Physician payments - Physician Fees: Government Giveth, Government Taketh Away, Another Untold Story

Physicians are different from other professionals by virtue of the ground rules of contemporary medicine…Physicians rarely set their own fees are dictated to them by Medicare, Medicaid, HMOs, PPOs, and other third party payers. The money reimbursed to them for services rendered may have little or no relation to to their cost of doing business. What can be more aggravating is that sometimes third party payers also dictate what physicians can and can’t do for their patients, by declining to pay for services that physicians may believe patients need.

Merritt, Hawkins & Associates, Guide to Physician Recruiting, 2007

By and large, the public is completely unaware that Medicare sets the fees for which it will pay doctors, and the health plans follow suite. Doctors are at the mercy of payers.
I thought of this
the other day when I received an itemized statement of what Medicare and Blue Cross Blue Shield paid for work done on me after my visit to a cardiologist. For 5 services, Medicare was billed $1012.02, Medicare paid $211.97, and Blue Cross/Blue Shield plan paid $53.00. The cardiologists billed $1012.92, and Medicare/Blue Cross Blue Shield combined paid $264.97, a reduction of $747.05 – a discount of 738%.

These figures are arrived at based on codes in an arcane process developed by Medicare and something called RUC (Reimbursement Update Committee) . The process is arbitrary, secretive, and byzantine and usually has nothing to do with the cost of doing business.

Now we have new news. Starting in January, 2009, Medicare will up pay to family physicians, internists, and geriatric specialists by 6-8% and cut overall fees to cardiologists by 11% with reductions of 42% for echocardiograms and 24% less for cardiac caths, ,overall fees to radiologists by 20% CT and MRI scans by radiologists .

The good news here is that the Obama administration is making moves to increase pay for primary care and in addition, has $500 million more in funds in the stimulus package to train more primary care doctors. If you’re a specialist, the bad news is the Centers for Medicare and Medicaid Services has decided trim pay for cardiologists and radiologists to keep the overall physician reimbursement pie neutral.

There is probably no rhyme or reason for the magnitude of the cuts, other than the fact that the number of cardiac and imaging procedures are increasing faster than the government would like. The next shoe to drop will likely be for Medicare refusing to pay for procedures that it deems “inappropriate,” or not as “effective” compared to some other procedure or conservative clinical approach.