CMS on Tuesday finalized Medicare Part B physician payment rates for 2014. The revised rates are based on the reviled yet statutory sustainable rate of growth formula. Consequently, Medicare Part B payments to doctors will drop around 25% in January unless Congress suspends the SGR formula for another year while it tries to repeal and replace the formula as discussed in a recent FEHBlog post. Interestingly, CMS also decided to create “separate payments [to doctors] for managing a patient’s care outside of a face-to-face visit for practices equipped to provide these services.” This policy will take effect in 2015.
will replace the current five levels of hospital clinic visit codes for both new and established patients with a single code describing all outpatient clinic visits. A single code and payment for clinic visits is more administratively simple for hospitals and better reflects hospital resources involved in supporting an outpatient visit. The current five levels of outpatient visit codes are designed to distinguish differences in physician work.
Finally, the Wall Street Journal reported earlier this week on the pros and cons of concierge medicine. Concierge medical practices charge a retainer on top of their regular fees for services in return for a higher level of patient care.
Of the estimated 5,500 concierge practices nationwide, about two-thirds charge less than $135 a month on average, up from 49% three years ago, according to Concierge Medicine Today, a trade publication that also runs a research collective for the industry. Inexpensive practices are driving growth in concierge medicine, which is adding offices at a rate of about 25% a year, says the American Academy of Private Physicians.
Unlike high-end concierge practices, which typically bill insurers for medical services on top of collecting retainer fees, the lower-end outfits usually don’t accept insurance. Instead, they charge patients directly for treatment along with membership, often posting menu-style prices for services and requiring payment up front, which is why it is called “direct primary care.” Eliminating insurance billing cuts 40% of the practices’ overhead expenses, enabling them to keep fees low, doctors say.
That practice, of course, does not stop the patient from submitting an out-of-network claim to the health insurer. The article illustrates one of the problems with the Affordable Care Act — it creates new “free” services that people historically paid out of pocket — the change adds administrative expenses to the cost of the service or supply. It’s more affordable for the individual up front but it increases overall health insurance premiums. There is no such thing as a free lunch.