Beware: Physician Pay Rate Controversies Won’t End Anytime Soon

“Cross recovery” may not be a hot compliance focus area for federal and state auditors at the moment—but stricter scrutiny is on the horizon, says healthcare management consultant Duane C. Abbey. And because the cross recovery issue can rear its ugly head in a number of settings and circumstances, as a healthcare provider, you must put sound prevention policies and procedures into place now.

Doing so means understanding the different types of cross recovery situations, what federal auditors will be looking for, key compliance issues, and what to do if the hospital service is denied, Abbey notes in his ProfEdOnDemand webinar, “Cross Recovery Recoupment for Physicians and Hospitals.”

Medicare Physician Reimbursement Controversies Not Going Away

Physician reimbursement issues have been making headlines for years and aren’t going to go away any time soon, reports Healthcare Finance News.

The Medicare trust that pays for Part A hospital care will run out of money by 2026—three years earlier than projected last year, the Medicare Board of Trustees announced in a recent report.

The shortfalls come as the Affordable Care Act and Medicare Access and CHIP Reauthorization Act payment updates cut into future physician pay.

“Should there be unfavorable economic conditions such as high inflation, Medicare payments to physicians will not keep pace with the average rate of their cost increases,” Healthcare Finance News stated.

This news comes as healthcare industry experts are warning the Trump Administration that a proposal to transfer some Medicare Part B-covered drugs to Part D would negatively impact care quality and provider reimbursement.

“Such a policy modification would likely present a significant change for providers in terms of revenues and their role in purchasing, storing, and billing for physician-administered drugs,” noted a report from Avalere, a healthcare strategies company. “This transition could also result in unintended patient access barriers caused by differences in payment, cost-sharing, reimbursement, and settings of care in Part B and Part D.”

Problem: Medicare Pay Rates Are an ‘Anchor’

Where Medicare sets rates is critically important for physicians, summarized a study published in the Journal of the American Medical Association.

“Traditional Medicare’s administratively set rates act as an anchor for physician reimbursement in the Medicare Advantage market,” noted the study’s authors, Erin Trish, et al. “Reforms that would transition the Medicare program toward premium support models that end traditional Medicare could affect how clinicians are paid.”

In other words, reimbursement under Medicare Advantage was more strongly associated with traditional Medicare rates than commercial rates—even though Advantage traditionally pays less than normal Medicare.

“An office visit for an established patient resulted in a mean Medicare Advantage price 96.9 percent of traditional Medicare,” noted Becker’s Hospital Review writer Morgan Haefner.

With Medicare getting the squeeze, and physicians on the hunt for revenue, now is the time to revisit cross recovery, says Abbey, and to pin down strategies for different healthcare providers working together to avoid cross recovery situations.

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