Payment Perils in Primary Care

Robert W. Morrow, MD


January 28, 2015

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Hi. This is Dr Bob Morrow, and this is the Transparent Medical Practice video blog. Happy New Year. I am a family physician in the Bronx and this is my office. I guess you can notice that.

I wanted to talk today about a subject that is intriguing. We are in interesting times. I call it the "knife-edge" for primary care, which means that as the clock struck midnight on December 31, we entered another new era for primary care.

On the one hand, we have been seeing incentives that increase pay from some sources, very few, and for the past 2 years we have enjoyed parity between Medicaid and Medicare [reimbursement]. In New York State, where I work, this means a 60% increase in the amount I get paid to take care of poor people. In fact, Medicare is really one of our very best payers—better than almost all of the commercial plans.

So, with the federal government in the form of Medicare, Medicaid, and the Veterans Administration holding 62% of the market—and with their overhead at about 3% as opposed to commercial insurers' 25%-30%—it looked like we were in for a time when primary care would not just be recognized as the basis to improve the healthcare of the public but, in fact, a profession to be rewarded with adequate pay.

We will go into that more in my next blog when we talk a little bit about what value-based payment or pay-for-performance is all about. But today I want to talk about the other edge of the knife, which is that at midnight on December 31, 2014, as you probably have heard, the parity between Medicare and Medicaid went away as if chopped by a knife.

Medicaid [reimbursement] will fall again by 60% in New York State. And we are also looking at a number of new plans from the commercial health insurers, which are being issued through the [Affordable Care Act] exchanges, with immense $3000 deductibles, huge copays for services, many services excluded, and many doctors excluded.

With the combined cut to Medicaid and many of these new plans excluding doctors or paying $40 a visit, I not uncommonly now receive $40 a visit, when it costs me roughly $80 a visit to run my practice.

So, here we are at a time when it is plausible that primary care will come back, when we will see a resurgence in the health of the public, as we would expect from any kind of primary care–centered medical home kind of approach. And yet we might be cut off from that by the knife of cuts from the commercial insurers and Congress cutting out the parity between Medicare and Medicaid.

How is this playing out where you are? I know where I am it is existentially a peril. I hope that is not true for you, but it brings to mind the classic Emerson, Lake & Palmer song "I Believe in Father Christmas," in which they say at the very end, "The Christmas you get, you deserve."

I hope that is not so. I hope the patriots in Congress don't feel that it is important to cut off millions of Americans from healthcare, but that seems to be their patriotic duty.

Let's hear your opinion. Thanks very much. This is Bob Morrow from the Transparent Medical Practice blog. I hope to hear from you soon.


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