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Is Accepting Medicare Losing Money for Your Practice?

Posted 4:52 PM by

In the healthcare world today, as reimbursements decline, overhead expenses continue to increase, and it is becoming more and more difficult for independent practices to stay afloat. Physician practices have to put on their business hats and assess the viability of their organization based on their current business model. For physicians that accept public insurance, a cost-benefit analysis of their Medicare business may be a beneficial exercise. 

As the Medicare population increases, doctors, in a lot of cases, end up with more complicated and time consuming patients. Spending more time to care for a patient and getting reimbursed less for that care, does not add up to a profitable bottom line. 

Deciding to stop accepting Medicare patients obviously involves more than just reviewing a cost-benefit analysis and making a cut. Physicians will wrestle with ethical and moral decisions as well. This is not a decision to take lightly, therefore physicians should undergo a thorough financial and market analysis in order to make an informed decision.

A few questions to consider are:

  • Am I losing money on Medicare patients or just not making as much money as in the past?
  • If I drop Medicare, is there an opportunity in my region to grow other areas of my business? Do I practice in a high Medicare population?
  • What if I continue to treat my current Medicare patients, but stop accepting new Medicare patients?
  • Could I lose other business (family members of my Medicare patients)?
  • What would happen to my referrals from other physicians?

Some may view dropping public insurance as an extreme measure, but in an ever changing healthcare world, where a profitable practice is becoming harder and harder to maintain, all areas of a physician's business should be analyzed for potential opportunities to change.

About the Author
Lisa Curry is a partner in Katz, Sapper & Miller’s Healthcare Resources Group. Lisa works closely with her healthcare clientele to devise and implement tax and accounting strategies to help them minimize tax liability and thoughtfully plan for the future. Connect with her on LinkedIn.

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