How To Respond To More Cuts In Medicare Reimbursements

After all the frustrations and complaints doctors voiced with Medicare last year after they cut reimbursements, for them to report their plan for additional cuts next year just shows how little they truly value the ones who provide all the care to the Medicare patients.

How can they do this again?

Well, the fact is they do it because doctors are scared to opt out of Medicare and lose access to such a large portion of the population.  And not just losing that access, but being locked out for two years.

They have you cornered, and they know it.

They also know your hands are nearly tied.

But are your hands really tied?

Is there nothing you can do?

Here are a few recommendations:


1.  Do some financial calculations on your practice.  

How much does it cost you to see a Medicare patient? 

Calculate the percentage of your total expenses required to see one Medicare patient. 

Then calculate the revenue generated by seeing one Medicare patient. 

That requires some assumptions in your calculations. Some of those patients will be seen more than once. That is not just additional revenue, but also additional expense. For surgeons, some of them will go on to have surgery.  So, all of those issues have to be considered in your revenue and expense calculations.

Ultimately, what you must determine is whether you can afford to keep seeing Medicare patients in your practice. 

A well known spine surgery group did those calculations a couple of years ago and found they had lost over $600,000 dollars by seeing Medicare patients. 

So, they opted out.  But they did so based on data and not just because they were angry at being stabbed in the back by our government.  

What are your practice's numbers?  It may surprise you!

This decision of whether to opt out of Medicare or not is made much easier if you discover that you lose money on every Medicare patient you see.

How much more can they cut your reimbursement before you say, "That's Enough?!!"

But you need your own data. 

And your personal practice data may be different from your partners, so don't just calculate it for the group.

Know your own numbers also.  


2.  Do the same calculations for your insurance patients. 

Break it down by each insurance carrier in your area.


3.  Compare the revenue generated for one average patient from each insurance carrier as well as from Medicare. 

Is there a substantial difference? 


4.  Rank the payers in order from most revenue generated to least revenue generated. 


5.  Then rank the payers in order based on how many patients of each payer you see in a given year.  Rank them from top to bottom from the most number of patients seen to least number of patients seen. 


6.  Now, compare the lists.

Are you seeing more patients with low revenue generation or high revenue generation?


7.  If you see more low revenue generating patients, you need to change the make up of your practice. 

Are the low revenue generating patients taking up clinic slots that could be used for higher revenue generating patients?

If so, you need to limit how many clinic slots you make available to the low revenue generating patients. 

Maybe you allow only four slots per day for them.  Or eight slots.  It all depends on your practice's patient mix. 

And it depends on your level of fear of doing this.  You know those patients may choose to go elsewhere if you can't see them in a timely fashion, and that scares you.  That is understandable.  You could lose them forever.

And the question is, will there be enough higher revenue generating patients to take those other available slots?

You will have to experiment with this strategy.  

But, you can start slow. 

Let's say you normally see 40 patients in a given clinic.  And let's say Medicare is your low revenue generating payer. 

Then only let Medicare patients be seen in 38 of the 40 slots for two weeks. 

If, after two weeks, there has been no difficulty filling the other 2 slots, pare it down more.  Perhaps down to only 35 of 40 for another two weeks. 

Again, after the additional two weeks, if you still had no trouble filling the other slots, pare it down more. 

And over and over.

This method allows you to see more of the higher revenue generating patients. 

Some say, isn't that just a means of rationing care? 

Well, you are not refusing to see Medicare patients. 

This is all an effort to keep your practice financially sound. 

You didn't choose this strategy. 

You were forced into this strategy because the government discounted your value.

Again, you are not refusing to see Medicare patients. 

You are not opting out of Medicare. 

Based on your calculated data, you are adopting a strategy that allows you to still see Medicare patients but not lose money from doing so. 

The same would be true if the low revenue generating patients were Blue Cross/Blue Shield patients. 

And no doctor would feel bad for limiting the number of BC/BS slots available in clinic.

So, why do some doctors feel like they shouldn't limit Medicare patient slots? 

It is just a good business decision. 

And you had no choice because of government decisions. 

Eventually, if more doctors follow this sound business strategy, the government will have to raise reimbursements to improve access. 

And with insurance contract rates usually tied to Medicare rates, that will be good all the way around. 

The rising tide will lift all boats. 

You really do have other options before totally opting out of Medicare. 

​Make a data-driven decision!