Managed care still hitting practices’ pocketbooks
Physician groups are discounting rates deeply to win managed care contracts, but they’re also doing a better job of collecting fees, according to a recently released survey by the Englewood, CO-based Medical Group Management Associa tion (MGMA).
The study, titled MGMA’s Cost Survey: 1997 Report Based on 1996 Data, found that group practices offered deep discounts off their standard fee schedules last year to get insurer business. Practices are having to cut their standard fee schedule by an average 28% to secure contracts.
"When a managed care insurer contracts with a group practice for a fee-for-service-based program, there’s commonly a prescribed fee schedule that the practice must use," says Dave Gans, MGMA’s director of survey operations. "The effect of this policy is a substantial discount from a service’s full charge."
But the survey isn’t all bad news for physicians. The report says fee-for-service (FFS) adjusted collection percentages the amount of billed charges collected by medical groups increased to 97% for multispecialty practices, continuing a 10-year growth trend. This represents the highest collection percentage recorded in the past 17 years of the cost survey, says Gans.
"One reason why this percentage continues to increase is the improvements practices are making in management information systems and automated billing systems," says Gans.
"Another factor is [that] managed care has forced medical group practices to develop systems which facilitate quick and full payment of contracts by the managed care organizations, such as preferred provider organizations. As a result, bad debt owed group practices is at an all-time low."
The study also looked at staffing ratio and revenue trends among group practices, reporting median rates and rates for top performers. (See related story on p. 189.)
[Editor’s note: For more information about the Cost Survey: 1997 Report Based on 1996 Data, call James W. Margolis, MPA, MGMA Survey Operations senior project manager, at (303) 397-7895. The survey report (Item #4984) is $200 for MGMA members, $250 for MGMA affiliates, and $300 for others, plus shipping and handling. To purchase, call the MGMA Service Center at (303) 397-7888.]
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