Is it Time for your Medical Practice to Opt out of Medicare?

Welcome to the furture of medical practices

“I opposed the budget deal in 1997 because it brought in a $115 billion cut in Medicare that created greater pressure for providers not to participate.”

~ David Obey, U.S. Congressman

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Sometimes I feel like I’m watching a ping pong match.

Back and forth.  Back and forth.

The Centers for Medicare and Medicaid Services (CMS) had announced a 23 percent cut to Medicare physician fee schedules.   Some months ago Congress Physician contemplating Medicare cutsdelayed any action on these cuts until December of this year.  In the meantime, CMS announced plans to cut an additional 1.9 percent following December 1, 2010.  Subsequent to that the Senate delayed all Medicare payment reductions by one more month.

That’s nearly a 25 percent decrease if it’s all enacted.  But will it be enacted?

Back and forth.  Back and forth.

A recent ‘Bloomberg‘ headline read:  “A presidential commission’s leaders proposed a $3.8 trillion deficit-cutting plan that would cut Social Security and Medicare, reduce income-tax rates and eliminate tax breaks including the mortgage-interest deduction.”

In the context of a federal and state cost cutting frenzy, will the Medicare cuts finally become reality?  Or will there be yet another postponement?  Whatever happened to the plan to permanently cancel the ever looming Medicare cut, as the legislature used to promise?

Back and forth.  Back and forth.

So how is a practicing physician supposed plan when even the government doesn’t seem to know what it’s actually going to do, much less when they’re going to do it?  Is it finally time to get out and let others be Medicare providers? Or is this just one more “new” reality that a medical group will need to deal with?

Will the Medicare pay cuts actually go into effect?  Who knows?  However, regardless of what happens, most medical practices have an abundance of things they can do improve the efficiency, effectiveness, and ultimate financial outcome of their business.  So why not entertain the following list right now?

20 Ways to Improve Your Medical Practice Finances … Regardless of What the Feds Do

  1. Avoid denied medical claims due to ineligibility at the time of services by verifying patient eligibility and benefits by phone or via the web prior to the appointment.
  2. Watch out for any changes in insurance coverage, making sure that the most current insurance carrier will be billed.  Make a copy of the patient’s insurance ID card.
  3. Explain the advanced beneficiary notice (ABN) with the patients if there is a possibility that the services to be rendered will not be covered by Medicare or the insurance carrier.
  4. Ensure that the ICD-9CM, CPT, HCPCS codes and appropriate modifiers are billed.
  5. Perform a pre-billing review to eliminate potential medical billing errors.
  6. Bill regularly.  If the office bills weekly, then the flow of payments should be received on weekly basis.
  7. Revisit your physician fee schedule annually to ensure they are above the Medicare allowable amount.
  8. Collect patient copayments at the time of the visit.  You may be spending $10 or $15 in staff time to track and collect that $5 or $10 or $15 copayment after the visit.
  9. Maintain an up-to-date insurance contract book, so payments from insurance companies can be verified against the contract rate or the contract fee schedule.
  10. Require regular accounts receivable reports that include aging and days in A/R.  Monitor for growth in advanced aging buckets or increasing days in A/R.
  11. Require claims follow up with primary carriers beginning between 30  to 60 days from the billing date.
  12. Follow-up timely on unpaid or underpaid claims.  If your original claim is not received, you can get denials for untimely filing.
  13. Document follow-up on past due claims each month so that if subsequent rounds of collection activity are required they can be more effective.
  14. Utilize your medical practice website in ways that will increase efficiency and decrease the consumption of your staff’s time.  Consider making provisions for prescription refills, appointment scheduling and bill paying to be handled online.
  15. Develop an annual operating budget that combines historical trends, current realities and planned changes.  Compare actual results to your plan and let it help guide your monthly financial decisions.  Seek help from a qualified consultant if you lack in-house expertise in structuring such a budget plan.
  16. Revisit your phone plan.  You’d be surprised at how often there are unnecessary charges due to a practice’s basic plan, number of lines, or optional services.
  17. Use a simple inventory system to keep track of both office and medical supplies so as to avoid overspending and waste.
  18. Revisit advertising and collateral material expenditures.  Traditional print media as a means of promoting name recognition, brand, and business promotion is rapidly being replaced by a practice’s web presence.  Options in the online sphere are potentially much less costly and have a growing rate of return.
  19. Revisit staffing levels and position descriptions.  Seek knowledgeable guidance on position design and appropriate physician practice benchmarks to use.
  20. Ask your staff what they think can be done.  Most employees want to do well by their employers, and they know many of the details of your practice that will escape your own eyes.  Soliciting their participation in identifying options for cost containment and improved cash flow will also promote their “buy-in” to the solutions adopted.  Your staff has a vested interest in your medical practice having a financially stable operation.  Ask them to help create that environment.

This list is just a beginning.  And every practice has its own, unique opportunities for increasing efficiencies and financial outcome in its daily operation.  So why wait for a payor like Medicare to force you to react?  Why not empower yourself, and take control now?

When you need proven expertise and performance

Thomas M. Lee, Managing Partner

Mr. Thomas M. Lee has over 35 years of experience in the business of healthcare with special emphasis in operations management, financial analysis, financial forecasting, construction projects, and new program development.

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