Expensive Equipment
The cost of the equipment needed to run a successful practice has been steadily rising for some time, and it does not show any signs of leveling out in the near future. As if the rising costs of vaccines and general medical supplies were not enough, the impending coding regulation change to ICD-10 demands even more expensive equipment and extended training for staff to learn how to use this complex new system. According a study by the American Medical Association, preparing for ICD-10 may cost practices at least $56,000. (See our previous blog to learn more about the implications of ICD-10).
As a result of these increasing financial pressures, a 2014 survey by Medical Economics found that more than 84% of physicians claimed that their practices were doing the same or worse financially than they were a year ago. That means that less than 16% reported financial growth in the last year.
Value-Based Payments
Until recently, healthcare facilities operated on a fee-for-service basis. This allowed them to charge for individual doctor visits, the tests they ordered, and the other basic services involved in patient care. New regulations are now requiring that physicians convert to a value-based payment system, which dictates that they only be paid for the value of the care they deliver. That is, physicians are required to demonstrate improvements in their patients' conditions in order to be compensated for their efforts.
The transition to value-based payments also requires physicians to report their Physician Quality Reporting System (PQRS) data to the Centers for Medicare and Medicaid Services (CMS). Physicians who fail to properly submit these reports are seeing their reimbursements cut by 1.5% this year, and that number will rise to 2% in 2016. Even the experts are unable to predict how long it will take to fully transition to this new reporting method and payment structure, but they predict that physicians across the nation will suffer financially during this transitional period.
Reimbursements
In order for physicians to be paid, they must be reimbursed by the insurance companies covering their patients. Unfortunately, these insurance companies are increasingly denying claims, making it harder for physicians to be compensated for their efforts. Insurance companies are frequently denying claims based off of minute errors, such as the modifiers not matching the procedure codes or slight discrepancies between the way the doctor submitted the patient's name and the way the insurance company has the patient's name on record (these discrepancies can be as slight as a missing hyphen in the last name).
The increasingly uncooperative behavior of insurance companies is taking a financial toll on physicians across the country. As a result, more and more physicians are choosing to work outside the system by not accepting insurance. This allows them to treat their patients as they see fit, rather than conforming to the methods set by insurance companies, and ensure that they are paid for their services.
The Hire Connection Can Help Ease The Burden
As these financial pressures create a greater and greater strain on physician-owned practices, finding the right physicians (and the right compensation level) for these facilities becomes even more critical. In addition to helping you find the right candidate for your opportunity, our medical recruiting company can help you design a proper compensation package that will entice potential candidates without creating a greater financial strain on your practice.
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