Pediatricians Are Being Left Behind As Costs Increase

Armen Hareyan's picture

Commercial insurance reimbursements for physician office visits have remained largely unchanged since 2001, resulting in rates that are increasingly lower than those set by Medicare, according to data compiled from practice records by Allied Pediatrics of New York, PLLC. The data are based on the average reimbursement rates from ten New York area health plans for the E&M Service Codes 99212-99215.

For example, Medicare has increased reimbursement for the E&M Service Code 99213 (an office visit of moderate time and complexity) from $59 in 2001 to $70 today, an increase of almost 18 percent. However, the average reimbursement rate from New York area health plans for the same service code has remained virtually flat, from $49 in 2001 to $50 today. Medicare reimburses physicians almost 15 percent more than it did in 2001 for the more complex office visit, code 99214 (from $92 in 2001 to $105 today), yet reimbursement from the commercial insurance carriers for the same code during this period has actually fallen 1.5 percent, from $65 to $64. For the most complicated visit, code 99215, Medicare reimbursement has increased five percent since 2001, while commercial rates have fallen by four percent.


Pediatricians are especially hard hit by this trend since they must rely entirely on commercial insurers to provide compensation for the general office visits that make up the bulk of their practices. Inadequate reimbursement for the administration of childhood vaccinations offers a striking example of the challenges faced by pediatricians today. New and more effective vaccines have been introduced in the past decade, yet there is often a lag time before private insurers begin to pay for them. Moreover, commercial insurers often reimburse at a rate lower than the actual cost of the vaccine, forcing pediatricians to take a loss in order to deliver the best care.

"In some cases, the reimbursement I receive for an immunization has been more than 20 percent below the wholesale cost of the vaccine, and this doesn't take into consideration the administrative, stocking and other costs associated with vaccines," said Dr. Gary Mirkin of MDs4Kids in Great Neck, NY, and CEO of Allied Pediatrics of New York. "I've been forced into a role as an underfinanced public health agency as the health plans, in effect, take advantage of my dedication to my patients."

The disparity is forcing pediatricians out of business and may be prompting the next generation of physicians to choose other specialties. "I love caring for children; it's the best job in the world. I don't want to see our best doctors shying away from pediatrics because they know that they can make a better living in almost any other specialty," said Anthony Battista, M.D., of Pediatric Associates of Long Island in Mineola, NY, and Immediate Past President of New York Chapter 2 of the American Academy of Pediatrics. "This is an issue that is a concern for all of the pediatricians on Long Island."

"Stagnant reimbursement rates coupled with rising malpractice insurance, costly vaccines and the expenses of running a business have pushed many pediatricians to the breaking point," said Stephen Parles, M.D. of Smithtown Pediatric Group, P.C. in Smithtown, NY. "My patients are paying premium prices for their health insurance coverage, and I want to ensure that they will receive the very best care possible."