Our Third Annual Fee Survey

For the third consecutive year, Physicians Practice has surveyed our physician readers, users of our Web site, and subscribers to our weekly e-mail newsletter, "Physicians Practice Pearls," about their fee schedules (what they charge for certain services) and their allowables (what commercial payers actually reimburse them for those services). This is your chance to see how your fees and reimbursement compare to your colleagues'.

A summary of some of our key findings follows. To see all of the data -- more than we could include here -- email info@physicianspractice.com  to have a copy of the full report e-mailed or mailed to you. Or for immediate gratification visit the Tools area of this site to download a copy.

Certainly, the reimbursement picture isn't pretty. In a recent focus group discussion with some of our readers, one physician told us, "More than anything else, I find fee surveys depressing." And that may have to do with the lack of control you have over the fee-setting process.

However, there are at least some small signs of improvement in the physician payment landscape. Over our three years of surveys, commercial reimbursement for office visits -- 99211 to 99245 --  has increased about 4.4 percent. That is hardly fantastic news. In fact, it doesn't even begin to cover cost increases. According to the Medical Group Management Association's (MGMA) Cost Survey: 2003 Report Based on 2002 Data, the cost of doing business for all multispecialty medical group practices increased by 7.47 percent from 2001 to 2002 alone. Similar to our data, their report shows that total medical revenue only increased by 5.67 percent in 2002. Still, that small increase helps more than seeing rates fall.

Interestingly, our results also show that physicians are actually charging slightly less for their services. In 2003, the average charge for all office visits was $147. This year it is $138. It's hard to say if that is a statistical anomaly or if - as our e-mails and conversations with physicians over the past year suggest - physicians have adjusted their fee schedules to help out the growing numbers of their patients who are not covered by insurance, were laid off in the past year, or are otherwise suffering from the economy of 2003.

Specialists win

A small increase in commercial payments may not reflect your particular experience; it is an aggregate of data from practices of all sorts all across the country. Primary-care practices, especially, may have seen little or no rise over time. Specialty practices are still able to command higher reimbursement, even for office visits. One might expect payers to reimburse specialists richly for specialty services, but their negotiating clout also helps them get better fees for services that primary-care physicians also provide, such as office visits.

In fact, the average reimbursement to surgical specialty practices for an office visit is $105 according to this year's results. Primary-care practices bring in only $94 for the same services.

For a 99213, a standard office visit, internal medicine practices reported the lowest reimbursement -- $44. Orthopedic practices are getting $50.47 for a 99213; general surgeons reported reimbursement at $50.22.

Specialists' own fee schedules or charges also are higher. Orthopedic practices said they charge an average of $83.93 for a 99213. Family practices charge only $69.50. One might expect specialists to ask more for the specialized services they provide, but since one office visit is essentially the same level of treatment no matter who performs it, that result reflects the status of specialists more than the actual work performed. It's equally true that, given their lower status, expectations, and patient mix, primary-care physicians may undervalue their services.

Location matters

Practices on the West coast continue to be relatively well paid, according to our results this year. Their average office visit payment, across all specialties, is $102.62. The Pacific region has led the pack in all three years of our surveys. Ordinarily these states --  specifically California -- are considered among the lowest paid. Our unusual findings may reflect the fact that we include higher-paying states, such as Hawaii, in the mix. Of course, higher reimbursements still don't cover the higher costs of covering care in areas like San Francisco or Honolulu.

The North Central region is getting the second-best average office visit reimbursement at $99.75. Compare that to the Mountain region at $70.93 or the Mid-Atlantic at $88.59.

We saw similar findings even for procedural services by region. For example, reimbursement for CPT Code 17000, destroy benign/pre-malignant lesion, earns practices an average of $73.04 in the Pacific region but only $55.73 in the Mid-Atlantic. There are more nonoffice visit codes in our full report.

This year, the Mountain region had the lowest overall reimbursement for office visits, but this dubious distinction should be short-lived, as it has not been consistent in our three years of surveying. The Mid-Atlantic region was the lowest paid according to last year's results. In 2002, the North Central states seemed the hardest hit.

Urban practices typically are better paid than rural or suburban practices, reflecting their generally higher costs.

What it all means

Keep in mind that your reimbursement may be quite different and still be reasonable. Reimbursement does vary by practice, and our data represents a limited sample. Nonetheless, it's invaluable to have a rough sense of what you can expect from payers --  and from yourself.

Pamela Moore, senior editor, Physicians Practice, can be reached at pmoore@physicianspractice.com.

This article originally appeared in the January 2004  issue of Physicians Practice.