Poor Payer Reimbursement and Practice Viability during COVID-19

By: Cameron Wood

Medical review by Patricia Salber MD, MBA

Physician practices should utilize their current time & resources to renegotiate payer reimbursement contracts to ensure viability during the age of COVID.

Poor reimbursement is threatening the viability of physician practices during the COVID-19 pandemic. Photo source: iStock

Most physicians who have been practicing for a few decades remember the days when private payer reimbursements dwarfed Medicare reimbursements. That dynamic has long since changed, starting with the 2008 recession. Further, reimbursements have been flat or have lost value from inflation while practice costs have seen double-digit increases.

Meanwhile, hospitals and insurance-owned health networks have seen reimbursements increase to 300% or more of Medicare in some cases. This is occurring even though it is not uncommon for some private practices to receive rates far below Medicare standards.

Ironically, even as COVID-19 disease is ravaging communities across the U.S., many physicians’ practices have seen their patient volumes decrease from 30% to up to 90% because of the pandemic. A significant number of them are closing their doors for now.

As states start to allow elective surgeries to resume in the coming months, some physician specialties will see increases in patient volume. However, I believe…