Related Experiment Videos
Physician losses from Medicare and Medicaid discounts: how real are they?
Insights
Physicians do not face inequitable burdens from Medicare and Medicaid fee discounts. Raising these fees would create unjustified gains for physicians, not improve care access.
Area of Science:
- Health Economics
- Medical Policy
Background:
- Physicians often claim Medicare and Medicaid fee discounting creates an inequitable burden.
- Healthcare payment systems involve complex fee negotiations between providers and insurers.
Purpose of the Study:
- To examine the impact of Medicare and Medicaid fee discounting on physicians.
- To analyze the fee structures and their implications for healthcare providers.
Main Methods:
- Utilized survey data from the Health Care Financing Administration.
- Analyzed data from 5,000 primary care physicians.
Main Results:
- A clear fee hierarchy exists, with usual physician charges exceeding Medicare and Medicaid reimbursement rates.
- Physicians engage in revenue maximization within existing payment systems.
- Increasing Medicare and Medicaid fees to usual physician charges would result in unjustified financial gains.
Conclusions:
- The study found no evidence of inequitable burdens on physicians due to fee discounting.
- Current fee structures allow for physician revenue maximization.
- Significant increases in Medicare and Medicaid reimbursement are not justified by work effort or supply needs.
Abstract:
Physicians' claims that extensive Medicare and Medicaid fee discounting imposes an inequitable burden on them are examined using survey data from the Health Care Financing Administration on 5,000 primary care physicians. A definite fee hierarchy is documented, with the physician's usual charge at the top and Medicare and Medicaid allowables at the bottom. Under usual, customary, and reasonable methods, physicians can use fees to maximize payment, and insurer attempts to control fees result in both sides participating in a revenue maximization-expenditure control game. Raising Medicare and Medicaid allowables to the physician's usual fee is shown to result in large windfall gains that are unnecessary and unjustified in terms of work effort, human capital investment, or eliciting an adequate supply of practitioners.