According to a new study from CareCloud and QuantiaMD, a variety of issues are resulting in a downward trend in practice profitability. Among the four most commonly-cited obstacles, three are related to government regulations and mandates.
The survey, a partnership between cloud-based health technology provider, CareCloud, and QuantiaMD, the largest online physician’s community, was created to provide a voice to practices across the U.S. regarding issues that impact their financial and operational health.
Out of the more than 5,012 physicians surveyed, 48% consider the Affordable Care Act to be the primary government-driven initiative negatively affecting their profitability in 2013. The looming ICD-10 switch comes in a close second at 44%; followed by the government’s EHR adoption push at 26%.
Affordable Care Act
We’ve all heard the arguments for and against President Obama’s Affordable Care Act. Yet, the prevalent consensus among physicians points to a decline in doctor reimbursements in long run.
As a result of Obamacare’s individual insurance mandate, the Medicaid program is estimated to grow by at least 16 million applicants in the coming years. Because Medicaid reimbursement rates are lower than those of private insurance, many doctors are dreading the influx of new public patients.
Doctors currently earn $20 for each Medicaid patient, versus $260 per privately insured visit. Oftentimes private practices actually lose money on Medicaid patients due to operating costs. This issue hasn’t been adequately addressed by the ACA.
Another ACA provision, the expanded use of bundled payments, is also troubling many physicians. Bundling is supposed to coordinate care by aligning payments across providers for services delivered through an entire episode of care, such as heart bypass or hip replacements, rather than paying for each service separately.
Many doctors, though, are predicting that bundling may hinder care.
“It may not cover the more expensive regimens,” said Dr. Justin Favaro, an oncologist from the Oncologist Specialists of Charlotte.
“Every time a patient comes through the door, we treat them the way they should be treated. We choose the regimen that is best for them. That may be the… least expensive regimen or most expensive regimen. It really depends on the patient, what their health problems are. We don’t want to be restricted,” he added.
ICD-10
Let’s face it. Many physicians are freaking out over the impending ICD-10 deadline coming October 1, 2014.
Not only is it set to dramatically complicate coding procedures for your staff, if not implemented correctly, but ICD-10 could also cost you big bucks.
Learning to utilize the roughly 150,000 codes under ICD-10, instead of the 18,000 currently in ICD-9, is estimated to take billers and coders between 50 to 100 hours each. The hundreds of hours your staffers and doctors will spend in training are time they won’t spend performing their usual duties — consequently slowing down productivity.
“ICD-10 demands significantly more specificity in diagnosing and coding, something the healthcare landscape isn’t accustomed to or skilled in effecting at this time,” said Alex Johnson, HIT Consultant and founder of CredentialedCare.
Although the expansion of medical codes is supposed to encourage improved, more detailed reimbursements, expect a decrease in collections until your practice learns how to correctly bill with the new coding system.
“In the short-run, ICD-10 could be highly disruptive to reimbursement patterns. However, in the long run, the coding specificity will enable the public health system to target health promotion strategies in a more effective way and we predict that claims data will be more meaningful,” added Johnson.
The EHR Adoption Push
For the past few years, CMS has been trying to encourage national EHR adoption by promoting its EHR Incentive Programs.
Through these initiatives, eligible professionals can receive tens of thousands of dollars for demonstrating Meaningful Use of certified EHR technology. However, its been shown the government’s incentive amount does not cover the entirety of costs associated with implementing a new EHR.
A new system can cost thousands of dollars to purchase, not including the cost of new equipment and training required to properly operate new software.
Cloud-based EHRs can provide a relatively inexpensive alternative to client-server EHR systems since there’s no need to purchase hardware. But it will not reduce the time needed to transfer patient records from paper charts to electronic formats.
With these government programs in mind, it’s no surprise 57% of physicians surveyed in the QuantiaMD study cited rising costs as a major financial challenge for 2013. Between the hiring of new staff, retraining of existing employees, and purchasing of new equipment to meet technological needs, practices are scrambling to keep up with new legislation.
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