Reimbursements in the orthopedic space have not kept up with rising inflation and operational costs, with surgeons, practices and organizations looking for changes.
If there are not significant changes and increases to reimbursements for orthopedic care, organizations may have to begin cutting access to services, which is not the goal for any practice.
Allison Farmer, CEO of Durham, N.C.-based EmergeOrtho, one of the largest orthopedic practices in the U.S., recently connected with Becker’s about how the company is dealing with stagnant and declining reimbursements, and what could happen if the trend continues.
Note: Responses were lightly edited for clarity and length.
Question: What big orthopedic trends are you keeping an eye on?
Allison Farmer: Top of mind for us at EmergeOrtho are the changes to the Medicare Physician Fee Schedule. That continuous year-over-year and decade-over-decade decline is really something that needs to be addressed in Washington. The sustainability compared to the growing Medicare population and certainly the burdens of the Medicare Advantage plans is something that needs to be looked at.
Q: At a large organization such as EmergeOrtho, how are you dealing with declining reimbursements?
AF: In the short term, you would normally lean on more traditional measures to offset a revenue reduction, however, with the inflationary environment right now, that’s not as successful as it has been in the years past. The decrease in reimbursements and the increase in inflation is kind of a perfect storm. Orthopedic practices have the same increased labor costs that everybody has in all industries. Other industries have been able to increase prices to raise their top line revenue to offset it and pass that on to the consumer.
Unfortunately, we’ve got decision makers in Washington doing the reverse, and they’re passing on a lower rate for us. We’re hopeful with some bills that are on the radar, but those bills do not even put a dent into the declining reimbursements that we’ve experienced.
Q: What is the solution for declining reimbursements to avoid decreased revenue and losing access to care?
We’ve got a great lobbyist who works at the state and federal level. We are also a member of The OrthoForum, and they have national advocacy that we participate in as well. EmergeOrtho is the one of largest orthopedic practices in the country. The last thing we want to do is restrict access. However, if this does not resolve, we may have some very hard decisions on restricting access to certain patient populations, and that is not where I want to be, or our physician leadership wants to be. Hopefully we can find some resolution before it gets to that point.
We are very proud of the access we provide. We have same day appointments. We have a network of urgent cares that are open seven days a week. We have online scheduling. We’re on call with dozens of hospitals. We feel like we do a great job of getting North Carolina the orthopedic care they need in a timely manner and the highest quality.
However, it’s also a priority for us to look at alternative payment methods. So with this, we are investing in direct pay from employers, as well as direct pay from patients. We’re trying to bring a solution to patients to pay us directly, without using their insurance benefits. That is a delicate long-term game because those payments don’t apply toward your deductible or your maximum.
North Carolina has a unique environment with its recent Medicaid expansion and current situation in the state legislature with our Medicaid funding. We’ve had to put in place more self pay options because of the barriers to patient care from the insurance industry.
