After years of declining reimbursement, it should come as no shock that the results of our 2011 Fee Schedule Survey are less than appealing. But you may be surprised by what we tell you to do about it — and what we tell you not to do about it.
Here's a hint: We're not going to tell you to focus as much on the typical reimbursement negotiations with payers — those conversations probably won't get you as far as they once did.
But it's not all bad news. The reimbursement model is changing, and as a result, the opportunity to have a new type of conversation with payers is emerging.
"Nowadays, it's not so much about a negotiation on fees, it's a negotiation about how providers and insurers can partner-up to deliver greater value to patients," says Susanne Madden, president of medical practice consulting company The Verden Group.
But before we get to that, let's rip off the Band-Aid. Here's an overview of what you're experiencing right now when it comes to reimbursements.
* Check out our slide show to view commercial payer reimbursement data for nearly 900 primary-care physicians and specialists.
Physicians hit hard
This year, average commercial payer reimbursements for new and established office visits dropped 2.86 percent. That's something Madden says matches up with what her clients are experiencing and what she expects they will continue experiencing in the future.
It's "absolutely a trend" she says. "We are seeing fee schedule cuts just really rolling through quarter after quarter, quite frankly. It's not even a matter of a fee schedule change once a year or every couple of years now."
Here's some more of the findings from our survey:
The most frequently billed code for family medicine, pediatrics, and internal medicine — longer, established-patient visit 99214 — dropped about 1 percent to $91.67; longer, new-patient visit 99204 fell a whopping 5.87 percent to $123.66; and shorter established-patient visit 99211 had the largest increase of all new and established patient visits — a boost of only 3 percent.
We first noted in 2009 that Medicare, once the reimbursement floor that commercial payers built on, was starting to become the ceiling. It seems that shift is now complete. In 2011, Medicare paid more than commercial payers for all office visits except for shorter visits 99201, 99211, and 99212. Overall, Medicare reimbursements increased an average 2.3 percent, that's on top of a 7.4 percent increase experienced last year.
Attorney Richard Wagner, managing director of Chicago-based Wagner Healthcare Consulting, LLC, says the government has been under "a lot of pressure" to maintain Medicare's reimbursement rates. But he cautions, "I think we could almost bank on the fact that CMS is not going to be increasing those payments at a steady rate anymore."
Troy Morris, a family physician based in Southaven, Miss., is among the group of physicians hit hardest with lower reimbursements: those working in small and solo practices.
"As far as private payers, we've seen no increases in reimbursements," Morris, who operates a two-physician practice, says. "The private payers won't even come to the table anymore and negotiate with us."