Recognizing The Realities About Surgery Reimbursement And Having A Diverse Practice

About six weeks ago, I had a podiatric practice consultant evaluate my practice. I learned several things about my practice and a few about myself from the endeavor. Many of the revelations about my practice were eye-opening.

My private practice is in Central Indiana. I have three offices with seven full-time employees (two front desk staff, three medical assistants and an office manager, and my mother serves as my practice manager). My father-in-law, Anthony Jagger, DPM, works a couple of half-days a month for me and I currently have a fellow and a preceptor (an unmatched 2017 graduate looking to match for a residency in 2018).

I have a fairly busy practice that is broad in scope. I get bored doing too much of any one thing. I do mostly reconstructive surgery, averaging five to 10 operations per week. I do all types of surgery from ankles to toes.

One of the most striking findings from the consultation was that my average surgery reimbursement for all procedures and all insurance carriers is $678. Yikes! I accept Indiana Medicaid, which skews the number somewhat. My ownership in two surgery centers helps to offset this shockingly low amount. I am a podiatric physician but I am also a small business owner. The math has to work to pay my employees and keep the doors open.

My mentor liked to say he made his money in the operating room. Nothing could be further from the truth in today’s healthcare market.

This process put into perspective the current podiatric post-graduate education process. The 4-4-3 model (four years of undergraduate school, four years of podiatric medical school, three years of residency) is critical to the future of podiatric medicine. The disconnect, in my opinion, is taking three-year residents trained in podiatric medicine and surgery, and expecting them to know how to run a profitable practice while averaging $678 per surgery. Graduating residents come out surgically oriented. Unfortunately, most have little knowledge or experience with office-based practice management and the reality of income generation within an office-based practice.

Organizations such as the American Podiatric Medical Association (APMA) (apma.org) and the American Association of Podiatric Practice Management (AAPPM) (aappm.org) are valuable resources for office-based practice management. Although surgery is exciting and pushed to the forefront of the profession, financial viability mandates a well-rounded approach to practice. Graduating residents may be focused on performing surgery but the reality of reimbursement and income generation forces the focus on providing a variety of foot and ankle services.

Residency directors should encourage residents to become members of the APMA (it’s free for residents) and AAPPM (it’s free for APMA member residents). This should be part of a comprehensive training program. The office-based practice management resources and other benefits (Residency Education Resource Center at redrc.org and the Annual Scientific Meeting from APMA; Fall and Summer Conferences and the Resident Webinar Series from AAPPM) combined with the residency training structure provide knowledge, experience and a network for successful practice despite receiving $678 on average per surgery.

Practice paradigms vary based on the pathology seen and not just reimbursement considerations. Declining surgical reimbursements are nothing new. The reality of today’s healthcare market is a heel pain patient is more profitable with substantially lower risk than a bunion surgery patient. The most productive procedure based on reimbursement and time for podiatric physicians is undoubtedly a nail matrixectomy. The recipe for success is a balance between a surgical-based practice and an office-based practice that maximizes the podiatric physician’s productivity while putting the patient first.