Merging Practices

Here’s a great press release to start your day! Some important excerpts for those who don’t make the jump:

The [payment] disparity is forcing pediatricians out of business and may be prompting the next generation of physicians to choose other specialties. “I love caring for children; it’s the best job in the world. I don’t want to
see our best doctors shying away from pediatrics because they know that
they can make a better living in almost any other specialty,” said Anthony
Battista, M.D.

That’s exactly how many of our clients feel.  Great quote.  It’s not almost any other specialty, though, it’s every other specialty.  Well, except podiatry.
Another good one from Dr. Mirkin:

In some cases, the reimbursement I receive for an immunization has
been more than 20 percent below the wholesale cost of the vaccine, and this doesn’t take into consideration the administrative, stocking and other
costs associated with vaccines,” said Dr. Gary Mirkin of MDs4Kids in Great Neck, NY, and CEO of Allied Pediatrics of New York. “I’ve been forced into a role as an underfinanced public health agency as the health plans, in effect, take advantage of my dedication to my patients.

Again, spot on. Keep up the good work. What does concern me is this data from the article:

Medicare reimburses physicians almost 15 percent more than it did in 2001 for the more complex office visit, code 99214 (from $92 in 2001 to $105 today), yet reimbursement from the commercial insurance carriers for the same code during this period has actually fallen 1.5 percent, from $65 to $64.

As a result, Drs. Mirkin, Battista, and 50 other peds have been putting together a single, large pediatric group (for some time now) in an effort to fight these shrinking reimbursements. I’ve written briefly about our experience with mergers and we generally caution against them for a variety of reasons.
What does that have to do with the data? Well, PCC’s clients, in a much smaller time frame (2003-2006 vs. 2001-2007) have seen their average 99213 and 99214 reimbursement go up 11% and 14% respectively. So, while Dr. Mirkin’s peers are watching their reimbursements fall, our customers watch them rise. If I were to go back to 2001 and include 2007, the increases would be even higher.
Why? Because our clients negotiate. I know at least two practices Allied Peds has approached who have negotiated significant increases in the last year, particularly for E&M codes! These aren’t particularly large practices, simply practices who have done their homework and learned to say no. I sincerely hope that all the time, effort, and money (mostly to lawyers) that Allied Peds spends leaps their reimbursement beyond what their next door neighbors are doing on their own.

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