Readers will recall I took the challenge of commenters and started the process of creating my own house call only Medicare Advantage practice. CMS has proposed changing the rules in 2019 so that any beneficiary can qualify for a Medicare Advantage house call, not just the infirm.
The idea is, with no office and little overhead beyond my malpractice insurance and a compliant cloud-based EHR, I could generate significant net revenue with a very small panel of patients.
I figured $360k/yr taking care of 300 patients.
Compare this to my average co-workers taking care of thousands of patients 50+ hours a week for the same money—if they’re lucky.
Having already created my business structure and revenue workflows, it was time to see what kind of contracts I could get—off the shelf, no negotiating (yet).
There are five Medicare Advantage insurers in my area, four national and one regional. I called their provider relation number and quickly received a sample contract from each one.
Wow.
All with about 50/50 risk share including a reasonable re-insurance rate and logistical help. That means, after a 15-17% management fee, the insurer and I split the what’s left over from my patient’s capitation payment after their care costs are deducted.
Better yet, they all evergreen (renew every year) automatically. They can’t be cancelled or adjusted unless I cancel them
Using my standard proforma, such contracts should bring in, an average of $155-$175 per member per month (pmpm) over three years if their average RAF (risk-coding) score is 1.2. I shouldn’t even need to use my hospital privileges to hammer on those costs—I can just free ride off of the hospital’s own ham-fisted utilization services.
And if my RAF is higher than 1.2 (and knowing what I know it will in fact be much higher), then I expect to earn more than $200 pmpm. But this performa is for an average doc, not a superstar like myself.
A good-sized, viable panel of 300 patients should gross north of $400k a year before expenses. I don’t know how many hours a week it’ll take to care for those 300 patients, but it’ll be a damn sight less than 50+.
If I wanted, I could use a variety of tactics I’ve written about to recruit patients with even higher capitation rates
Why are those contracts so much better than those my fellow employed physicians labor under?
Because the insurers know that small and independent clinicians are more motivated to do a better job. These insurers are also very leery of letting the local large systems dominate the market.
This is easier than I thought. Next, I’m going to negotiate some better terms (no secrets until those negotiations are complete, lots of insurers read this blog) and start looking into practice overhead such as malpractice insurance and EHR vendors.
Everything is heading to November fourth or so, when CMS issues its final rules on home visits in Medicare Advantage for 2019. If they put off the new home visit rules, this project is a no-go—taking care of only patients infirmed enough to qualify for a home visit under current rules is guaranteed to be a money loser.
I did them in private practice as a loss leader to generate good will and good word of mouth, but as a stand alone—not viable.
I’ll keep you up to date on my progress as events