All Minutes Are Not Created Equal

(And now for something completely different:)

Way back in the olden days -- several months ago; before l'affaire de Flea -- we were talking about physician compensation; mostly in the context of Pay for Performance (P4P), but also in more general terms. The irrationality of physician payment for specific procedures and evaluation/management encounters ("cognitive services" or office visits) was contrasted with the fact that attorneys usually bill strictly by the clock.

Bearing in mind that dropping all my insurance contracts and going to a cash-only (well, checks and credit cards too) practice model is my someday-I'd-love-to dream, I began thinking about how I might charge for my services. I think some form of charging by the hour is definitely the way to go, so I tried to work out the nuts and bolts of how I'd manage to do it, what my "hourly rate" should be and so on.

That gave me a headache, so I looked at something else: how I'm getting paid now. For the record, whatever anyone says, we do in fact have price controls on medical fees in this country; it's called the Medicare Physician Fee Schedule, and the vast majority of private plans tie their fees to it in one way or another. I happen to be in an area dominated by 800 pound gorillas, so most of my private plans pay less than Medicare (as opposed to much of the rest of the country, where Medicare rates are bargain-basement.)

It turns out that this information is outrageously easy to access, so I did. If you look up 99201 to 99215 as your range of codes, you come up with each of the five E/M codes for new and established patient office visits in the Philadelphia metropolitan area.

At this point, let me explain again how time enters into the coding calculation. Although there are times associated with each of those 10 codes, you can only use them as the deciding factor in assigning a code when more than 50% of the face-to-face time is spent in counseling or case management. Still, in a sense, those times -- when combined with the fee schedule values -- can be used to show that Medicare values certain minutes more than others.

Here's what I figured out Medicare is paying on a minute-by-minute basis:

New Patient	MC Fee	$/min
first 10 minutes	$38.33	$3.83
next 10 minutes	$28.20	$2.82
next 10 minutes	$32.08	$3.21
next 15 minutes	$50.17	$3.34
next 15 minutes	$37.54	$2.50
Established Patient
first 5 minutes	$21.80	$4.36
next 5 minutes	$17.79	$3.56
next 5 minutes	$23.68	$4.74
next 10 minutes	$32.53	$3.25
next 15 minutes	$33.81	$2.25

It turns out that on a minute-by-minute basis, Medicare actually pays less for a new patient. The math works out this way because the time divisions for established patients are much shorter for the first three levels, and although the fee for a "New level 1" visit is higher than an "Established level 1," it isn't "higher enough" to offset the time factor. Isn't it interesting, though, that the longer you spend with a patient, the less you get paid on the margin. I hate to put it this way, but there you have yet another incentive -- numerical -- to limit your time with any given patient.

Just for the hell of it, let's look at how those numbers crunch into hourly rates:

New Patient	visits/hr	$/hr
10 minutes	6	$230
20 minutes	3	$200
30 minutes	2	$197
45 minutes	3/4	$198
60 minutes	1	$186
Established Patient
5 minutes	12	$262
10 minutes	6	$238
15 minutes	4	$253
25 minutes	about 4/10	$230
40 minutes	2/3	$194

(And realistically, who's going to squeeze twelve level 1 visits into an hour?) Keep in mind these are evaluation and management fees generally paid for primary care, "cognitive skills." That's your Family Practitioner or Internist sitting and talking to you, getting your complete medical history, examining you, deciding what's wrong or what testing needs to be done to figure out what's wrong, explaining it all to you, answering all your questions and making sure you understand it all.

There's also something called a "Consultation," which pays more. Consults are defined as an evaluation requested in writing by another physician. Plenty of specialists go out of their way to run a "Consultative practice only" (although for followups on the same patient they're supposed to use the E/M codes); much more lucrative that way.

Just try finding a lawyer -- highly skilled and in his prime -- willing to work for those prices!

(Anyone have any idea how to get rid of those large empty spaces before the tables?)