How urologists can reduce their dependence on Medicare

August 1, 2010

How do you plan cash flow with more delays and/or significant reductions looming for Medicare?

The scheduled 21.3% cut was replaced with a 2.2% payment increase-retroactive to June 1-through November. Medicare has indicated that any claims that were processed at the lower rate will be reprocessed. For more details on this, see http://www.urologytimes.com/paymentincrease.

All patients billed at the lower fee for their 20% or deductibles (including the secondary insurances) can be re-billed at the higher price. According to Medicare rules, you should re-bill at the higher rate if any patient was charged the lower rate. As consultants, we would recommend that you do so. .

How do you plan cash flow with more delays and/or significant reductions looming for Medicare? Obviously, Medicare has a significant effect on general revenue for the average urologist. Additionally, many payer contracts are indexed to Medicare payments, extending the effect of these changes. In the end, a delay is better than a reduction, but it does not help with cash flow.

While the obvious solution is to reduce dependence on Medicare and negotiate contracts that do not base reimbursement on current Medicare rates, the reality of the marketplace makes doing so difficult, if not impossible, for many practices.

For any non-Medicare or Medicare Advantage plan, attempt to negotiate a fee schedule based on older versions of the Medicare Resource-Based Relative Value Scale and a conversion factor indexed to a past time frame, or at the very least, a set date would be ideal for any payers wishing to index to Medicare. Although tough negotiating requires a willingness to walk away from a contract, some payers will listen to requests for fee schedule changes and carve-outs. Before attempting to renegotiate a contract, you need to establish your own parameters based on percentage of revenue and your market presence.

Another solution is to reduce your dependence on Medicare by changing your Medicare status. You have options, but you need to consider your practice capabilities and your market before acting. Begin by considering your relationship to Medicare, which falls under one of three categories:

Participating provider. Most urologists are currently participating providers. As a participating provider, you agree to accept Medicare rates for the services you provide. Charge what you wish, bill Medicare, and collect any deductible or co-insurance from either the patient or the patient's Medicare supplement. Your status as a participating provider is determined each year during the last quarter; Medicare will renew your status each year if you do not submit a request to change.

Non-participating provider. A non-participating provider collects from the patient and submits a bill to Medicare. The patient is reimbursed by Medicare and any supplemental insurance. Your charges are subject to a limiting charge of 115% of 95% of the Medicare allowed amount, including all multiple procedure reductions. Your status as a non-participating provider can be changed each year during the last quarter; Medicare will renew your status each year if you do not submit a request to change.

Opt-out. Charge the patient whatever you wish; your contract is with the patient. The patient will not receive reimbursement from Medicare for any service you provide unless they successfully appeal the claim, which is unlikely. Supplemental insurance will also avoid reimbursing services provided by an opt-out provider.