CMS Decreases Clinic Visit Payments to Hospital-Employed Physicians and Expands Decreases in Drug Payments 340B Cuts

The Centers for Medicare and Medicaid Services (CMS) has reimbursed hospital-employed physicians more than self-employed physicians. However, CMS is moving forward with plans to expand its site-neutral payment policy to clinic visits, a move that could save the agency hundreds of millions of dollars (1).

Clinic visits are the most common service billed to CMS. CMS estimates that it is now paying about $75 to $85 more on average for the same service in hospital outpatient settings compared to physician offices. Beneficiaries are responsible for 20% of that increased cost. The payment change is projected to save Medicare $610 million and patients about $150 million. Higher CMS payments to hospital-employed physicians have also been have associated with higher commercial prices and spending for outpatient care which could save CMS even more money (2).

However, CMS abandoned its 2016 plan to expand a site-neutral rule. That regulation would have paid hospital off-campus facilities less than hospital-based outpatient departments if they started billing Medicare after Nov. 2, 2015. Following pushback from the American Hospital Association and others, the agency said it decided to not finalize that provision.

CMS’ 340B Drug Discount Program requires drug manufacturers to provide outpatient drugs to eligible hospital-based departments at significantly reduced prices. CMS will expand last year's cuts to 340B discounts given to outpatient facilities. Last year, the agency cut 340B drug payments by $1.6 billion, or 22.5% less than the average sales price. CMS is expanding the 340B cut to off-campus provider-based departments to prevent hospitals from moving their drug administration services for 340B-acquired drugs to an off-campus facility to receive a higher payment.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Dickson V. CMS slashes clinic visit payments, expands 340B cuts. Modern Healthcare. November 2, 2018. Available at: https://www.modernhealthcare.com/article/20181102/NEWS/181109978 (accessed 11/2/18).
2. Neprash HT, Chernew ME, Hicks AL, Gibson T, McWilliams JM. Association of financial integration between physicians and hospitals with commercial health care prices. JAMA Intern Med. 2015 Dec;175(12):1932-9. [CrossRef] [PubMed]

Cite as: Robbins RA. CMS decreases clinic visit payments to hospital-employed physicians and expands decreases in drug payments 340b cuts. Southwest J Pulm Crit Care. 2018;17(5):136. doi: https://doi.org/10.13175/swjpcc115-18 PDF 

Salary Surveys Report Declines in Pulmonologist, Allergist and Nurse Incomes

The 2016 Medscape Physician Compensation Report relates that orthopedic surgeons and cardiologists earn on average the most of those physicians surveyed ($443,000 and $410,000 annually) (1). Pulmonologists and critical care physicians fell in the middle of the spectrum of physician incomes ($281,000 and $306,000 respectively). Allergists were at the lower end ($205,000). Physicians in each category earned more or the same in 2016 than in 2015 except pulmonologists and allergists which were down compared to 2015 incomes of $296,000 ($15,000 decline) and $243,000 ($38,000 decline). As in years past, the survey is nonscientific. Physicians were asked to provide their annual compensation for patient care including salary, bonus, and profit sharing if employed, earnings after taxes, and deductible business expenses (but before income tax) if in private practice. 

The reason for the decrease is unclear but self-employed physicians (i.e., private practice) earned substantially more than employed physicians ($64,000 more for men, $44,000 more for women) (1). If more pulmonary physicians are becoming employed, this could be one reason for the decline in income. In 2016, the Medscape survey reported 59% of men and 72% of women were employed (1).

Nurses also made less on average in 2016. Incomes decreased from $79,000 annually for RNs in 2015 to $78,000 in 2016 (2). LPNs had a more substantial decrease from $46,000 to $43,000. RN’s not employed full time made the same hourly wage as those employed full time ($37/hour) and LPNs not employed full time actually made more per hour than those employed full time ($23 compared to $21/hour). The two most common reasons that nurses gave for decreased income was switching jobs or working less overtime.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Peckham C.  Medscape Physician Compensation Report 2016. Medscape. April 1, 2016. Available at: http://www.medscape.com/features/slideshow/compensation/2016/public/overview#page=1 (accessed 2/9/17).
2. Yox SB, Stokowski LA, McBride M, Berry E.  Medscape RN/LPN Salary Report 2016. Medscape. November 2, 2016. Available at: http://www.medscape.com/features/slideshow/nurse-salary-report-2016?src=WNL_specrep_nursesalary_170209_MSCPEDIT_usmds&uac=9273DT&impID=1286926&faf=1#page=1 (accessed 2/9/17).

Cite as: Robbins RA. Salary surveys report declines in pulmonologist, allergist and nurse incomes. Southwest J Pulm Crit Care. 2017;14(2):68. doi: https://doi.org/10.13175/swjpcc018-17 PDF