Medicare Spending in Decline: How Do Practices Stay Afloat?

By Bill Bunker, Executive Vice President, SCI Solutions

In a recent report from the Congressional Budget Office, average spending per Medicare recipient appears to be declining. While New York Times’ reporters Margot Sanger-Katz and Kevin Quealy argue the numbers do not necessarily indicate an ongoing downward trend, one fact remains clear – Medicare reimbursement rates for physicians have been cut significantly since the Affordable Care Act and the Budget Control Act went into effect in 2010 and 2011. While the cost cuts are contributing to decreased government healthcare spending, behind the stats many medical practices are struggling to break even.

Challenges Go Beyond Lower Reimbursement Rates

With Medicare payments lower per patient, practices are trying to increase the volume of patient appointments to stay afloat. How can this be done when most physicians have a defined patient population? The answer is in patient referrals. Many physicians, particularly specialists, rely on patient referrals for their business. However, nearly half of all referrals received by practices never result in a patient visit for a variety of reasons:

  1. Outdated Technology: Practices rely on their fax machine to send and receive referrals, causing delays in information exchange.
  2. Inefficient Processess: Administrative staff spend hours wasted on hold with insurance payer trying to obtain pre-authorizations on referrals prior to scheduling patients.
  3. Poor Communication: Many referrals have incomplete information, causing administrative staff to play phone tag with referring practices to gather the missing pieces.
  4. Lag Time in Contacting Patients: Between obtaining insurance authorizations and missing information on referrals, practices can take weeks to contact the patient to schedule their appointment.

Technology Offers a Better Way to See Patients

The solution to capturing more referrals? Contact patients quickly. Referrals are very time-sensitive – the longer a practice takes to contact a patient, the less likely they are to come in for a visit. The patient decides they feel better, they see a different specialist, the list goes on. A study by the Journal of Internal Medicine shows that only 54 percent of fax-based referrals ever get scheduled, compared to the 83 percent that get scheduled when the referral is sent electronically on a web-based platform, such as Clarity Health. We go an extra step by offering quick and accurate insurance pre-authorization servicing so administrative staff can contact patients quickly, increasing referral capture rates. While practices cannot control Medicare reimbursement rates, they can control how successful they are at capturing referrals to increase their patient appointment volumes..

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