A 4-step guide to identify Medicare services that lose money

Why This Topic Matters

Understanding which services lose money helps practices make informed business decisions about service lines, payer participation, and resource allocation while avoiding compliance problems.

Article Sections

1. Introduction

   The opening frames the reimbursement uncertainty facing practices and introduces the need for a systematic review of Medicare-related service profitability.

2. 1. Divide revenue into multiple ‘profit centers.'

   This section discusses separating revenue into service- and location-based categories to identify where costs and reimbursement may not align.

3. 2. Compare Medicare payments to private payments.

   This section focuses on comparing payer reimbursement at the code level across Medicare and private insurers to identify meaningful differences.

4. 3. Compare Medicare payments to your costs.

   This section explains a method for estimating practice cost per service using overall overhead and RVU-based calculations, then comparing those estimates to Medicare payment levels.

5. 4. Make the final comparison.

   This section covers the final cross-payer comparison and includes a compliance reminder related to offering services to Medicare beneficiaries versus privately insured patients.