Autumn Road Family Practice in Little Rock, Arkansas, thought it had a plan in place to weather the coronavirus pandemic.
The six-provider practice, which has been in business for half a century serving its close-knit community, began to gather personal protective equipment for workers and ask patients screening questions through its call center and front desk. Autumn Road had a partner meeting March 12, a Thursday, to update its response to the budding coronavirus outbreak in Little Rock, including the first patient testing positive in its offices.
But things changed dramatically in a matter of days.
“We came in Monday morning and it was like a whole new world,” Tabitha Childers, Autumn Road’s clinic administrator, told Healthcare Dive. “All of a sudden our patients are canceling their appointments … About Wednesday we just realized that the finances are quickly failing. Thursday we made a list of what we could cut.”
Autumn Road made the hard decision late last week to lay off 12 members of its staff.
“It was devastating,” Childers said. “If you had told me two weeks prior we’d be doing something like that, I would have called you a liar.”
Thousands of frontline primary care practices, already strapped for cash, are facing these wrenching decisions as part of a new financial crisis generated by the novel coronavirus advancing across the U.S. — with little chance of direct help from Congress, as the latest Senate stimulus package passed late Wednesday doesn’t benchmark any funds for independent practices.
“We are seeing huge cuts in our revenue right now,” Beverly Jordan, a physician at small rural practice Professional Medical Associates in Enterprise, Alabama, told Healthcare Dive. “We are working really hard to keep our employees employed. We are working really hard to keep our doors open. But we are having to monitor that bottom line.”
Independent practices, small businesses that have resisted selling to hospitals despite years of rampant provider consolidation, have already weathered various reimbursement cuts, disadvantageous Medicare facility fees, costly EHR implementations and more, often leaving them with razor-thin margins
More than half of physicians — 54% in 2018 — work in independent practices. But that number is quickly shrinking as health systems continue to gobble up the private practices, which tend to be much smaller than hospital-owned practices, according to the American Medical Association.
Now, practices nationwide worry COVID-19 could push them further into the minority under strain from a dramatic reduction in patient volume as Americans, worried about the virus that’s infected almost 70,000 people in the U.S. and killed more than 1,000, eschew in-office visits.
“It is really financially a crisis for us, as it is for other small businesses,” Jordan said. Before the outbreak, her 25-year-old practice’s no-show rate was less than 5%. Now, it’s up to 75%.
Autumn Road usually treats 120 patients a day on average. Tuesday, that was almost halved to 72 patients.
Family practice Vickery Family Medicine in Asheville, North Carolina, has also seen its patient visits slashed in half — cutting its revenue in half as well, even with virtual visits making up some of the volume, practice owner and physician Gus Vickery told Healthcare Dive.
“This is a dire situation,” Vickery said. “It’s not like we can operate off a shoestring budget and do healthcare. I will stay positive, but if we don’t get relief in two to three weeks, there will be physicians laid off and not working.”
Vickery projects that, without some form of government intervention, his 15-year-old independent practice will go out of business in four to six weeks.
‘You don’t know until you submit the claim’
As part of its response to the growing pandemic, the Trump administration has eased regulatory barriers to use of virtual care, allowing doctors to more easily check up on patients via telephone or video call, limiting potential exposure to COVID-19.
Earlier this month, CMS temporarily expanded traditional Medicare to reimburse telehealth visits at the same rate as in-office visits, and some private payers have increased their reimbursement for virtual care, too.
As a result, many primary care practices are trying to figure out virtual care, many for the first time.
“A lot of our colleagues have dabbled in it — they haven’t put the financial capital into hardwiring it into their practice. And now they’re in an intolerable situation where they have to make this thing happen yesterday,” Gary LeRoy, president of the American Academy of Family Physicians, told Healthcare Dive.
Telehealth allows practices to make up a portion of lost visits. But it’s a small portion: Health insurers pay roughly 20% to 50% less for virtual care visits, and some still don’t cover telemedicine at all. Additionally, independent practices have to cover the implementation costs, which can be tens of thousands of dollars depending on the vendor, the size of the practice, its EHR and other factors.
“The reduction in visit volume has blown a hole in practice finances,” Dan Bowles, SVP of growth and network operations at accountable care organization Aledade, told Healthcare Dive. “Telehealth is helping to fill the hole, but it’s not enough.”
Professional Medical Associates didn’t have telehealth prior to the outbreak, Jordan said. The practice decided to go with telehealth vendor Doxy.me, which charges $50 a month per doctor, nurse or physician assistant that uses the system, and had to purchase all the necessary equipment, like webcams for its doctors and nurses, at between $75 and $100 each.
“It’s just really a bad time to suddenly have to do this,” Jordan said — especially as these practices, new to virtual care, aren’t sure how much money they’ll be reimbursed.
Autumn Road wanted to wait to institute telehealth until it heard back from payers about reimbursement rates, but realized it couldn’t delay as COVID-19 cases ticked up, according to Childers. Some of Autumn Road’s payers have offered to reimburse telehealth visits as an in-office visit, which should help the practice. “But you don’t know until you submit the claim,” Childers said.
Need to invest in primary care
U.S. hospitals have warned that, without financial aid, they will be unable to meet their payrolls, forcing some to shutter their doors in a matter of weeks, partially because they’ve had to dial back on lucrative elective procedures. The American Hospital Association asked for and received more than $100 billion for hospitals and Medicare payment hikes in a stimulus bill the Senate passed Wednesday.
That legislation now heads to the House, which is slated to vote Friday. But in its current form, the $2 trillion package doesn’t set aside any funding for primary care practices, which many view as the first line of defense against the disease.
“Some of the stimulus work is going to be helpful to the system overall, but frankly — nothing against hospitals — but if you want to help hospitals you should be investing in primary care in their communities. If a practice closes, that’s 20, 30, 40 more ER visits for them to deal with,” Bowles said.
Independent practices with low financial reserves can apply for small business loans. The Senate stimulus package set aside more than $350 billion for the SBAs, which could give short-term relief to struggling primary care practices, though the terms of the loans are currently unclear.
Small providers will also benefit from other economic relief measures, such as direct payments to individuals and a short-term suspension of student loans.
But not directing money to primary care practices feels like “cutting off your nose to spite your face,” Childers said.
There’s much more the Trump administration could do, independent physicians say, like expanding telehealth reimbursement to include non-video phone calls with patients, invoking the Defense Production Act to expand manufacturing of PPE and pay a portion of anticipated shared savings checks to providers in the Medicare Shared Savings Program now.
“We operate on a month-to-month basis,” Jordan said. “Although I’d certainly like to think in no way we’re going to go out of business, we can only sustain this for a few weeks before cutting personnel.”
Primary care practices warn that if they’re allowed to close, that would lower the nation’s capacity to detect outbreaks and raise the burden on hospitals while restricting access for patients struggling with non-COVID-19 conditions and other day-to-day ailments.
“What about us? It’s kind of like the little Whos down in Whoville, shouting ‘We are here! We are here!,” AAFP’s LeRoy said. “We are the front line. We are offense and defense for this thing. And we need to survive.”
As for Autumn Road, the first round of layoffs may not be the last as the practice, now briefly stabilized, looks toward a future made uncertain by flagging finances.
“We do hope that this helps but the figures that I’m looking at right now — we’ve got about a $40,000 gap for March,” Childers said. “And that’s just for March. I’m scared to see what April and May look like.”