Physician practice revenues rise under Affordable Care Act

Physician practices are enjoying a windfall from the Affordable Care Act (ACA), with many of them collecting a little more revenue since the healthcare reform law went into effect, according to a new issue brief from the Robert Wood Johnson Foundation (RWJF).

To conduct the study, RWJF surveyed the practices of more than 19,000 physicians who use practice software distributed by athenaHealth, which helped to underwrite the study.

The surprise twist: Doctors practicing in states that did not expand Medicaid eligibility under the ACA saw a bigger increase in revenues than those in non-expansion states. Doctors in non-expansion states saw their revenue rise 3.3 percent between 2013 and last year, according to the survey. By comparison, those in expansion states saw their revenue rise 3 percent.

The complexity of care being delivered may have had something to do with the gap. The relative value units (RVU) of care delivered by practices in non-expansion states grew by 1.6 percent, compared to 1.2 percent in non-expansion states, with collections per RVU rising 3 percent in non-expansion states versus 2.1 percent in expansion states.

Remittances from Medicaid--which tends to pay much lower rates than Medicare or commercial insurance--also seem to have played a role. Fifty-seven percent of the growth in collections for primary care patients between the ages of 41 and 64 came from commercial payers in non-expansion states, compared to 3.4 percent in expansion states, according to the data. In the expansion states, 46 percent of collections growth from that age group came from Medicaid.

For surgeons, the contrast was even starker: 51.1 percent of collections growth for the 41-64 age group came from commercial payers in expansion states; 4 percent of the growth in expansion states came from that category, while nearly 73 percent came from Medicaid.

Many providers already decline Medicaid, suggesting that some doctors may pass on the revenue opportunity altogether. Physicians are also nearly evenly divided in their opinions about the ACA, although the RWJF brief did not take their views into consideration.

But overall, RWJF concluded that the effects of the ACA have been relatively minimal on medical practices. 

"Despite the many disruptive changes associated with health reform, these data suggest that in terms of revenue growth for office-based physicians, so far it is largely a non-event," Kathy Hempstead, who directs coverage issues at the RWJF, said in a statement. "Moderate declines in visits were offset by small increases in intensity of treatment and allowed amounts, and while the source of new patients in expansion versus non-expansion states differs greatly, the end result for physicians appears to be quite similar."  

To learn more:
- read the RWJF issue brief (.pdf)