As reimbursement rates continue to decline, physicians across specialties are facing significant financial and operational challenges that directly impact patient care.
These issues could get worse — a funding bill passed by the House of Representatives in a 217-213 vote, according to CNN, allows the 2.8% Medicare physician pay cut to take effect.
The stopgap measure, designed to keep the government funded through Sept. 30, the end of fiscal 2025, now heads to the Senate..
Four physicians joined Becker’s to discuss how declining reimbursement rates have influenced financial stability and patient care.
Editor’s note: Responses have been lightly edited for clarity and length.
Question: In what ways have declining reimbursement rates influenced financial stability and patient care in your practice?
Daniel Del Gaizo, MD. Orthopedic Surgeon at BOSS Orthopaedics — Hilton Head (S.C.): Declining reimbursement rates affect patient care in several ways. It necessitates physicians treat more patients to avoid an overall decrease in income. This results in less time that can be spent on each patient encounter. It necessitates more work that a physician in private practice will have to perform to clear their overhead. This creates challenges for new physicians that are building their practice and older physicians that are looking to wind down but not completely retire. Lastly, declining reimbursements incentivize physicians to aggressively pursue patients with private health insurance while decreasing or even eliminating exposure to lower paying government plans such as Medicaid or even Medicare.
Surinder Devgun, MD. Managing Partner of Rochester (N.Y.) Gastroenterology Associates: As a practice, we have a principle not to deny care, even though many safety-net programs reimburse amounts to cover only overhead. It is not fair to the patients and realistically costs more money to actively deny care than just to provide it at a loss. Seeking alternative revenue streams has been key, including hiring [advanced practitioners], amongst other ideas that are usually practice specific, such as infusions, vaccinations, independent labs. One must continue to provide high-quality care, which is the easy part for most physicians, but then demonstrate value in your activities to leverage higher reimbursements or value based contracting, which is the challenging aspect of medicine and is best served in the context of a large practice.
John Donovan, MD. Otolaryngologist at ENT Salem (Ore.): The effect on private practice is manifesting as an increasingly difficult model to recruit to. Historical income data cannot be projected forward with any confidence. This leaves potential new recruits wary of the private practice model. Similar to declining birth rates in the general population, declining private practice candidate numbers will lead to collapse of private practice. As to patient care, every practice is being forced to monitor payor mix very carefully. Governmental programs, in particular, pay for care at rates that will bankrupt even well-run practices if allowed to proliferate. The era of cost-shifting is drawing to a close as employers simply refuse to accept double-digit annual increases in premium costs as a result of this underwriting of government sponsored health insurance. Access once promised by ACA coverages is proving illusory as practices weed out selected payer types. Individuals finding subsidized marketplace coverage who do find access are realizing they are no closer to protection from medical bankruptcy, as publicly subsidized coverages typically carry deductible and maximum out-of-pocket limits which are insurmountable.
Mike Milne, MD. Orthopedic Surgeon in Santa Barbara, Calif. Declining reimbursements are forcing orthopedic practices to see more patients in less time, which can impact the quality of care. Rising costs and shrinking margins make it harder to reinvest in staff, technology and facility upgrades. Since procedural services tend to be reimbursed better than conservative treatments, practices may prioritize surgery and injections over nonsurgical care. Hiring and retaining high-quality staff has also become more challenging as financial pressures increase. To adapt, many practices are moving more procedures to outpatient settings like ASCs, which offer better financial returns and a more controlled environment.
