1. For the following problems (as applicable), assume that the Medicare patient split of payments is as covered in the book. Assume that the participating/non-participating and maximum allowable charge are as covered in the book. Ignore the patient’s annual deductible. Use the following information to answer the question. Dr. Melissa Rose is trying to decide whether to be a Medicare-participating physician for the upcoming year. (Assume that her entire practice consists of Medicare patients or at least that her practice has slack capacity. Her Medicare patients do not displace non-Medicare patients.) Assume that her average charge is $120 (before Medicare’s limiting charge is applied). for which the average Medicare-approved amount is $100. If she decides to be a non- participating physician, she expects to accept assignment 80% of the time. For the unassigned patients assume that she would set her charges at 110% of the Medicare- approved fee for a nonparticipating physician. Assume that her Medicare patient volume is not reduced if she chooses not to participate nor if she does not accept assignment. (Ignore bad debt and any other factors not presented here.)
A. What will be Dr. Rose’s average reimbursement per visit if she chooses to be a Medicare- participating physician? (This is the total from both Medicare and the patients.)
B. What will be Dr. Rose’s average reimbursement per visit if she chooses to be a Medicare- participating physician? (This is the total from both Medicare and the patients.)
c. Based strictly on the information presented here (ignore bad debt, patient mix differences and other considerations not presented here), should she choose to be participating or non-participating if she wishes to maximize her total reimbursement for services?