Monday, November 12, 2007

Economic Implications of Medicare's Rule Change for EP's

I just got back from a meeting with our business manager and I'm depressed.

We did some homework regarding the implications of the new Medicare payment rules for our procedure codes no longer being exempt from the "51 modifier" as I mentioned before.

Well, it's huge.

We applied this rule change to last year's billings to determine the impact. Assuming we used the same codes and applied to new rule to Medicare patient's, the drop in the physician portion of Medicare reimbursement will be 18.76% for our procedural compensation. Nearly 20%. Ouch.

Now I have no idea how the technical portion of Medicare payments will be affected. Usually technical payments exceed physician payments 10 to 1. No doubt their cut will be considerable too. But suffice it to say, doctors have a lot less "wiggle room" to their income these days than do hospitals. Yet physician revenue remains an easy target. Our political lobbying is dwarfed by other, better connected, entities. And Medicare is a fixed pot of funds which must be distributed to the masses. Certainly, CMS has found a creative way to implement income redistribution.

But if I were a patient, I'd like to see my doctor, the one doing the procedure, get compensated appropriately for their skill and expertise - the last thing I'd want is a doctor pissed that his time and skill weren't worth the effort to perform my procedure anymore. I'd like to know how much this pay cut will effect the hospitals and insurance companies who continue to demonstrate record-setting revenues.


10:46 CST - Addendum: Oh, I forgot: this revenue cut does not include CMS's already-threatened 10.1% physician revenue cuts. Could this mean nearly 30% cut in EP's revenue? If so, the implications for our senior citizens could be profound.


q-school said...

2 biggest areas are:
dft testing and ablation performed in the same setting as eps, correct?

yikes that's a lot of money.
even without the cms cut

Lisa said...

I'm sorry that your income will be cut this year. It stinks. If you are performing two procedures, you should be paid for two. This year my insurance company informed me that my inherited LQTS is a Heart Disease and is considered a "Lifestyle Disease". I should consider losing weight and embarking on a cardio exercise routine. So I'll be paying almost a thousand dollars more in premiums this year. If I go to them and point out that no amount of weight loss or exercise is going to correct a congenital channelopathy the person on the end of the line (probably a Pakistani) will just repeat to me that it is a heart disease and they are lifestyle diseases. I doubt calling them up and asking them to pay my doctor fairly will do any good either.

The Happy Hospitalist said...

Dr Wes, I think the shock and awe you are experiencing with your rapid drop in potential income is the same shock and awe that primary care has been experiencing for the last 15 years under the current RVU system.

You have now walked a day in primary cares shoes.

While I can't say reimbursment levels are any where near equitable for cognitive E&M vs procedural based codes (just look at your non procedural reimbursment rates compared to your procedural reimbursment and the time it takes for both), I can say that at that current rate, CMS will bankrupt your field much like it has primary care. The nature of your field allows for a much wider cushion before that happens, but if the system as a whole does not change, one will be looking back to wonder where not only where did primary care go, but where did all doctors go.

The answer will be retired, industry and non medical business. The current system will not sustain itself in all aspects.

Baby boomers had better be prepared to pay up to recieve access

A Fickle Sonance said...

Wow. As one on the verge of shouldering the necessary debt linked with becoming an MD, this is a bit disconcerting and it makes me wonder what reimbursement will look like in 5 years or so.

Anonymous said...

"it makes me wonder what reimbursement will look like in 5 years or so."

Doubt there will be any kind of reimbursement then - we'll be expected to work for free!

The Happy Hospitalist said...

I forgot to add, that Medicare, through their flawed SGR mathematics is scheduled to drop physcian reimbursment across the board by 35-40% over the next 5 years. That 10% is just the beginning.

Imagine starting a job today at $50,000/year and then have your boss tell you, in five years your salary will be $30,000. Take it or leave it.

What you will see is the mother of all exits from Medicare, at a time when Boomers are entering the system.

I hope they have lots of cash because Medicare will be insurance on paper only.

Anonymous said...

"the last thing I'd want is a doctor pissed that his time and skill weren't worth the effort to perform my procedure anymore"

Is this the reason you became a doctor? Millions of others are also feeling the squeeze in this economy. If everyone had that attitude about work we would really be in sad shape.