Re: Medicare only clinic - pays well? -- where is my faulty math?

November 12, 2010

it is NOT 8 patient seeing hrs a day are you nuts?? each person takes another hr after they leave- documentation writing notes renewing meds reviewing labs. constructing and reviewing consultant notes, labs etc figure 6 hrs

and figure 2 99214 s an hr then remember Medicare will not pay you for 7 weeks while they wrangle over the sgr That's jULY then they will not pay your from say Sept 7 til Nov 1 becasue of unspecified fiscal year end problems

them they will cost you billing time for some trivia /modifer thing 99214 here is 96 - x 2 an hr is 192? x 6 hrs a day- and x 192 days a yr- 221,184 - 40% overhead about 133,000.00 sure sounds great call me when it works

I was having a friendly discussion on a

list of friends and had mentioned my theory of the gov’t setting up

Medicare only clinics.

Docs are salaried, get gov’t

vacation and benefits, retirement at 20 years service, etc – basically run

by the gov’t and you are a gov’t employee.

Medicare patients can opt to be seen in

the Medicare only clinic (connected nationwide with an EMR for continuity) for “free”.

Or see their regular private docs for

the regular fees and co-insurance, etc.

One of the friends said that sounded

like a great idea – where does he invest?

I explained that it would have to be run

by the gov’t since a regular private practice couldn’t make any

money doing this.

I started typing my discussion below –

but then didn’t send the e-mail when my calculation came up with the doc

making $192,000/year – seeing Medicare ONLY.

I’m thinking my logic or

calculations were wrong.

Here is my original unsent e-mail…the

descriptions of the time for each visit are mine and just guesstimates…your

mileage may vary.

I was being generous on the overhead

50-60% -- I didn’t think my non-medical friends would believe overhead of

75% or more.

The payment #’s are for Colorado.

The sweet spot is seeing Level 3 visits.

==============================================

Very difficult to run a medicare only

shop - and make a living.

Most Medicare are very complicated, so at least a level 3 (99213) and often a

level 4 (99214)

Code

Description

99212

Office/outpatient

visit, est -- very simple doctor visit - 10-15 minutes - look at a mole

- no medications or tests.

99213

Office/outpatient

visit, est -- medium visit - higher decision level - check labs or start

medication - 15-25 minutes

99214

Office/outpatient

visit, est -- high level of decisions with multiple problems - changing meds,

adding meds, checking labs -- 25-45 minutes

There

is a level 5 -- 99215, but it is even more complicated and if you have too many

of these, Medicare audits you and fines you if they find something wrong. I

don't believe I've ever used this for Medicare. Medicare is the one

insurance that can literally throw you in jail if you screw up.

Here is what Medicare pays for the above visits.

HCPCS

CODE

MODIFIER

SHORT

DESCRIPTION

NON-FACILITY

PRICE

99212

Office/outpatient

visit, est

$39.34

99213

Office/outpatient

visit, est

$65.96

99214

Office/outpatient

visit, est

$98.83

Primary care has a high overhead model -- meaning we have to pay a med tech (or

nurse - which is even more $$), front desk person to answer phone, computer

equipment and electronic medical records, licensing and continuing ed, clean

the rooms, order meds and supplies to stock, etc. Typical overhead for a

primary care business is 60% -- 50% would be considered low overhead.

So, if you see 4 level 2's per hour (4 x $39.34 = $157.36/hour)

Or 1 level 4 and a level 2 per hour ($138.17/hour)

Or 3 level 3 per hour ($197.88)

Your take home is about $100/hour.

48 weeks (assuming 4 weeks vacation) x 5 days per week x 8 patient hours per

day = 1,920 hours per year.

===========================================

That’s where I stopped – if seeing 3 level 3’s

per hour could net you $192,000/year by only seeing Medicare – I didn’t

figure I had much of a leg to stand and complain about low pay.

My math was – 3 level 3’s per hour = $197 –

minus 50% overhead is ~$100/hour profit.

The actual amount is $98.94/hour – but times 1,920

hours/year – it still equals = $189,964.

Granted, if you see a lower mix of patients – 50%

overhead and $157/hour = $78/hour or $149,760/year

Or $138/hour of level 2s = $69/hour or $132,480/year.

That probably sounds not as good – but still --

$132k/year is still a pretty good salary for many professions and these

recessionary times.

Anyway, where is my faulty calculation?

Is it the overhead?

Is it the # and type of Medicare patients one can see in an

hour?

Sounds like an OK living – and you only have to see

one insurance.

Granted – that insurance can throw you in jail if you

code wrong – but still…

Open to critical review of the #’s.

Locke, MD

-- PATIENTS-please remember that email may not be entirely secure, and that Email is part of the medical record and is placed into your chart ( be careful what you say!)

Email is best used for appointment making and brief questionsEmail replies can be expected within 24 hours-Please CALL if the matter is more urgent . MD

ph fax impcenter.org

November 12, 2010

I would take it..1.medicare pts are a breezeno eigibility checking in generalno copaysno authsglad to come in ( and never trying to wrangle something for nothing)

no facility contracts/ restrictions to followmost specialists accept it...My office admin /billing costs are significantly lower for medicare pts, ' cept some of them need a lot more telephonic hand holding..

so really overhead could be lower..2.also medicare pays best here..3. If you do 6 pt hrs rather than 8 patient hrs, fixed costs increase the overhead percentage ( I do 4 pts hrs a day s- so a greater chunk goes to overhead)

it is NOT 8 patient seeing hrs a day are you nuts?? each person takes another hr after they leave- documentation writing notes renewing meds reviewing labs. constructing and reviewing consultant notes, labs etc

figure 6 hrs

and figure 2 99214 s an hr then remember Medicare will not pay you for 7 weeks while they wrangle over the sgr That's jULY then they will not pay your from say Sept 7 til Nov 1 becasue of unspecified fiscal year end problems

them they will cost you billing time for some trivia /modifer thing 99214 here is 96 - x 2 an hr is 192? x 6 hrs a day- and x 192 days a yr- 221,184 - 40% overhead about 133,000.00 sure sounds great call me when it works

I was having a friendly discussion on a

list of friends and had mentioned my theory of the gov’t setting up

Medicare only clinics.

Docs are salaried, get gov’t

vacation and benefits, retirement at 20 years service, etc – basically run

by the gov’t and you are a gov’t employee.

Medicare patients can opt to be seen in

the Medicare only clinic (connected nationwide with an EMR for continuity) for “free”.

Or see their regular private docs for

the regular fees and co-insurance, etc.

One of the friends said that sounded

like a great idea – where does he invest?

I explained that it would have to be run

by the gov’t since a regular private practice couldn’t make any

money doing this.

I started typing my discussion below –

but then didn’t send the e-mail when my calculation came up with the doc

making $192,000/year – seeing Medicare ONLY.

I’m thinking my logic or

calculations were wrong.

Here is my original unsent e-mail…the

descriptions of the time for each visit are mine and just guesstimates…your

mileage may vary.

I was being generous on the overhead

50-60% -- I didn’t think my non-medical friends would believe overhead of

75% or more.

The payment #’s are for Colorado.

The sweet spot is seeing Level 3 visits.

==============================================

Very difficult to run a medicare only

shop - and make a living.

Most Medicare are very complicated, so at least a level 3 (99213) and often a

level 4 (99214)

Code

Description

99212

Office/outpatient

visit, est -- very simple doctor visit - 10-15 minutes - look at a mole

- no medications or tests.

99213

Office/outpatient

visit, est -- medium visit - higher decision level - check labs or start

medication - 15-25 minutes

99214

Office/outpatient

visit, est -- high level of decisions with multiple problems - changing meds,

adding meds, checking labs -- 25-45 minutes

There

is a level 5 -- 99215, but it is even more complicated and if you have too many

of these, Medicare audits you and fines you if they find something wrong. I

don't believe I've ever used this for Medicare. Medicare is the one

insurance that can literally throw you in jail if you screw up.

Here is what Medicare pays for the above visits.

HCPCS

CODE

MODIFIER

SHORT

DESCRIPTION

NON-FACILITY

PRICE

99212

Office/outpatient

visit, est

$39.34

99213

Office/outpatient

visit, est

$65.96

99214

Office/outpatient

visit, est

$98.83

Primary care has a high overhead model -- meaning we have to pay a med tech (or

nurse - which is even more $$), front desk person to answer phone, computer

equipment and electronic medical records, licensing and continuing ed, clean

the rooms, order meds and supplies to stock, etc. Typical overhead for a

primary care business is 60% -- 50% would be considered low overhead.

So, if you see 4 level 2's per hour (4 x $39.34 = $157.36/hour)

Or 1 level 4 and a level 2 per hour ($138.17/hour)

Or 3 level 3 per hour ($197.88)

Your take home is about $100/hour.

48 weeks (assuming 4 weeks vacation) x 5 days per week x 8 patient hours per

day = 1,920 hours per year.

===========================================

That’s where I stopped – if seeing 3 level 3’s

per hour could net you $192,000/year by only seeing Medicare – I didn’t

figure I had much of a leg to stand and complain about low pay.

My math was – 3 level 3’s per hour = $197 –

minus 50% overhead is ~$100/hour profit.

The actual amount is $98.94/hour – but times 1,920

hours/year – it still equals = $189,964.

Granted, if you see a lower mix of patients – 50%

overhead and $157/hour = $78/hour or $149,760/year

Or $138/hour of level 2s = $69/hour or $132,480/year.

That probably sounds not as good – but still --

$132k/year is still a pretty good salary for many professions and these

recessionary times.

Anyway, where is my faulty calculation?

Is it the overhead?

Is it the # and type of Medicare patients one can see in an

hour?

Sounds like an OK living – and you only have to see

one insurance.

Granted – that insurance can throw you in jail if you

code wrong – but still…

Open to critical review of the #’s.

Locke, MD

-- PATIENTS-please remember that email may not be entirely secure, and that Email is part of the medical record and is placed into your chart ( be careful what you say!)

Email is best used for appointment making and brief questionsEmail replies can be expected within 24 hours-Please CALL if the matter is more urgent . MD

ph fax impcenter.org

-- Sangeetha Murthy M.D

November 12, 2010

,As usual, your math is correct and the concept is pretty firm. The problem with most insurances is not the pay. I mean, I would actually have a hard time asking someone for $100 for 30 minutes of my time (now a dollar a day to manage all their needs I can see doing). The problem with insurance (all insurances) is the administrative insanities which leave us documenting way more than we would otherwise need in order to justify a code. It is the constant fighting to know what drug is on formulary or spending 30 minutes getting a prior auth so someone else can make a lot of money doing the tests on the patient. It is the not getting paid for the phone calls and the lab reviews and the e-mails, etc. And finally, it is the fact that procedures still get paid way more than E & M (so even though the overall rate is ok, it is comparably worse than what our colleagues are making). You are also right that in a time of recession, our reimbursement has actually gone up a bit (maybe not enough to cover cost of living, but at least it hasn’t gone way down—of course, we still have to see what happens in 2 weeks).One thing that I have noticed in my 7 years as an IMP—Medicare reimbursement has increased around $15 for a 99214. BCBS reimbursement has gone up like $2, Cigna has not changed. So now the second highest paying insurance in our area is good old Medicare. Go figure. From: [mailto: ] On Behalf Of Sent: Thursday, November 11, 2010 8:54 PMTo: Subject: Re: Medicare only clinic - pays well? -- where is my faulty math? it is NOT 8 patient seeing hrs a day are you nuts?? each person takes another hr after they leave- documentation writing notes renewing meds reviewing labs. constructing and reviewing consultant notes, labs etc figure 6 hrs and figure 2 99214 s an hr then remember Medicare will not pay you for 7 weeks while they wrangle over the sgr That's jULY then they will not pay your from say Sept 7 til Nov 1 becasue of unspecified fiscal year end problems them they will cost you billing time for some trivia /modifer thing 99214 here is 96 - x 2 an hr is 192? x 6 hrs a day- and x 192 days a yr- 221,184 - 40% overhead about 133,000.00 sure sounds great call me when it works I was having a friendly discussion on a list of friends and had mentioned my theory of the gov’t setting up Medicare only clinics.Docs are salaried, get gov’t vacation and benefits, retirement at 20 years service, etc – basically run by the gov’t and you are a gov’t employee.Medicare patients can opt to be seen in the Medicare only clinic (connected nationwide with an EMR for continuity) for “free”.Or see their regular private docs for the regular fees and co-insurance, etc.One of the friends said that sounded like a great idea – where does he invest?I explained that it would have to be run by the gov’t since a regular private practice couldn’t make any money doing this.I started typing my discussion below – but then didn’t send the e-mail when my calculation came up with the doc making $192,000/year – seeing Medicare ONLY.I’m thinking my logic or calculations were wrong.Here is my original unsent e-mail…the descriptions of the time for each visit are mine and just guesstimates…your mileage may vary.I was being generous on the overhead 50-60% -- I didn’t think my non-medical friends would believe overhead of 75% or more.The payment #’s are for Colorado.The sweet spot is seeing Level 3 visits.==============================================Very difficult to run a medicare only shop - and make a living.Most Medicare are very complicated, so at least a level 3 (99213) and often a level 4 (99214)CodeDescription99212Office/outpatient visit, est -- very simple doctor visit - 10-15 minutes - look at a mole - no medications or tests. 99213Office/outpatient visit, est -- medium visit - higher decision level - check labs or start medication - 15-25 minutes99214Office/outpatient visit, est -- high level of decisions with multiple problems - changing meds, adding meds, checking labs -- 25-45 minutes There is a level 5 -- 99215, but it is even more complicated and if you have too many of these, Medicare audits you and fines you if they find something wrong. I don't believe I've ever used this for Medicare. Medicare is the one insurance that can literally throw you in jail if you screw up.Here is what Medicare pays for the above visits.HCPCS CODEMODIFIERSHORT DESCRIPTIONNON-FACILITY PRICE99212Office/outpatient visit, est $39.34 99213Office/outpatient visit, est $65.96 99214Office/outpatient visit, est $98.83 Primary care has a high overhead model -- meaning we have to pay a med tech (or nurse - which is even more $$), front desk person to answer phone, computer equipment and electronic medical records, licensing and continuing ed, clean the rooms, order meds and supplies to stock, etc. Typical overhead for a primary care business is 60% -- 50% would be considered low overhead.So, if you see 4 level 2's per hour (4 x $39.34 = $157.36/hour)Or 1 level 4 and a level 2 per hour ($138.17/hour)Or 3 level 3 per hour ($197.88)Your take home is about $100/hour.48 weeks (assuming 4 weeks vacation) x 5 days per week x 8 patient hours per day = 1,920 hours per year. ===========================================That’s where I stopped – if seeing 3 level 3’s per hour could net you $192,000/year by only seeing Medicare – I didn’t figure I had much of a leg to stand and complain about low pay.My math was – 3 level 3’s per hour = $197 – minus 50% overhead is ~$100/hour profit.The actual amount is $98.94/hour – but times 1,920 hours/year – it still equals = $189,964. Granted, if you see a lower mix of patients – 50% overhead and $157/hour = $78/hour or $149,760/yearOr $138/hour of level 2s = $69/hour or $132,480/year. That probably sounds not as good – but still -- $132k/year is still a pretty good salary for many professions and these recessionary times. Anyway, where is my faulty calculation? Is it the overhead?Is it the # and type of Medicare patients one can see in an hour? Sounds like an OK living – and you only have to see one insurance.Granted – that insurance can throw you in jail if you code wrong – but still… Open to critical review of the #’s. Locke, MD-- PATIENTS-please remember that email may not be entirely secure, and that Email is part of the medical record and is placed into your chart ( be careful what you say!)Email is best used for appointment making and brief questionsEmail replies can be expected within 24 hours-Please CALL if the matter is more urgent . MD ph fax impcenter.org

November 12, 2010

, a dollar a day for a year ids $365or what you would collect in 3 and half visits for a patient with 2 or more comorbidities at $100/30min visit,( dm, ht)

so why would you hesitate to collect $100 for a 30 min visit?( if that s the only way you get reimbursed for all the care you give in between visits)

,As usual, your math is correct and the concept is pretty firm. The problem with most insurances is not the pay. I mean, I would actually have a hard time asking someone for $100 for 30 minutes of my time (now a dollar a day to manage all their needs I can see doing). The problem with insurance (all insurances) is the administrative insanities which leave us documenting way more than we would otherwise need in order to justify a code. It is the constant fighting to know what drug is on formulary or spending 30 minutes getting a prior auth so someone else can make a lot of money doing the tests on the patient. It is the not getting paid for the phone calls and the lab reviews and the e-mails, etc. And finally, it is the fact that procedures still get paid way more than E & M (so even though the overall rate is ok, it is comparably worse than what our colleagues are making). You are also right that in a time of recession, our reimbursement has actually gone up a bit (maybe not enough to cover cost of living, but at least it hasn’t gone way down—of course, we still have to see what happens in 2 weeks).

One thing that I have noticed in my 7 years as an IMP—Medicare reimbursement has increased around $15 for a 99214. BCBS reimbursement has gone up like $2, Cigna has not changed. So now the second highest paying insurance in our area is good old Medicare. Go figure.

From: [mailto: ] On Behalf Of

Sent: Thursday, November 11, 2010 8:54 PMTo: Subject: Re: Medicare only clinic - pays well? -- where is my faulty math?

it is NOT 8 patient seeing hrs a day are you nuts?? each person takes another hr after they leave- documentation writing notes renewing meds reviewing labs. constructing and reviewing consultant notes, labs etc

figure 6 hrs and figure 2 99214 s an hr then remember Medicare will not pay you for 7 weeks while they wrangle over the sgr That's jULY then they will not pay your from say Sept 7 til Nov 1 becasue of unspecified fiscal year end problems

them they will cost you billing time for some trivia /modifer thing 99214 here is 96 - x 2 an hr is 192? x 6 hrs a day- and x 192 days a yr- 221,184 - 40% overhead about 133,000.00 sure sounds great call me when it works

I was having a friendly discussion on a list of friends and had mentioned my theory of the gov’t setting up Medicare only clinics.

Docs are salaried, get gov’t vacation and benefits, retirement at 20 years service, etc – basically run by the gov’t and you are a gov’t employee.Medicare patients can opt to be seen in the Medicare only clinic (connected nationwide with an EMR for continuity) for “free”.

Or see their regular private docs for the regular fees and co-insurance, etc.One of the friends said that sounded like a great idea – where does he invest?

I explained that it would have to be run by the gov’t since a regular private practice couldn’t make any money doing this.I started typing my discussion below – but then didn’t send the e-mail when my calculation came up with the doc making $192,000/year – seeing Medicare ONLY.

I’m thinking my logic or calculations were wrong.Here is my original unsent e-mail…the descriptions of the time for each visit are mine and just guesstimates…your mileage may vary.

I was being generous on the overhead 50-60% -- I didn’t think my non-medical friends would believe overhead of 75% or more.The payment #’s are for Colorado.

The sweet spot is seeing Level 3 visits.==============================================

Very difficult to run a medicare only shop - and make a living.Most Medicare are very complicated, so at least a level 3 (99213) and often a level 4 (99214)

CodeDescription99212

Office/outpatient visit, est -- very simple doctor visit - 10-15 minutes - look at a mole - no medications or tests. 99213

Office/outpatient visit, est -- medium visit - higher decision level - check labs or start medication - 15-25 minutes99214Office/outpatient visit, est -- high level of decisions with multiple problems - changing meds, adding meds, checking labs -- 25-45 minutes

There is a level 5 -- 99215, but it is even more complicated and if you have too many of these, Medicare audits you and fines you if they find something wrong. I don't believe I've ever used this for Medicare. Medicare is the one insurance that can literally throw you in jail if you screw up.

Here is what Medicare pays for the above visits.HCPCS CODE

MODIFIERSHORT DESCRIPTION

NON-FACILITY PRICE

99212Office/outpatient visit, est

$39.34

99213Office/outpatient visit, est

$65.96

99214Office/outpatient visit, est

$98.83 Primary care has a high overhead model -- meaning we have to pay a med tech (or nurse - which is even more $$), front desk person to answer phone, computer equipment and electronic medical records, licensing and continuing ed, clean the rooms, order meds and supplies to stock, etc. Typical overhead for a primary care business is 60% -- 50% would be considered low overhead.

So, if you see 4 level 2's per hour (4 x $39.34 = $157.36/hour)Or 1 level 4 and a level 2 per hour ($138.17/hour)Or 3 level 3 per hour ($197.88)Your take home is about $100/hour.48 weeks (assuming 4 weeks vacation) x 5 days per week x 8 patient hours per day = 1,920 hours per year.

===========================================That’s where I stopped – if seeing 3 level 3’s per hour could net you $192,000/year by only seeing Medicare – I didn’t figure I had much of a leg to stand and complain about low pay.

My math was – 3 level 3’s per hour = $197 – minus 50% overhead is ~$100/hour profit.The actual amount is $98.94/hour – but times 1,920 hours/year – it still equals = $189,964.

Granted, if you see a lower mix of patients – 50% overhead and $157/hour = $78/hour or $149,760/year

Or $138/hour of level 2s = $69/hour or $132,480/year. That probably sounds not as good – but still -- $132k/year is still a pretty good salary for many professions and these recessionary times.

Anyway, where is my faulty calculation?

Is it the overhead?Is it the # and type of Medicare patients one can see in an hour?

Sounds like an OK living – and you only have to see one insurance.Granted – that insurance can throw you in jail if you code wrong – but still…

Open to critical review of the #’s. Locke, MD

-- PATIENTS-please remember that email may not be entirely secure, and that Email is part of the medical record and is placed into your chart ( be careful what you say!)

Email is best used for appointment making and brief questionsEmail replies can be expected within 24 hours-Please CALL if the matter is more urgent . MD

ph fax impcenter.org

-- Sangeetha Murthy M.D

November 12, 2010

Perhaps the actual hours per day of patient contact is too high.8 hours is 9-5 without any breaks.Let's say 9-12 and 1-5 -- with an hour for lunch/paperwork - and likely time after work, but basically 7 hours of contact seeing patients.

Then lets assume that none of want to see more than 20 patients per day -- ~3 per hour.It will be a mix, but...

HCPCS

CODE

MODIFIER

SHORT

DESCRIPTION

NON-FACILITY

PRICE

99212

Office/outpatient

visit, est

$39.34

99213

Office/outpatient

visit, est

$65.96

99214

Office/outpatient

visit, est

$98.83

20 patients at $40/visit = $800/day20 patients at $65/visit = $1,300/day20 patients at $98/visit = $1,960Of course, I don't think many of us could see 20 Medicare 99214's per day, so let's say 10 of the 99214's.

10 patients at $98/visit = $98048 weeks x 5 days per week = 240 days/year240 days x $800/day = $192,000 -- minus overheadMinus 50% overhead = $96,000Minus 75% overhead = $48,000240 days x $1,300/day -- seeing all 99213 x 20 patients = $312,000

Minus 50% overhead = $156,000Minus 75% overhead = $78,000I think my original math problem was coming at it from how many patients I could see in an hour versus how many patients we can reasonably see in a day.

Opinions vary, but most of us feel busy at 20 patients per day -- 30 is just too busy.15 is busy for some, but not busy for others.Anyway, taking a busy schedule of 20 patients per day - every day.Multiply by working 240 days of the year.

Minus 75% overhead.Wa-La -- we get the low reimbursement we thought.Of course, if I was to run a medicare only practice, I'd do limited phone visits (don't get paid), patients would need to return to discuss labs, etc. Have only a front desk/med tech which wouldn't be a difficult job since the correct answer is -- let me schedule you an appointment to discuss that with the doctor. Have limited space - 2 exam rooms - one room being my office. Etc, Etc.Maybe an EKG, but limited other ancillaries.

My only job every day is to see 20 patients at 99213/$65/visit and above.Keep my overhead to below 50% and - presto - I make >$156k per year.Yeah, I bet it's just that easy -- or not. Locke, MD

November 12, 2010

Most Medicare patients don't even answer the history questions in that amount of time and while I hope to keep overhead down I haven't gotten an accepted claim yet after 2 1/2 months of trying. (Not counting the 3 previous months of trying to get my new number after working for another organization and loosing my number to them. Of course the fact that Medicare started 2 files on me which none of us discovered til I got an acceptance letter and two days later a rejection letter with 2 different application numbers didn't help). Solme docs say Medicare is the best payer. I don't know as BCBS and Medicaid have not paid yet either. Risky small business---in many ways.

Carolyn McCormick in underserved HSA

I was having a friendly discussion on a

list of friends and had mentioned my theory of the gov’t setting up

Medicare only clinics.

Docs are salaried, get gov’t

vacation and benefits, retirement at 20 years service, etc – basically run

by the gov’t and you are a gov’t employee.

Medicare patients can opt to be seen in

the Medicare only clinic (connected nationwide with an EMR for continuity) for “free”.

Or see their regular private docs for

the regular fees and co-insurance, etc.

One of the friends said that sounded

like a great idea – where does he invest?

I explained that it would have to be run

by the gov’t since a regular private practice couldn’t make any

money doing this.

I started typing my discussion below –

but then didn’t send the e-mail when my calculation came up with the doc

making $192,000/year – seeing Medicare ONLY.

I’m thinking my logic or

calculations were wrong.

Here is my original unsent e-mail…the

descriptions of the time for each visit are mine and just guesstimates…your

mileage may vary.

I was being generous on the overhead

50-60% -- I didn’t think my non-medical friends would believe overhead of

75% or more.

The payment #’s are for Colorado.

The sweet spot is seeing Level 3 visits.

==============================================

Very difficult to run a medicare only

shop - and make a living.

Most Medicare are very complicated, so at least a level 3 (99213) and often a

level 4 (99214)

Code

Description

99212

Office/outpatient

visit, est -- very simple doctor visit - 10-15 minutes - look at a mole

- no medications or tests.

99213

Office/outpatient

visit, est -- medium visit - higher decision level - check labs or start

medication - 15-25 minutes

99214

Office/outpatient

visit, est -- high level of decisions with multiple problems - changing meds,

adding meds, checking labs -- 25-45 minutes

There

is a level 5 -- 99215, but it is even more complicated and if you have too many

of these, Medicare audits you and fines you if they find something wrong. I

don't believe I've ever used this for Medicare. Medicare is the one

insurance that can literally throw you in jail if you screw up.

Here is what Medicare pays for the above visits.

HCPCS

CODE

MODIFIER

SHORT

DESCRIPTION

NON-FACILITY

PRICE

99212

Office/outpatient

visit, est

$39.34

99213

Office/outpatient

visit, est

$65.96

99214

Office/outpatient

visit, est

$98.83

Primary care has a high overhead model -- meaning we have to pay a med tech (or

nurse - which is even more $$), front desk person to answer phone, computer

equipment and electronic medical records, licensing and continuing ed, clean

the rooms, order meds and supplies to stock, etc. Typical overhead for a

primary care business is 60% -- 50% would be considered low overhead.

So, if you see 4 level 2's per hour (4 x $39.34 = $157.36/hour)

Or 1 level 4 and a level 2 per hour ($138.17/hour)

Or 3 level 3 per hour ($197.88)

Your take home is about $100/hour.

48 weeks (assuming 4 weeks vacation) x 5 days per week x 8 patient hours per

day = 1,920 hours per year.

===========================================

That’s where I stopped – if seeing 3 level 3’s

per hour could net you $192,000/year by only seeing Medicare – I didn’t

figure I had much of a leg to stand and complain about low pay.

My math was – 3 level 3’s per hour = $197 –

minus 50% overhead is ~$100/hour profit.

The actual amount is $98.94/hour – but times 1,920

hours/year – it still equals = $189,964.

Granted, if you see a lower mix of patients – 50%

overhead and $157/hour = $78/hour or $149,760/year

Or $138/hour of level 2s = $69/hour or $132,480/year.

That probably sounds not as good – but still --

$132k/year is still a pretty good salary for many professions and these

recessionary times.

Anyway, where is my faulty calculation?

Is it the overhead?

Is it the # and type of Medicare patients one can see in an

hour?

Sounds like an OK living – and you only have to see

one insurance.

Granted – that insurance can throw you in jail if you

code wrong – but still…

Open to critical review of the #’s.

Locke, MD

November 12, 2010

Agree with Jean….if you see patients 6

hours/day x $100 per hour after overhead x 48 weeks (taking out 7 days of

holidays and 13 vacation days, but if it’s a gov’t job, you will get 2 weeks

sick leave and 2 weeks vacation, minimum PLUS holidays), then it’s

$144,000/year. Most physicians take at least ½ day off per week, so it’s more

like 27 hours per week X $100/hour X 48 weeks = $129,600. If you work a 4 day

work week, then it’s $115,200/year. That assumes 18 patients per day, if you

see 3 level 3’s per hour, on average.

BTW, we do code level 5’s – all of our

Medicare preop exams (which used to be billed as consults) now get a full ROS

before addressing the issue at hand….bumps it up to a level 5.

Pratt

Office Manager

Oak Tree Internal Medicine P.C

www.prattmd.info

From:

[mailto: ] On

Behalf Of

Sent: Thursday, November 11, 2010

5:54 PM

To:

Subject: Re:

Medicare only clinic - pays well? -- where is my faulty

math?

it is NOT 8 patient seeing hrs a day are

you nuts?? each person takes another hr after they leave-

documentation writing notes renewing meds reviewing labs. constructing

and reviewing consultant notes, labs etc

figure 6 hrs

and figure 2 99214 s an hr

then remember Medicare will not pay you for 7 weeks while they

wrangle over the sgr That's jULY

then they will not pay your from say Sept 7 til Nov 1

becasue of unspecified fiscal year end problems

them they will cost you billing time for some trivia /modifer

thing

99214 here is 96 - x 2 an hr is 192? x 6 hrs a day- and

x 192 days a yr- 221,184 - 40% overhead about 133,000.00

sure sounds great

call me when it works

I was having a friendly discussion on a list of friends and had

mentioned my theory of the gov’t setting up Medicare only clinics.

Docs are salaried, get gov’t vacation and benefits, retirement at 20

years service, etc – basically run by the gov’t and you are a gov’t employee.

Medicare patients can opt to be seen in the Medicare only clinic

(connected nationwide with an EMR for continuity) for “free”.

Or see their regular private docs for the regular fees and

co-insurance, etc.

One of the friends said that sounded like a great idea – where does he

invest?

I explained that it would have to be run by the gov’t since a regular

private practice couldn’t make any money doing this.

I started typing my discussion below – but then didn’t send the e-mail

when my calculation came up with the doc making $192,000/year – seeing Medicare

ONLY.

I’m thinking my logic or calculations were wrong.

Here is my original unsent e-mail…the descriptions of the time for each

visit are mine and just guesstimates…your mileage may vary.

I was being generous on the overhead 50-60% -- I didn’t think my

non-medical friends would believe overhead of 75% or more.

The payment #’s are for Colorado.

The sweet spot is seeing Level 3 visits.

==============================================

Very difficult to run a medicare only shop - and make a living.

Most Medicare are very complicated, so at least a level 3 (99213) and often a

level 4 (99214)

Code

Description

99212

Office/outpatient

visit, est -- very simple doctor visit - 10-15 minutes - look at a mole

- no medications or tests.

99213

Office/outpatient

visit, est -- medium visit - higher decision level - check labs or start medication

- 15-25 minutes

99214

Office/outpatient

visit, est -- high level of decisions with multiple problems - changing meds,

adding meds, checking labs -- 25-45 minutes

There is a level 5 -- 99215, but it is even more complicated and if you

have too many of these, Medicare audits you and fines you if they find

something wrong. I don't believe I've ever used this for Medicare.

Medicare is the one insurance that can literally throw you in jail if you screw

up.

Here is what Medicare pays for the above visits.

HCPCS CODE

MODIFIER

SHORT DESCRIPTION

NON-FACILITY PRICE

99212

Office/outpatient visit, est

$39.34

99213

Office/outpatient visit, est

$65.96

99214

Office/outpatient visit, est

$98.83

Primary care has a high overhead model -- meaning we have to pay a med tech (or

nurse - which is even more $$), front desk person to answer phone, computer equipment

and electronic medical records, licensing and continuing ed, clean the rooms,

order meds and supplies to stock, etc. Typical overhead for a primary care

business is 60% -- 50% would be considered low overhead.

So, if you see 4 level 2's per hour (4 x $39.34 = $157.36/hour)

Or 1 level 4 and a level 2 per hour ($138.17/hour)

Or 3 level 3 per hour ($197.88)

Your take home is about $100/hour.

48 weeks (assuming 4 weeks vacation) x 5 days per week x 8 patient hours per

day = 1,920 hours per year.

===========================================

That’s where I stopped – if seeing 3 level 3’s per hour could net you

$192,000/year by only seeing Medicare – I didn’t figure I had much of a leg to

stand and complain about low pay.

My math was – 3 level 3’s per hour = $197 – minus 50% overhead is

~$100/hour profit.

The actual amount is $98.94/hour – but times 1,920 hours/year – it

still equals = $189,964.

Granted, if you see a lower mix of patients – 50% overhead and

$157/hour = $78/hour or $149,760/year

Or $138/hour of level 2s = $69/hour or $132,480/year.

That probably sounds not as good – but still -- $132k/year is still a

pretty good salary for many professions and these recessionary times.

Anyway, where is my faulty calculation?

Is it the overhead?

Is it the # and type of Medicare patients one can see in an hour?

Sounds like an OK living – and you only have to see one insurance.

Granted – that insurance can throw you in jail if you code wrong – but

still…

Open to critical review of the #’s.

Locke, MD

--

PATIENTS-please remember that email may not be entirely secure, and that

Email is part of the medical record and is placed into your chart (

be careful what you say!)

Email is best used for appointment making and brief questions

Email replies can be expected within 24 hours-Please CALL if the

matter is more urgent .

MD

115 Mt Blue

Circle

Farmington

ME 04938

ph fax

impcenter.org

November 12, 2010

Agree. We also bill all of our DM for level 5's based on time codes of 45 minutes. More than half is couseling and fits the definition of why there is this code