New RVUs require new thinking for some groups

Best practices set operational benchmarks

The new practice expense reimbursement rules that take effect Jan. 1 deal a hard blow to particular specialties of medicine and practices that perform a large percentage of their services off-site. (See story, p. 185, for more information.)

"How hard you get hit by the changes in the physician fee schedule all depends on what specialty you are in and the mix of services your office typically provides," says Carl Cunningham, a former practice administrator and now internal managed care consultant for the American College of Physicians-Society of Internal Medicine in Washington, DC.

Groups taking a 15% to 20% cut in Medicare payments over four years, combined with pressure from commercial managed care plans, are definitely going to have to sit down and think hard about how they can run their practices more efficiently, Cunningham says.

He puts it this way: "Your strategic choices are really few. Do we continue in this specialty, and if so, how can we cut costs? Or do we move on and try to reengineer our practice and patient base?"

Cunningham says practices might want to consider these cost-cutting suggestions:

Cutting staff. No one likes to fire someone, but surgeons, especially, might have to cut back on assistants they can do longer afford under the new practice expense rules.

Share expenses. Situations where you share office space and staff may be worth looking at.

Buy more productive equipment. You might have to spend some money to save money over the long run by investing in more productive medical equipment to lower per-patient costs.