Physicians Should Embrace, Not Abandon, Medicare Patients

Once again, physicians would have faced a 26.5 percent reduction in the Medicare physician payment rate on January 1, 2013, as a result of the sustainable growth rate (SGR) formula. Since 2002, Congress has intervened 14 times with a stopgap measure to prevent major cuts in physician Medicare reimbursement. The SGR formula was created as part of the Balanced Budget Act of 1997 and has never been corrected permanently by Congress.

According to a 2010 AMA survey of more than 9,000 doctors who care for Medicare patients, one in five physicians are restricting the number of Medicare patients in their practice and one in three primary-care doctors are restricting Medicare patients. The AMA added, “the Medicare program has become unreliable and its instability undermines efforts by physicians to implement new healthcare delivery models that stand to improve value for seniors and other beneficiaries through better care coordination, chronic disease management, and keeping patients healthy.”

But in reality the opposite is true. The Affordable Care Act is the stimulus for a significant increase in primary-care revenue for those physicians with the foresight to make a paradigm shift. The shift from problem-oriented medicine to prevention and wellness improves the quality of care, decreases healthcare costs, and increases physician revenue.

In the coming year, primary-care physicians and extenders will see increased Medicare payments. Family practice physicians will see the largest Medicare payment increases at 7 percent, and internal medicine physicians, pediatricians, and nurse practitioners will see increases ranging from 3 percent to 5 percent.

The paradigm shift creates many additional opportunities for primary-care physicians to increase revenue and improve patient care above and beyond the SGR fix. An article from American Medical News discussing the issue of the "doc fix" has an interesting table with current payments and proposed payments. The article shows a family physician seeing 25 Medicare patients a day, five days a week for 50 weeks out of the year. At the current rate of $68.97 per visit, this would generate $431,062 in revenue. At 60 percent overhead or $258,637, this family physician's income would be $172,425 per year. If one uses the same numbers and the physician shifts his practice to wellness and prevention, hires two nurse practitioners, and continues to see problem visits, the practice adds $1,675,000 in additional revenue. How can that be? Is that possible? The Medicare Annual Wellness Visit (AWV) reimburses $170 for the visit and an average of $130 (conservative estimate) for preventive services. Two nurse practitioners seeing 25 Medicare patients a day, five days a week for 50 weeks out of the year minus their combined salaries of $200,000 a year would generate $1,675,000.

The Medicare AWV has many complex components but new technologies, EHR templates, and cloud-based automated AWV solutions no longer create barriers to deliver wellness visits. Primary-care physicians should embrace Medicare and the AWV. The paradigm shift to wellness and prevention will increase revenue and improve patient care.