COVER STORY

Exclusive survey
Fees & reimbursements

Doctors continue to raise fees in hopes of recouping increased practice expenses, but reimbursements are thwarting the plan, according to our latest Continuing Survey.

By Dorothy L. Pennachio
Senior Editor

Reimbursements for primary care physicians are not keeping pace with moderate increases in fees. If that sounds familiar, it should. It's been the reality physicians have faced for the past several years.

According to the Medical Economics Continuing Survey, which samples MDs and DOs in office-based private practice, primary care physicians raised their median office visit fees this year by an average of 4.9 percent in the 10 CPT codes we surveyed. However, reimbursements were virtually unchanged—up just 0.5 percent—over 2002.

Office visit fees for FPs rose an average of 6.3 percent, while reimbursements inched up only 0.7 percent. The picture was worse for hospital care: FPs' median fees for six hospital care codes rose by an average of 7.3 percent, while reimbursements decreased by nearly 4 percent.

Internists fared even worse. They increased median fees for new and established patient visits by 1.5 percent, while reimbursements declined by 2 percent. Internists fared better in the hospital. Although their fees were virtually unchanged, they saw substantial increases in reimbursement for two codes—a 15 percent jump for initial hospital care (99221), and a 14 percent jump for subsequent hospital care (99231). Internists raised their median fee for flexible sigmoidoscopy by 2 percent and for ECG with interpretation and report (93000) by 7 percent.

GPs' did best of all primary care physicians in the fee/reimbursement battle: Median office visit fees rose by an average of 2.1 percent, while reimbursement climbed 5.7 percent, including a 15 percent hike for 99214 and a 14 percent increase for 99215.

While cardiologists' median office fees rose by 4.5 percent, the story was different for their most commonly performed services and procedures. Fees for four of the five services we surveyed decreased by an average of 5.2 percent, yet reimbursements rose.

Gastroenterologists saw fees and reimbursements take nearly an equal, but opposite, tack: Median fees for initial office visits rose an average of 3.8 percent, while reimbursement decreased by 3.6 percent. The picture was even bleaker when it came to revisits. Fees dropped 1.4 percent and median reimbursement dropped in all five codes by an average of 7.6 percent. Payment for all six hospital care codes dropped by an average of 7.1 percent and for liver biopsy by 9 percent.

Pediatricians' median office visit fees rose an average of 5.7 percent, while reimbursement climbed by 1.3 percent. These specialists actually lowered median fees for subsequent hospital care by an average of 8.3 percent, while reimbursement declined by 4.3 percent. Median fees for history and examination of a normal newborn dropped by 7 percent, while reimbursement declined 11 percent.

Ob/gyns lucked out. Even though they held fees steady for 99211, their reimbursement rose by 19 percent. These doctors raised their median fees for 99212 from $51 to $60, and reimbursements went up from $35 to $40. Ob/gyns raised the median fee for circumcisions by 25 percent, while reimbursements went up only 9 percent. They didn't gain much ground overall, though: fees for their major procedures increased by 4.7 percent, but reimbursements rose by just 3.9 percent.

Is there anything doctors can do about shrinking reimbursements? Consider joining a larger group. "These typically have more clout with the plans than smaller practices," says Barry Pillow of HealthCare Consulting in Greensboro, NC. Multispecialty groups also report charging more for new and established patient visits than do small or single-specialty ones.

Or consider moving. As it was 10 years ago, fees charged by doctors in the West are higher than in other areas—$162 for a new patient visit and $72 for an established patient. In 1993, western FPs charged $95 for 99204 and $45 for 99213.

Pillow also recommends a regular fee analysis. "Look at your contracts and see what payers are reimbursing for various codes," he says. "Then set your fees to maximize reimbursement."

The alternative—to blindly increase fees across the board—just means that you're likely to increase your writeoffs. "We'd like to increase fees across the board by 5 percent, but it's a no-brainer that raising fees doesn't mean raising reimbursements," says Charles Davant III, an FP in Blowing Rock, NC. "Only the uninsured fall outside, and for the most part, they don't pay anyway. So we're stuck."

A large percentage of Davant's practice is Medicare, and for those patients, estimates are that CMS will likely reduce payments to physicians next year by 4.2 percent. "Several of the large insurance companies base their reimbursement on 115% of what Medicare pays," he says. "We can't continue this way."

In an effort to offset steadily dropping reimbursements, many doctors are beginning to charge for services that used to be gratis—like phone calls, filling out forms, and copying records.

Next year, our Continuing Survey will include a few questions about these charges. Meanwhile, here are some representative fees we've heard about from talking with doctors and consultants:

• Transferring records: $10

• Calling pharmacies with script refills: $5

• Filling out forms for school and camp physicals or disability insurance: $15-25 or 25 cents per page

• Resolving complex insurance problems: $100 an hour

• Making after-hours telephone calls: $2 per minute; $25 if the problem could have been dealt with during office hours

• Consulting with family: $15 to $50

When considering whether to charge for these services, consult with your payers: The charges might violate your contracts and cause you to be dropped from networks.

How do your fees and reimbursements compare to those of your colleagues? The charts and tables on the below will give you an idea. For a description of how the survey was conducted, see "Physicians' earnings: Our exclusive survey" from our Sept. 19 issue.

What your colleagues charge for office visits

Fees are affected by . . .

What IMs, FPs, and GIs charge for
flexible sigmoidoscopies (45330)

How cardiologists are doing

Typical charges and reimbursements
in four specialties

What about hospital care?

Dorothy Pennachio. Exclusive survey: Fees & reimbursements.

Medical Economics

Oct. 10, 2003;80:96.