Senior service: How your practice can thrive while treating older and sicker patients

Some physicians may view treating the elderly as more of a bloodletting than a business, especially considering the way Medicare reimbursements have declined in the last several years.

Senior patients generally soak up more office time and resources than younger patients. And physicians often fear that if there are too many Medicare beneficiaries in the patient pool, the inadequate revenue derived from treating them can slowly drain the practice's financial health as well. But some doctors see the increasing number of senior patients -- fueled by aging baby boomers -- as a boon. Some alter the scope of their practice to take advantage of favorable Medicare rules. Others find younger PPO patients to balance their senior populations, or they develop a niche that actually caters to seniors. Whatever the twist, some physicians have found success -- or at least managed to avoid failure -- in treating the elderly through a little creativity and ingenuity.

For all of its well-documented faults and inequities, the Medicare system can be advantageous for some physicians. Not every reimbursement rate is at a critical level, and not every interaction with the Centers for Medicare & Medicaid Services becomes a bureaucratic nightmare, physicians said.

Specialists, for example, enjoy a looser network in Medicare than if they participated in a traditional managed care plan. Medicare patients aren't restricted from seeing physicians the way they might be in an HMO setting.

In other words, a specialist who appeals to the Medicare consumer "can get more business," said Lisa Granville, MD, associate chair of the Dept. of Geriatrics at Florida State University College of Medicine in Tallahassee.

"If you treat a lot of people with diabetes and you're an endocrinologist, you can set up a clinic and access the older population," she said. "If you're an oncologist and you have to wait for a referral, that can be difficult."

Senior growth strategy

When you don't have to wait, however, you can bring the services to seniors, a strategy Atlanta Oncology Associates employs.

The 10-physician radiation oncology group, with seven locations in Georgia and Florida, is planning to build another facility with a local medical oncology group near Lake Oconee, Ga., outside Atlanta. The proposed location follows a well-established pattern: The doctors look for places high in retirees and low in medical services.

While the practice has a significant non-Medicare population, it still caters to its senior patients and actively places itself in close proximity to retirement communities. Medicare patients don't stir up the same sense of dread at Atlanta Oncology Associates as they might among some groups, because the reimbursement rates have not been too debilitating to radiation oncology just yet.

Medicare has taken "a little bit of a favorable position" on the ability to document equipment expenses in treating patients, said Dale L. McCord, MD, a radiation oncologist and president of Atlanta Oncology Associates. "On the professional side, [reimbursement] cuts have been significant, but on the technical side, for whatever reason -- and I don't want to jinx this -- cuts haven't been that bad," Dr. McCord said. "When you're talking about paying for the machine, the cuts are not as drastic."

Being paid for the facility is another strategy that has caught the attention of physicians. Doctors are investing in office renovations or building full-fledged ambulatory surgery centers to capture the extra facility fee from Medicare.

Southern Pain Specialists in Birmingham, Ala., is spending about $150,000 to convert its surgery suite, but it stands to earn significant revenue as a result. While physicians currently perform many fluoroscopically guided and interventional pain management procedures in their office, they face a considerable site-of-service differential because it's not an ambulatory service center, said Kenneth G. Varley, MD, a practice partner who specializes in interventional pain management.

For example, the practice receives about $68 from Medicare for a therapeutic injection for a major joint performed in the office. The same procedure done in a hospital or surgery center would generate about $48 for the physician, but the facility also would receive an additional $333, Dr. Varley said. "I don't mind playing on a level playing field, but when it's such a significant difference, it kind of pushes you to seek credentialing for an ASC," he said.

More billing options

But some physicians don't have the same options when it comes to expanding their revenue from seniors. Ophthalmologists, for example, derive almost two-thirds of their revenue from Medicare. While new technology and procedures such as refractive laser surgery help them to stay afloat, declining Medicare reimbursements are taking their toll, said H. Dunbar Hoskins Jr., MD, an ophthalmologist and executive vice president of the American Academy of Ophthalmology.

Primary care physicians especially feel the brunt of lower reimbursements, as they spend more time dealing with an elderly patient's chronic condition, only to be limited in what they bill Medicare.

But physicians are not as limited as they may think, said Rob Schreiber, MD, chair of the Dept. of Geriatrics for Lahey Clinic in Burlington, Mass.

Taking care to bill for the services you provide is the first step to improving your revenue, he said.

"One doctor took two hours to work on care coordination for a patient and was going to bill $40 for a regular office visit," Dr. Schreiber said. "You can use different codes and modifiers to enhance billing."

Coordinating care and reviewing care plans are services you can bill for, Dr. Schreiber said. A geriatrician who takes part in a multidisciplinary discussion about how to treat a patient and then reviews charts and reports later can earn more revenue, which offsets the time spent coordinating care.

Physicians with large senior patient populations also can supplement their revenue by taking on medical directorships at nursing homes or rehabilitation centers, Dr. Schreiber said.

"It's a supplement to what you're doing," he said. "There's still a significant number of doctors not taking advantage of these opportunities."

Dr. Schreiber chairs the professional management group of the American Geriatrics Society, a subcommittee charged with developing a theoretical toolbox for physicians to help them improve their financial position in caring for the elderly.

The committee is compiling successful tips and success stories from physicians who focus on seniors to help other physicians in their own practices. Ideas range from geriatric-friendly approaches to care that can improve efficiency in a practice to presenting geriatric service as one that can enhance the value of a group.

The geriatrics program at Lahey Clinic is expanding, but the reality is that many physician practices are struggling to maintain whatever elderly care programs they have. Some geriatricians have been forced to retire, and primary care physicians rely on younger patients to balance out the losses realized from treating seniors, Dr. Schreiber said.

But effective care of seniors, not closing some panels, is vital to improving a practice's financial health, said Rene Moret, president and CEO of North American Medical Management, an Ontario, Calif.-based company that owns and manages IPAs. Managed care plans for seniors, for example, provide groups opportunities to focus on quality of care, he said.

"If done correctly, managed care can be good for seniors," Moret said. "The way to reduce health care costs is to invest in a better quality system."

NAMM focuses on care management techniques and encourages physicians to check in regularly with patients to make sure they are following prescribed treatment techniques.

The theory is there's more waste with seniors in managed care plans than with traditional commercial patients. An organization that can avoid duplication of services and cut costs can enjoy those savings, Moret said.

"Through our management techniques, we can trim that waste," he said. "The better the group can treat seniors, the more profitable it will be.

"Most physicians in our IPAs want us to attract more senior members," he said.