Independent doctors still fall short of equal pay

Doctor
Independent doctors can adopt strategies to improve their payouts.

Independent physicians are struggling to find equal footing with employed doctors, as they’re often reimbursed notably less than their hospital- or health system-affiliated counterparts, according to a new survey.

In its 2016 Fee Schedule Survey, Physicians Practice found that doctors affiliated with a hospital or health network are paid about $74 on average for office visits coded for new patients, while independent doctors are paid about an average of $58.40. That gap exists for visits with established patients as well; employed physicians are paid an average of $58.70 compared, to about $43.10 for independent doctors. 

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Susanne Madden, president and CEO of consulting firm the Verden Group, told the publication that this is not an unexpected result, as hospitals and health systems are better able to negotiate with payers, and contracts can vary from facility to facility to better suit that hospital or system’s needs and wants. Private practices, however, often have to sign such agreements at “street rates,” she said.

“Whatever the offered fee schedule is, you usually accept and sign,” Madden said. “As a small practice, you don’t have a lot of negotiating power or leverage.”

Independent doctors can adopt strategies to improve their payouts, according to the article. A full understanding of the fee schedule is key, and physicians should code for everything that is applicable, even if they don’t think they’ll be reimbursed for all those options.

Another option is to join an independent physician association to increase bargaining power without sacrificing independence. This isn’t a solution for every region, however, according to the article. In Vermont, for instance, one payer dominates the market, so an IPA can’t use collective bargaining. As a result, payouts for independent docs in the state can be significantly lower, even 200% to 300% less than doctors employed by a hospital or health system.

The number of doctors employed by or practices owned by hospitals continues to grow. About 38% of U.S. doctors are employed at a hospital or health system, and a quarter of practices are owned by one. However, independent doctors who can make it work value the freedom to make their own choices.