POLICY: Two Scenarios … By Eric Novack

Here is a quick hit for the day. We have read about Medicare (actually CMS, but it sounds better to give Medicare its own personality) publishing payments for 30 procedures. I encourage you check out cms.gov and try to actually understand the Excel file that you get for your efforts.

Only government could call that ‘disclosure.’

Private insurers are also getting into the mix. We have all heard about Aetna publishing the range of reimbursement
  for contracted physicians. Many other companies are announcing that they will
  follow suit. These news reports always include the comment that physicians and
  hospitals do not want this published. I disagree.

Two scenarios can emerge from this, once all insurers publish reimbursement 
rates (and they are not mutually exclusive).

As an orthopedic surgeon, I will use an orthopedic example. If insurer X reports
  publicly that the range of reimbursement for treating a broken wrist ranges from $500 – $750, I will obviously immediately go and check to see where I am
  on that scale. If I am at the low end, I will definitely not sign a new contract
  with that insurer for less than what my colleagues are getting for the same
  work. I will not be alone.

Scenario two is more intriguing. Once all insurers publish their fee schedules, doctors no longer need to participate in insurance plans. All I need to do is set my rates comparably- and reasonably- and drop all the insurance plans. And I can eliminate much of my billings/collection staff. I can also now account
  for the actual work it takes to do different things—and perhaps accept lower
  payment for some things, while charging more for much more complex work. (The example I use is joint replacement: a re-do [revision] joint replacement also pays about 20% more than a first time [primary] joint replacement, even though it can take 4x the work, with increased liability.)

The disclosure would have the absolute opposite effect on insurers than they intended. Although I suspect the smart folks at Aetna, UnitedHealthcare, Healthnet, and others have considered this already, and it is why they are so reluctant to actually make public this information.

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