Reimbursement Model Trends by Medical Practice Size

How does your practice’s reimbursement model compare to practices of similar sizes? To help you find out, we analyzed our 2013 Staff Salary Survey findings based on the responses we received from nearly 1,200 readers.

Traditional fee-for-service (FFS): It’s clear that fee-for-service reimbursement (not surprisingly) still dominates the reimbursement structure in most practices, regardless of size. Still, a higher percentage of small and solo practices said they are in this traditional reimbursement environment than larger practices, according to our survey. Here’s a closer look at the findings:

• Solo practices: 87 percent are in FFS.
• Two- to five-physician practices: 84 percent are in FFS.
• Six- to 10-physician practices: 75 percent are in FFS.
• 11- to 20-physician practices:  68 percent are in FFS.
• 20-plus physician practices: 70 percent are in FFS.

Concierge/membership: Overall, a small percentage of survey respondents said they are in a concierge/membership practice, in which patients pay a monthly or annual fee for services. Some concierge/membership practices accept insurance, which means many of the respondents who identified themselves as a concierge/membership practice may have also identified themselves as fee-for-service. Survey respondents in practices of six- to 10-physicians reported practicing in a concierge/membership practice most often. Here are some more specific findings:

• Solo practices: 2 percent are in concierge/membership practices.
• Two- to five-physician practices: 2 percent are in concierge/membership practices.
• Six- to 10-physician practices: 5 percent are in concierge/membership practices.
• 11- to 20-physician practices: No respondents are concierge/membership practices.
• 20-plus physician practices:  1 percent of respondents are concierge/membership practices.

It’s likely that more physicians, especially physicians in smaller practices, will begin transitioning to concierge, membership, and even direct pay practices in the coming years. Physicians who favor independent practice will likely view these alternative reimbursement models as a way to retain their independence, spend more time with patients, and combat declining reimbursement.

Accountable care organizations (ACOs): While the percentage of practices participating in traditional fee-for-service is higher among smaller practices, the percentage of practices participating in ACOs is higher among larger practices, according to our survey. Most ACO participants also participate in traditional fee-for-service reimbursement, but they also share in the savings with their payer partners if they successfully improve care quality while reducing care costs (some also share in the losses if they are not successful). Here are more specific findings from our survey:

• Solo practices: 12 percent are members of ACOs.
• Two- to five-physician practices: 13 percent are members of ACOs.
• Six- to 10-physician practices: 17 percent are members of ACOs.
• 11- to 20-physician practices:  23 percent are members of ACOs.
• 20-plus physician practices:  41 percent are members of ACOs

As is the case with concierge/membership practices, it’s likely that the number of practices participating in ACOs will increase the coming years. In the one year since CMS announced the first 27 organizations that would participate in Medicare’s ACO program, ACOs have sprung up across the country.

As Andrew Croshaw, a partner and managing director of the Center for Accountable Care Intelligence at Leavitt Partners, recently told Physicians Practice, "While the number of ACOs that are known represents a very small fraction of the total number of physicians or physician groups, or the total number of hospitals, the amount of growth that we're seeing suggests to us that there is legitimate momentum in this movement,”

How do you think healthcare reform will change the reimbursement model at your practice? Share your thoughts in the comments box below.