Telehealth is helping restore some revenue, but reimbursement varies by medium, state and payer. Some practices have struggled to make the sudden transition with outdated equipment.
Dr. Beverly Jordan, a family physician in Enterprise, Ala., was displayed as a blurry, amorphous figure as she pleaded virtually with congressional aides for more funds because her practice doesn’t have the cash to buy new video equipment.
“We had to make a choice to buy PPE instead of a new camera,” Jordan said.
The federal government has sent some assistance, but primary-care providers say it may not be enough to allow them to stay open.
Most practices have gotten some grant money from the $50 billion HHS distributed from the Coronavirus Aid, Relief, and Economic Security Act’s provider relief fund. But the funding allocation is based on the “net patient revenue” metric in cost reports, which experts say favors specialists who demand higher reimbursement rates than primary-care providers.
The figure is also reported in CMS cost reports that primary-care practices don’t file, so practices had to jump through an additional hoop to ensure they get their full share of funding and some distributions were sent out before physicians had submitted their data.
HHS could have divvied up the money generally by health expenditures, said King & Spalding partner Christopher Kenny, but that still leaves questions about how rolling distributions will be conducted for physician practices moving forward.
“How do you know that physicians are going to be getting their appropriate amount, if proportion isn’t possible to do as accurately as if they had everyone’s data?” Kenny said.
Some practices also took advantage of Medicare advance payments to help them maintain cash flow, but the loans must be repaid. CMS begins recouping the funds after four months by garnishing Medicare reimbursement. If the loan isn’t fully repaid in seven months, then the loans begin to accrue interest far higher than market rates.
Several provider groups have asked lawmakers to extend the repayment timeline or forgive the loans, since they worry volume won’t return to normal levels for several months.
CMS suddenly suspended the Medicare advance payment program April 16, though it is still accepting applications for Medicare Part A providers. The agency said it distributed more than $40 billion to nearly 24,000 Medicare Part B providers and suppliers, and was pulling back on the program because “of historical direct payments made available” through the CARES Act. “Significant additional funding will continue to be available to hospitals and other healthcare providers through other programs,” the agency noted in a fact sheet.
American Academy of Family Physicians Senior Vice President Shawn Martin said it’s possible providers in the most dire straits have already applied for the program, but he was confused why CMS would abruptly cut off the loan program as the situation remains fluid.
“This isn’t new money. These are monies that likely would be spent anyway, they are just being spent in advance of care delivery. The cash flow mechanism changes, but the total outlay likely doesn’t,” Martin said.
Primary-care advocates last week pitched congressional aides for several policies to help practices survive.
HHS has yet to announce how $75 billion in newly authorized funding will be allocated, and Martin suggested $20 billion be set aside for physician practices. He also called for lawmakers to codify the Medicare advance payment program and extend repayment deadlines, designate some small-business loans for small physician practices, and continue increased Medicare reimbursement for telehealth services.
“This pandemic has been really catastrophic to primary care across the country,” said Dr. Donald Rebhun, a regional medical director at HealthCare Partners, a large healthcare group including primary-care physicians in Southern California that joined OptumCare in 2019. “The government has done great getting out hundreds of billions of dollars, but CMS has got to focus on primary care.”
Primary-care advocates are also pushing to allow CMS to pay family medicine practices in monthly, per-patient installments. Direct primary-care practices that contract with employers and are paid on a per-employee basis were much more resilient going into the COVID-19 pandemic, said Jay Keese, executive director of the Direct Primary Care Coalition. Though the practices are feeling the pinch of a cratering economy, their revenue model is more sustainable.
“Direct primary-care practices will come out looking good, which may help bring the rest of the world into a model where primary-care providers are paid outside of fee-for-service reimbursement,” Keese said.
If traditional primary-care practices run out of cash, some physicians may choose to retire early, and others may look to consolidate with another group or practice. Rebhun said that if primary-care practices had previously been approached by a larger group or a health system, they may reconsider an offer.
Kaufman said he has heard that some smaller primary-care practices have started talking to larger medical groups and hospitals about their options.
That could lead to higher costs for patients. Studies have shown that costs and access to care can suffer with vertical consolidation.
One study of hospital acquisitions of physician practices published in the Journal of Health Economics in 2018 found that hospital acquisitions of primary-care practices increased monthly medical spending by 4.9% for commercially insured patients.
Primary-care access lowers healthcare costs, so ensuring practices survive the pandemic is a long-term investment, Strongwater argued.
“It’s an investment in the future of healthcare in our country,” he said.