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Will Doctors Stop Seeing Medicare Patients after 20.1% Cut in Reimbursements Next Month?

Health Insurance Companies Process 1 in 5 Claims Wrong

Medicare Reduces Payments to Physicians

In the late afternoon on November 27th, the day before Thanksgiving as we were traveling to spend time with family and friends, the Centers for Medicare and Medicaid Services (CMS) released the Medicare Physician Fee Schedule for 2014 with a huge cut in reimbursements to providers.

CMS reduced the Medicare Conversion Factor (CF) from where it is today in 2013 at $34.0230 down to $27.2006 in 2014.

So what does that mean? It means that Medicare payments to doctors will be reduced by 20.1% starting on January 1, 2014.

Now the 20.1% cut in reimbursements is just an average. This means some specialties will see even more of a lower reduction in payments. But, if you a chiropractor, you’re in luck. Chiropractors will see a 12% increase in Medicare payments. Mental health providers will benefit too and get an 8% increase as well.

I wanted to see exactly what the difference was in dollars for the most popular office visit CPT codes our medical practices use, so I created the table below.

2013 Fee
2014 Fee
$ Diff% Diff
  99201    New, Office Visit, Level 143.8932.91  -10.98
  99202   New, Office Visit, Level 275.5156.58  -17.93
  99203   New, Office Visit, Level 3108.1982.15  -26.04
  99204   New, Office Visit, Level 4164.67126.21  -38.46
  99205   New, Office Visit, Level 5203.80157.22  -46.58
  99211   Est, Office Visit, Level 120.4115.23  -5.18
  99212   Est, Office Visit, Level 243.8933.18  -10.71
  99213   Est, Office Visit, Level 372.8155.49  -17.32
  99214   Est, Office Visit, Level 4106.8381.87  -24.96
  99215   Est, Office Visit, Level 5142.90109.62  -33.28


Looking at the percentage difference by CPT code it looks like more than a 20.1% pay cut in our core Evaluation & Management codes. It is as high as 25%.

On top of these cuts there is currently a proposed bill in Congress to repeal the sustainable growth rate formula which allows Medicare to increase payments based on the growth of GDP (Gross Domestic Product). If this bill passes it will put a freeze on Medicare reimbursements for the next decade. That’s a freeze on increases, not reductions.

And did I forget to mention that we will still have the 2% cuts in reimbursement due to the federal spending sequestration.

There still is time for Congress to act and reduce the cuts as they did in the beginning of 2013. I sure hope they do but we will have to wait and see.

So what are your thoughts about these Medicare cuts and how they will affect your practice? Will your doctors be dropping Medicare patients? Leave me your comments below.

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is a 20 year veteran of healthcare having managed medical practices. He advises medical practices, physicians and practice administrators on how to run their practice and manage their medical billing and revenue cycle management. Manny speaks, blogs and makes videos at www.CaptureBilling.com, a blog that is tops in the medical billing and coding field. READ MORE

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The analysis of any medical billing or coding question is dependent on numerous specific facts -- including the factual situations present related to the patients, the practice, the professionals and the medical services and advice. Additionally, laws and regulations and insurance and payer policies (as well as coding itself) are subject to change. The information that has been accurate previously can be particularly dependent on changes in time or circumstances. The information contained in this web site is intended as general information only. It is not intended to serve as medical, health, legal or financial advice or as a substitute for professional advice of a medical coding professional, healthcare consultant, physician or medical professional, legal counsel, accountant or financial advisor. If you have a question about a specific matter, you should contact a professional advisor directly. CPT copyright American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association.

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