Affordable Care Act (ACA) and Physician Pay | RxEconsult Team | RxEconsult

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Effect of Affordable Care Act (ACA) on Physician Compensation and Wealth Category: Healthcare Administration by - July 26, 2013 | Views: 27697 | Likes: 1 | Comment: 2  

Affordable care Act and physician compensation

The Affordable Care Act (ACA) is transforming our healthcare system and directly or indirectly affects physician practice, demand for physicians, and physician pay. Experts forecast that 30 million new patients will enter the healthcare system as ACA fully takes effect. 

Carly Stewart, Medical Expert and MD at Money Crashers Personal Finance, comments about the potential effect of ACA on physician compensation and wealth.  

Which ACA provisions affect physician compensation and what are their effect?

The Affordable Care Act calls for a 10% bonus payment from Medicare for both primary care services and surgeons who practice in an area where there's a doctor shortage. Another provision calls for an increase in Medicaid reimbursements to equal that of Medicare payments for primary care services. On the other hand, the provision that allowed for the creation of the Independent Payment Advisory Board could mean pay cuts for doctors. One of the goals of the board is to reduce overall Medicare spending. It is unclear at this point how much weight these different factors will have and what will be the ultimate effect on physician pay. 

How should private practices prepare for increased demand for healthcare services due to ACA?

Private practices should consider adopting an electronic health record system to make their practice more efficient. The practice could also partner with other healthcare providers and hospitals to form an accountable care organization (ACO). A high-performing ACO that meets predetermined quality standards will receive a financial reward through the ACA.

Which provisions in ACA that will assist physicians with college loans?

The ACA provides more funding for the National Health Services Corps (NHSC), which provides, among other things, financial assistance for physicians who choose to work in an area that's short on doctors. For example, the Students to Service Loan Repayment Program was created by the ACA under NHSC, which allows students in their final year of medical school to receive as much as $120,000 in loan repayment assistance by agreeing to work in an under-served area for three years.

How will mandatory health insurance affect physician practice?

There are as many as 30 million new patients expected as mandatory health insurance takes effect. Physicians are most likely going to need to use mid-level providers more, such as nurse practitioners and physicians assistants, to deal with the increase in volume. This may mean less one-on-one time between the patient and the physician and a transition of the physicians to a more supervisory role.

How do ACOs and bundled payment structures affect physician compensation?

The current fee-for-service system will likely start to fade away in favor of a pay-for-performance model. This new model changes incentives for physicians. Under the pay-for-performance model, physicians are reimbursed for good patient outcomes and effective preventive care instead of being rewarded for seeing large volumes of patients and performing procedures. The details of this new payment structure and how it will be implemented effectively are yet to be resolved.


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