Considerations when limiting or reducing Medicare patients in a physician practice

Many physician practices are beginning to reduce and limit the number of new Medicare patients they see in the office. Here are some pointers in case you are thinking about this kind of action:

a. Pay attention to the socio-economic characteristics of the patients being limited or reduced.  Do not create the appearance or reality of “red-lining” or other prohibited discriminatory conduct.  Defending the appearance of it, even if successful, will be costly and damaging to the practice’s reputation;

b. Pay attention to the applicable state laws related to “abandonment” and how patients can be excused from the practice.  Most states require advance notice and some sort of courtesy list of potential qualified alternative providers.  In addition, patients under active treatment for “live-threatening” or other significant medical problems may be further protected.  The State Medical Society usually has the information readily available;

c. Remember that “Opting Out” of the Medicare program is a specific, formal process that is irrevocable for two years.  A careful analysis and pro forma are strongly recommended, as well as interviews with a representative number of the practice’s current and/or prospective patients unless the Medicare percentage of the practice is de minimus;

d. Gradually scale back by limiting appointments (“no more than x or xx Medicare appointments per [day] [week]”), closing the practice to new Medicare patients (this is becoming very common), reducing by attrition (no new Medicare patients and no replacements), or limiting by disease/problem (no diabetics, only diabetics, etc.);

e. Keep records of the “before” results and the “during” and “after” results to verify that the desired effect(s) were achieved.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.