Clinicians Business Tip: Medicare, Medicaid or Not

Nurse Practitioner Business Owner; Barbara C. PhillipsRecently I’ve received several questions from nurse practitioners and other clinicians about Medicare and Medicaid. Specifically they are questioning if they should accept patients into their practices with these insurances and if they already do, should they consider opting out?

Not surprisingly, there is a lot of emotion behind these questions. Most NPs I’ve spoken with see patients with Medicare and Medicaid and will continue to do so, providing a needed service when so many of these patients are being turned away elsewhere.

Still, there are many reasons to ask the question “Is it feasible for you to continue seeing Medicare and/or Medicaid patients?” Obviously that question has to be answered by each individual provider and practice, but let’s look at just a few of the concerns clinicians have.

Reimbursement: First and foremost, the biggest issue I hear is reimbursement. Medicare and Medicaid are the two plans that reimburse providers the lowest levels. For NPs and PAs, reimbursement is lower than that of our physician colleagues.  For Medicare, that means a 15% discount. Medicaid reimbursement to NPs and PAs varies from state to state. And if the person is “dual eligible” (Medicare primary and Medicaid secondary), you may only see 80% (of the 85% allowed) as Medicaid may not pay the remaining 20% co-insurance. This lower reimbursement may not cover the cost of the care you provide, let alone the cost of the practice overhead.

Work Harder: Medicare and Medicaid patients often have multiple complex physical and emotional issues that are time consuming. Clinicians spend far more time working with these patients, which puts providers even further behind.  In addition, many clinicians feel it takes extraordinary effort to obtain the multiple prior authorizations required for appropriate treatment (a trend that is becoming increasingly more common with commercial payers as well).

For the practice billing Medicare and Medicaid, there is often more work involved with billing and accounts receivable. It often takes longer to get reimbursed, and as we have all experienced, payments can be delayed for any number of reasons (think annual SGR issues). Indeed, in at least one state, providers were issued IOU’s for Medicaid services rendered.

Constant threats: If the above are not enough, add to it the potential for audits and specific program requirements that threaten practices with loss of revenue and closure.  By now we’ve heard of the various programs that look for fraud and abuse (intentional or not) that penalize providers. While fraud is a huge problem needing to be addressed, busy providers who are trying to do their best often get caught in unintentional errors that end in costly fines. The way I see it, one big problem with the Medicare audits is that auditors are incentivized to find “fraud”. (Hmmm…sounds familiar does it not?).

Additionally, if certain programs are not adopted by certain dates, providers are penalized with lower reimbursements (i.e., eRx and EHR programs).

Obviously these are just a few of the issues. However, for some practice these are enough reasons to opt out of Medicare and Medicaid. And yet many of us want to provide services to those who need them.

Will these problems be fixed with health care reform next year? While there may be some relief for providers, it will not correct all problems.

Should you continue to see Medicare and Medicaid patients in your practice? The answer to this question is an individual one and may require your practice to be creative in order to provide these much needed services.

Does your practice see patients with Medicare and Medicaid coverage? Or have you opted out? What creative solutions do you have to share? Leave your thoughts below.


Barbara C Phillips, NP is a professional speaker, author, clinician and business owner who provides business education, resources and support to Nurse Practitioners, Physician Assistants and other Advance Practice Clinicians — both for the employed and self-employed clinician. Additional information about Ms. Phillips is available at


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  1. I see a lot of Medicaid and sliding fee patients who do take up more time and are very needy and often are abusive to the front desk staff and nurses. They usually change their tunes when they get to the providers because “we hold the keys to what they want and need.” Dealing with these issues take up way too much time in the FQHC that I work in but those patients are our bread and butter. We get paid a flat rate regardless of what type of visit (around 80.00) I’m sure that private offices only get about a third of that rate. With my experience with this population and having to work in regular setting, I doubt I would take very many from Medicaid.

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