Dr. Melissa Rose is trying to decide whether to be a Medicare-participating physician for the upcoming year. 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 percent 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.)
What will be Dr. Rose’s average reimbursement per visit if she chooses not to be a Medicare-participating physician? (This is the total from both Medicare and the patients.)
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?