Physicians Practice Questions & Answers : Analyzing Medicare

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Questions & Answers

Analyzing Medicare (posted 9/1/05)

Q: If Medicare accounts for less than 15 percent of my practice, what should I consider when deciding whether to keep treating Medicare patients?

A: If you are considering dropping Medicare, consider these issues:

Is there additional business in your region to replace the patients you will lose if you drop Medicare? That is, if the Medicare patients disappeared tomorrow, would there be patients to replace them? Ask your appointment secretary — are you turning patients away due to lack of access? If you can fulfill all your appointment requests, there may not be enough patients to replace the loss of the Medicare patient population.

Closely evaluate the reimbursement rates for Medicare versus other carriers. There's been a lot of press about how terrible Medicare is, but there are a lot of physicians in this country who think it's a great payer. It just depends on where you are and who your other payers are. Don't drop it just because of the media blitz surrounding it.

Consider your overhead cost for managing these patients. Is your triage nurse inundated with calls from Medicare patients? What about the billing office? How much work do these patients represent? If it's more than 15 percent, they are consuming more overhead than other patients. The cost of caring for these patients should at least be a factor in your decision.

This patient population offers you something a little different professionally than younger patients. Are you dissatisfied with treating this population of patients? If so, a bit of income loss may be worth it. If it is rewarding, consider keeping Medicare.

Finally, what are the implications for your community? Will these patients have access to care from another provider? If not, consider the community's needs as part of the equation, in addition to yours.

Additional Resources

View more questions and answers from the September 2005 issue

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