Is Medicare's 85% reimbursement rule fair?

Is Medicare's 85% reimbursement rule fair?
Is Medicare's 85% reimbursement rule fair?

I have been a physician assistant (PA) practicing dermatology in California for eight years.  In my clinical practice, I will occasionally hear someone at the front desk or on the phone asking, “Does it cost the same to see the PA as it does to see the doctor?”

Historically, private insurance carriers have paid standard fees, so there was no issue in receiving payment for PA services. The exception is Medicare, which reimburses only 85% of the standard fees for PA-provided care.

To get around this rule, PAs are able to choose “bill incident to,” which consists of billing under a supervising physician if they are in the office. This brings in 100% of Medicare's allowable fee instead of 85%. While Medicare was the only insurance carrier implementing the 85% rule, recently I have heard rumors that private insurance carriers may start to follow this trend.

Is it fair for insurance carriers to pay less for a PA office visit than an MD visit? To answer this question, we have to ask more questions.

Do you spend less time or more time with your patients than your supervising physician? Is your time less valuable than an MD's? Should the reimbursement rate be different based on the treating healthcare provider, or should it be based on time spent and complexity of the case (as with EM codes 99212, 99213, 99214, etc)? Are PAs a more economical provider choice because of the 85% rule or because of their ability to increase access to care?

 Increasing access to care allows healthcare providers to see patients in a timely manner, enabling them to provide better preventive medicine, while decreasing complications and medication errors.  Most medical professionals would agree that prevention is more economical than trying to cure a cancer once it has spread or trying to manage a chronic health problem that is out of control.

I went to PA school because I wanted to provide medical care to the underserved, and throughout my three years at the University of Southern California's PA program, I was encouraged to pursue this humanitarian approach.  The idea that PAs can provide more economical access to health care than MDs has long been presented as a selling point. I take my time with every patient and try my best to educate them. This is how I was trained, and I believe this value is integral to my practice.

When I first graduated from PA school and began shadowing my supervising physician, I always wondered why patents would ask me questions after the doctor left, instead of just asking the supervising physician when he was there. It occurred to me that although my mentor was a great diagnostician, he was usually in a rush to stay on time with a 40 to 50 patient a day workload. Although he spent more time with patients who had complex conditions, he did not have time to go through long explanations for simple diagnoses.

But patients with acne, warts and solar lentigo have questions, too, right? If PAs are spending so much time providing direct patient care, why don't insurance carriers reimburse PA care equal to MD care?

I am in a unique position in which I have the chance to evaluate multiple practice management reports from a variety of sources, and this is a topic of great concern for many PAs and their supervising physicians.  PAs that are able to “bill incident to” will collect 100% reimbursement, but those who do not qualify have to bill under their own Medicare number.  This means they will only collect 85% reimbursement for the same service.  Many PAs are upset by the 85% rule and feel it is an insult, whereas others do not seem to mind or be offended at all. Where do you stand? I'm curious to hear your opinions.

Katherine Wilkens, PA-C, is Vice President of Certified Physician Assistant Consulting and works closely with founder and President, Kasey Drapeau D'Amato, PA-C. Katherine maintains her clinical expertise by working full time in dermatology and part time in emergency medicine. She practices in Northern California and is a member of AAPA, CAPA and SDPA.

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