When we reported the results of the 2006 Fee Schedule Survey this time last year, we couldn’t think of an eloquent way to sugarcoat the dismal state of physician reimbursement in the United States. The numbers were simply bad: A 10 percent dip in E&M visit allowables from the year before, dropping below Medicare. Massive insurance industry consolidation. Frustrated, overworked physicians who felt powerless to negotiate a fair fee schedule.
Sorry, but the news is no better today. In fact, it’s disturbingly similar: Another sizeable drop in E&M visit reimbursement. Even more payer consolidation. And payer accessibility? “It’s like God,” says Arvind Cavale, a solo endocrinologist in the Philadelphia area. “You can’t ask them. Either you get ‘This is what we have’ or they just don’t answer.”
Are physicians so completely hogtied? Maybe. Insurance companies are notorious for ignoring meeting or information requests. They change their policies with little notice, posting bulletins of critical information on their Web sites, a dozen clicks deep. They bundle and unbundle codes with the speed of a curbside shell game.
How exhausting — and how time-consuming — is trying to hit this moving target? Well, Cavale, for one, has not tried to renegotiate his 20 or so payer contracts since 1999. “How much time do I have to go through a 28-page contract?”
Yet there are ways to improve your leverage with payers, and even see some success. Check out these survival tools we’ve collected for you. Learn them. Use them. Most importantly, share them. You may find yourself not only pushing through the once-impenetrable underbrush of fee schedule negotiation, but even blazing trails to better financial leverage for other physicians to follow.
The ungilded lily
First, the numbers: Average reimbursement for E&M allowables dropped to $73.48 — a 6.5 percent drop since 2006. Shocking? “Not really,” says Susanne Madden, founder of the Verden Group, a managed-care consulting company. “But it’s discouraging to see how much rates have moved down again.”
The biggest single-year step down was in the Mountain region, where the average E&M visit allowable fell 12.5 percent to $83. But worse than this is the Pacific region, which slipped more than 20 percent in 2006 and lost another 9 percent last year.
Two data slices are particularly disheartening: City docs will be unhappy to see that reimbursements in urban areas, which have historically outranked suburban and rural areas, fell to the lowest of all three area types for the first time. And no matter where you practice, the reimbursement gap hits primary care the hardest, when compared to medical and surgical specialists.
One bright spot: New England, whose average reimbursement had tumbled 27 percent in just 12 months during 2006, reclaimed nearly 11 percent of that deficit, and now stands at the above-average $84.
What you’re up against
It’s hardly surprising that physicians are feeling like 98-pound weaklings up against a sand-kicking bully at the beach these days. Health insurance is now all about survival-of-the-biggest, meaning in many cases a handful of companies hoarding the bulk of the market.
Why should payers worry about so-called “fair” negotiation? Is there even such a thing? Just four insurance companies — UnitedHealth Group, WellPoint, Aetna, and Healthcare Service Corporation — occupy more than a third of the market (36.5%). Greg Mertz, president The Horizon Group, a healthcare consulting firm, says that the insurance behemoths don’t sit down at the table with anybody because they don’t need to. “They just can’t find the time to meet with you,” he says. “You ask for a meeting weeks in advance: Nope, not available.”
As physicians, of course, you know you cannot commiserate on your fees; but insurance companies can in fact collude with each other. “I never talked to a rep that didn’t know what his competitors were paying,” says Mertz.
