee Schedule (MPFS) for the first 10 business days of March. The holding of MPFS claims will only affect claims with dates of service beginning Mar. 1, 2010. This hold should have a minimum impact on provider cash flow because, under current law, clean electronic claims are not paid any sooner than 14 calendar days (29 for paper claims) after the date of receipt. Whenever an extension does pass, it is expected to be retroactive back to Mar. 1, 2010."

In most every contract that physicians have, CIGNA, Untited, Aetna, etc. pay us based on Medicare rates, so essentially, I will be taking a 21% cut in pay for all of my paying patients, not just Medicare.

No. Payer contracts are locked in for a period of time (years), so they can't adjust their fees until the contract comes up for renewal.

so i am going to take home only 58% of my previous paycheck assuming all medicare

Not really a fair assumption for most people. Anybody who has a patient panel consisting of 100% Medicare has dug their own grave, IMO. You should never put all of your eggs in one basket, especially one of the worst-reimbursing baskets of them all.

 

[exPCM]

The sky hasn't fallen quite yet.

"The Centers for Medicare & Medicaid Services (CMS) is working with Congress, health care providers, and the beneficiary community to avoid disruption in the delivery of health care services and payment of claims for physicians, non-physician practitioners, and other providers of services paid under the Medicare physician fee schedule. It has instructed its contractors to hold claims containing services paid under the Medicare Physician Fee Schedule (MPFS) for the first 10 business days of March. The holding of MPFS claims will only affect claims with dates of service beginning Mar. 1, 2010. This hold should have a minimum impact on provider cash flow because, under current law, clean electronic claims are not paid any sooner than 14 calendar days (29 for paper claims) after the date of receipt. Whenever an extension does pass, it is expected to be retroactive back to Mar. 1, 2010."
We had to kill the patient in order to save him.

The AVERAGE PERSON could not come up with the logic that CMS uses. The average GENIUS couldn't approach it. No. For something this colossally stupid you need at the very least an average *****.

Yes, only the average ***** would think that 0% reimbursement is better than 79% reimbursement on time with the remainder to follow. And only the average ***** would believe the CMS story.

This is their argument:

1. The 21% cuts become law March 1.

2. We are supposed to start paying you at that rate immediately.

3. However, if the cuts are retroactively reversed then we'd have to pay out another 21%, which we find an incredible administrative burden.

4. Therefore, to make it easier on ourselves (and also to benefit from 2 weeks of "float" on your money) we are going to pay you -- not 100% -- not 79% -- but ZERO percent for 2 weeks. This will be a good thing for everybody, including the doctors!

5. We hope you will be gullible enough to think that the reason you don't quite see the benefit to you in all this is because you aren't smart enough about economics or able to do sums without taking off your shoes and socks. There is no real upside for you, but we're counting on you to be uninformed and clueless like all the other times.

5. We are doing this for your own good.

Here's the true logic:

1. If it turns out that the cuts aren't reversed then all we need to do is send out late payments of 79%.

2. If the cuts ARE reversed then all we need to do is send out late payments of 100%.

3. The important thing is that we don't have to pay out anything NOW.

4. It has occurred to us that we can invoke this rule forever until someone stops us (like who, Congress?), so guess what? In 2 weeks we're going to move it back 2 MORE weeks! And what do you think happens after that?

5. There's no time limit on this!
In December 2009, CMS also instructed carriers not to process physician claims for the first 10 business days of January 2010 when it wasn't clear whether Congress would call off the pay cut originally scheduled for March 1. Even though Congress came through, carriers still abided by the CMS instructions.

Late payments in January created a financial hardship for physicians heavily dependent on Medicare for their livelihood, internist Joseph Stubbs, MD, president of the American College of Physicians, told Medscape Medical News.

"Some physicians had to take out short-term loans to pay their staff," said Dr. Stubbs, predicting that practices will experience interrupted cash flow again based on the CMS decision to suspend claims processing in the first half of March.


No. Payer contracts are locked in for a period of time (years), so they can't adjust their fees until the contract comes up for renewal.

In my area it is not years. Eg: Tricare insurance payment cuts begin nationwide Monday.
Here is some easy math based on a typical primary care physician practice. Overhead is probably underestimated but makes the math easy. Also remember most overhead costs are "fixed", meaning they do not change: cost of office space, staff, malpractice insurance, taxes, supplies, utilities, etc.

Scenario #1.
Practice annual gross revenue: $300,000.
Typical fixed 50% overhead: $150,000.
Physician salary: $150,000.

Scenario #2 (21% Medicare cuts, with the assumption private payors will follow).
Practice annual gross revenue: $237,000.
Typical fixed 50% overhead: still $150,000.
Physician salary: $87,000 (representing a 42% drop in income).


Not really a fair assumption for most people. Anybody who has a patient panel consisting of 100% Medicare has dug their own grave, IMO. You should never put all of your eggs in one basket, especially one of the worst-reimbursing baskets of them all.
I am quoting a doc on Sermo - maybe they are a geriatrician.

-

 

[deleted87716]

In my area it is not years. Eg: Tricare insurance payment cuts begin nationwide Monday.

Tricare is a government payer. I was referring to commercial payer contracts, like the others you mentioned.

If Congress does not act quickly to prevent the cuts from affecting cashflow (they have two weeks), then we will likely start to see widespread action by physicians to minimize the impact of these cuts on their practices. Some practices will have more flexibility than others.

The ultimate losers in this scenario will be the patients.

 

[MOHS_01]

...


No. Payer contracts are locked in for a period of time (years), so they can't adjust their fees until the contract comes up for renewal.



Not really a fair assumption for most people. Anybody who has a patient panel consisting of 100% Medicare has dug their own grave, IMO. You should never put all of your eggs in one basket, especially one of the worst-reimbursing baskets of them all.

True, many contracts are independently negotiated fee schedules with a specified length of time; others are more directly indexed to MC (some will have x year MC fee schedule while others are ___ % MC).

I would like to point out that not all specialties enjoy the luxury of being able to dictate their payer mix easily due to the natural demographics of the disease treated. If I want to cut back on the cancer side (which I will most certainly do if these cuts are allowed to stand) I have some flexibility; if I continue to predominantly provide those services that which I trained to do (and have no one in a 100 mile radius to pick up the slack, worsening patient access to trained and timely care) I have little control over payer mix.

The general trend demonstrated by his math holds for my specialty as well (the numbers are higher on both sides of the ledger, but I am expecting a 40% or more hit if this cut sticks).

 

[Sneezing]

Government intrusion into medicine is much like an addiction. The first steps to sober up our nation from this fiscal monster are going to be the hardest. We will all be better off in the end once the reliance on the government fat has ended.

And I quote MOHS_01 signature to add to my point.

"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them."
Thomas Jefferson
3rd president of US (April 13, 1743 – July 4, 1826)

 

[badasshairday]

So the cuts went into effect today. I say everyone drop Medicare and send a message to those idiot suits in DC.

 

[medicinesux]

Does this mean we all get a (21% x 2) 42% reduction on our student loan balances too?!?! It just keeps getting worse and worse. Will be so glad to escape from this hell someday soon.

 

[deleted87716]

Will be so glad to escape from this hell someday soon.

What's stopping you?

 

[gutonc]

What's stopping you?

Then what would s/he have to complain about?

While I appreciate the importance and relevance of the issues that medicinesux and exPCM bring up, the constant whining, without much in the way of constructive suggestions, can get a little grating.

 

[deleted87716]

Then what would s/he have to complain about

Oh, I dunno...potholes? The weather? Global warming?

 

[Laryngophed]

Oh, I dunno...potholes? The weather? Global warming?

The tunable diaphragm on the steth (s)he doesn't use anymore.



The sky isn't falling. This sucks very much, but when Medicare patients can't find care, they'll complain and things will work its way up the ladder that allowing the cuts was a terrible move. For now, the burden falls on the docs, I think we'll see it shift back to CMS soon enough.

 

[Dr Oops]

The tunable diaphragm on the steth (s)he doesn't use anymore.



The sky isn't falling. This sucks very much, but when Medicare patients can't find care, they'll complain and things will work its way up the ladder that allowing the cuts was a terrible move. For now, the burden falls on the docs, I think we'll see it shift back to CMS soon enough.

medicare patients already have trouble finding doctors, didnt stop payments from being cut.