6 ms·

To be fair to doctors offices, this is in part because some insurance plans (Medicare's the biggest offender, but then again Medicare's the biggest everything)

by vec 9y ago

To be fair to doctors offices, this is in part because some insurance plans (Medicare's the biggest offender, but then again Medicare's the biggest everything) pay doctors below cost for certain procedures. Doctors cope with this by systematically overcharging other patients' insurance companies when they're reasonably sure the patient has already hit their copay for the procedure. Essentially, health insurance for the poor isn't formally subsidized well enough to make it actually workable, but doctors have professional ethics that disincentivize them from refusing care. So the system has evolved a clumsy, ad-hoc mechanism for wealthy patients to cross-subsidize poorer ones. American health insurance sucks.

sidlls 9y ago
Below what cost?
- chimeracoder 9y ago
  Below the marginal costs of care. In other words, if a practice can purchase a vaccine or supplies for a lab test at $100/unit wholesale, Medicare pays the doctor (in the aggregate) $93 for it. That doesn't take into account any overhead or costs of running a practice, of course, such as wages for nurses and administrative staff. Providers typically make a loss on Medicare patients and then make up the difference by charging private insurers (who are, by law, required to pay more than Medicare does). Medicare's rates are so notoriously low that for doctors who can't do this - doctors who treat a disproportionate number of Medicare patients - they actually have a separate stipend program to pay them enough to stay in business.
  - flubert 9y ago
    Does anyone know how to look up what Medicare/Medicaid pays for particular procedures, and how to look up codes in the first place? Somehow I came across that G8709 was for prescribing antibiotics. I figure I should be able to plug that into something like: https://www.cms.gov/apps/physician-fee-schedule/search/search-results.aspx?Y=0&T=0&HT=0&CT=0&H1=G8709&M=5 https://www.cms.gov/apps/physician-fee-schedule/search/searc... ...but I apparently don't know the proper incantation to get that to work. It would also be interesting is someone had concrete side-by-side examples of what Medicare/Medicaid pay vs. what everyone else pays for several different "common" items.
    - chimeracoder 9y ago
      > It would also be interesting is someone had concrete side-by-side examples of what Medicare/Medicaid pay vs. what everyone else pays for several different "common" items No payer (including Medicare) pays a single price across the board - even Medicare pays different amounts to different providers in different regions, etc. So there is no one single price for each payer that we could compare, and it'd be hard to find true apples-to-apples comparisons between them, short of polling individual practices and asking them what they received last month (which is hardly rigorous). Remember that these are often treated as closely guarded secrets - if they were truly public, the AMA couldn't charge for access to CPT codes, and it would be harder for Medicare and private payers to negotiate the minimum rate for each provider. It's the same reason you'd be hard-pressed to ask most companies to make all of their individual salary data public. The reason we know that Medicare pays so little, though, is that (a) it's no secret - even Medicare doesn't really try to hide it, (b) Medicare has to publish aggregate data, and we know from the aggregate data that they reimburse 7% less than COGS on average, and (c) it's statutorily mandated.
      - flubert 9y ago
        Are you saying that Medicare/Medicaid reimbursement rates aren't public information?
        chimeracoder 9y ago
        > Are you saying that Medicare/Medicaid reimbursement rates aren't public information? Private insurer rates are definitely not public information, for any definition of "public". Medicare reimbursement rates are sort of public, but not at the level of granularity you want. And a portion of that is because the question is not easily defined. For a given CPT code, Medicare might pay one of many different rates, depending on factors such as the geographic region, whether the provider operates in a CAH, whether the provider qualifies as a DSH, etc. That level of granularity is not easily accessible, and without it, there's no way to give meaningful example individual comparisons without running the risk of cherry-picking non-representative examples simply due to availability bias. (Also, Medicare and Medicaid can't be lumped together. Medicare is a single, federal program that is administrated in four parts. Medicaid is a set of 50 different programs run at the state level, each of which can be administrated in more ways than I can count. The one thing that they all have in common here is that, like Medicare, they pay abysmal rates to providers, but the relationships that they have are even more complex - even in a single state, like New York, there are literally hundreds of different ways that Medicaid services can be provided, depending on the type of plan chosen. Source: founded a company that had to abstract all of this complexity for patients, who were disproportionately on Medicare or Medicaid)
  - sidlls 9y ago
    Forgive me, but I'm deeply skeptical of unsourced claims about any government program on forums where there are a lot of IT folks. Do you have references or suggestions for specific things to search for to support these statements?
- vec 9y ago
  Below operating costs. Rent plus utilities plus relevant salaries plus amortized cost of equipment. This is confounded a bit because a lot of medicine involves lots of expensive equipment and staff with huge student loans to pay down but low day-to-day operating costs, but for a lot of specialties there exists no set of insurance-independent prices that allow a normal clinic following industry standard practices to operate without losing money.
  - chimeracoder 9y ago
    > Below operating costs. Rent plus utilities plus relevant salaries plus amortized cost of equipment. It's worse than that - it's below COGS (direct materials). So even before you account for rent/utilities/salaries/amortized costs, they're still making a loss, unless they operate in a CAH.

by vec 9y ago

sidlls 9y ago

Below what cost?

chimeracoder 9y ago
Below the marginal costs of care. In other words, if a practice can purchase a vaccine or supplies for a lab test at $100/unit wholesale, Medicare pays the doctor (in the aggregate) $93 for it. That doesn't take into account any overhead or costs of running a practice, of course, such as wages for nurses and administrative staff. Providers typically make a loss on Medicare patients and then make up the difference by charging private insurers (who are, by law, required to pay more than Medicare does). Medicare's rates are so notoriously low that for doctors who can't do this - doctors who treat a disproportionate number of Medicare patients - they actually have a separate stipend program to pay them enough to stay in business.
- flubert 9y ago
  Does anyone know how to look up what Medicare/Medicaid pays for particular procedures, and how to look up codes in the first place? Somehow I came across that G8709 was for prescribing antibiotics. I figure I should be able to plug that into something like: https://www.cms.gov/apps/physician-fee-schedule/search/search-results.aspx?Y=0&T=0&HT=0&CT=0&H1=G8709&M=5 https://www.cms.gov/apps/physician-fee-schedule/search/searc... ...but I apparently don't know the proper incantation to get that to work. It would also be interesting is someone had concrete side-by-side examples of what Medicare/Medicaid pay vs. what everyone else pays for several different "common" items.
  - chimeracoder 9y ago
    > It would also be interesting is someone had concrete side-by-side examples of what Medicare/Medicaid pay vs. what everyone else pays for several different "common" items No payer (including Medicare) pays a single price across the board - even Medicare pays different amounts to different providers in different regions, etc. So there is no one single price for each payer that we could compare, and it'd be hard to find true apples-to-apples comparisons between them, short of polling individual practices and asking them what they received last month (which is hardly rigorous). Remember that these are often treated as closely guarded secrets - if they were truly public, the AMA couldn't charge for access to CPT codes, and it would be harder for Medicare and private payers to negotiate the minimum rate for each provider. It's the same reason you'd be hard-pressed to ask most companies to make all of their individual salary data public. The reason we know that Medicare pays so little, though, is that (a) it's no secret - even Medicare doesn't really try to hide it, (b) Medicare has to publish aggregate data, and we know from the aggregate data that they reimburse 7% less than COGS on average, and (c) it's statutorily mandated.
    - flubert 9y ago
      Are you saying that Medicare/Medicaid reimbursement rates aren't public information?
      - chimeracoder 9y ago
        > Are you saying that Medicare/Medicaid reimbursement rates aren't public information? Private insurer rates are definitely not public information, for any definition of "public". Medicare reimbursement rates are sort of public, but not at the level of granularity you want. And a portion of that is because the question is not easily defined. For a given CPT code, Medicare might pay one of many different rates, depending on factors such as the geographic region, whether the provider operates in a CAH, whether the provider qualifies as a DSH, etc. That level of granularity is not easily accessible, and without it, there's no way to give meaningful example individual comparisons without running the risk of cherry-picking non-representative examples simply due to availability bias. (Also, Medicare and Medicaid can't be lumped together. Medicare is a single, federal program that is administrated in four parts. Medicaid is a set of 50 different programs run at the state level, each of which can be administrated in more ways than I can count. The one thing that they all have in common here is that, like Medicare, they pay abysmal rates to providers, but the relationships that they have are even more complex - even in a single state, like New York, there are literally hundreds of different ways that Medicaid services can be provided, depending on the type of plan chosen. Source: founded a company that had to abstract all of this complexity for patients, who were disproportionately on Medicare or Medicaid)
- sidlls 9y ago
  Forgive me, but I'm deeply skeptical of unsourced claims about any government program on forums where there are a lot of IT folks. Do you have references or suggestions for specific things to search for to support these statements?
vec 9y ago
Below operating costs. Rent plus utilities plus relevant salaries plus amortized cost of equipment. This is confounded a bit because a lot of medicine involves lots of expensive equipment and staff with huge student loans to pay down but low day-to-day operating costs, but for a lot of specialties there exists no set of insurance-independent prices that allow a normal clinic following industry standard practices to operate without losing money.
- chimeracoder 9y ago
  > Below operating costs. Rent plus utilities plus relevant salaries plus amortized cost of equipment. It's worse than that - it's below COGS (direct materials). So even before you account for rent/utilities/salaries/amortized costs, they're still making a loss, unless they operate in a CAH.