Physician Practice Revenue Cut in Half Due to COVID-19 Crisis
On average, physician practices revenue declined 55 percent since the beginning of the COVID-19 crisis, while patient volume fell 60%, MGMA reports.
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By - An overwhelming majority (97 percent) of physician practices have experienced a negative financial impact directly or indirectly related to COVID-19, with most seeing physician practice revenue and patient volume declining, a new survey reveals.
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The survey released Tuesday by the Medical Group Management Association (MGMA) found that physician practice revenue has decreased by 55 percent on average since the beginning of the COVID-19 crisis, while patient volume has fallen by an average of 60 percent.
Over 720 MGMA members responded to the survey, of which 75 percent belonged to independent medical practices and employed less than 50 full-time equivalent physicians.
“Our new data reflect a shocking decline in the number of patients seeking non-COVID-19 medical care during this crisis,” Anders Gilberg, MGMA’s senior vice president of government affairs, stated in an announcement emailed to RevCycleIntelligence. “Patients are foregoing necessary preventive and even acute care out of fear of exposure. Medical practices are struggling to keep their doors open as volume collapses.”
With such significant revenue and volume drops, nearly half (48 percent) of physician practices have had to furlough staff and 22 percent have been forced to permanently lay off some employees, the survey found.
MGMA anticipates both of the percentages to increase over the next month as the number of confirmed COVID-19 cases continues to rise in the US. Specifically, the association projects lay-offs to increase to 36 percent of physician practices and furloughs to increase to 60 percent.
“All doctors and administrative staff have deferred their salaries during this time,” a small independent practice in Mississippi specializing in pain management noted in response to the survey. “We have laid off most of our staff except 5 people.”
Other respondents also pointed out that, in addition to decreases in revenue and volume, physician practices are also experiencing higher expenses for items and supplies needed for COVID-19.
“In addition to the decrease in volume and revenue, there are increases in expenses related to COVID, such as technology to support telehealth needs and remote providers/staff and PPE (i.e. procedure masks are now $1 or more per mask, and we are using large quantities when we rarely used to use any),” an independent rheumatology practice in Texas stated in the survey.
Supply shortages are becoming a new normal for physician practices. Over half (58 percent) of primary care clinicians in a recent survey conducted by the Primary Care Collaborative in partnership with the Larry A. Green Center said their practices have resorted to using homemade and used personal protective equipment.
The survey of primary care clinicians also underscored the financial uncertainty facing physician practices. About 43 percent of respondents revealed “tremendous financial strains” that could lead to practice closures.
The federal government has attempted to support physician practices during the unprecedented public health crisis. As part of the Coronavirus Aid, Relief and Economic Security (CARES) Act signed by President Trump on March 27, physician practices can apply for forgivable small business loans and payroll assistance to keep staff on board and doors open.
CMS is also offering to advance Medicare reimbursement to physicians during the crisis. The agency has also relaxed telehealth requirements to enable more physician practices to engage in virtual visits and get paid for the services.
However, physician practices continue to report financial challenges related to COVID-19. And practices are likely to face a new wave of issues once the number of coronavirus cases starts to decline, MGMA’s Gilberg stated.
“The nation faces a second wave access crisis when the pent up demand for non-COVID-19 care is released and the rest of our healthcare system is off-line as a result of the pandemic,” he said.
