Payers making physician-owned practices 'unworkable,' AHA says

Administrative burdens such as prior authorization are forcing increasing numbers of physician-owned practices to seek alternative owners, the American Hospital Association said in a June report.

An "overwhelming majority" of 94 percent of physicians say it has become more financially and administratively difficult to operate a practice independently, the AHA said. Eighty-one percent of physicians said commercial insurer policies and practices have impaired their ability to perform medical duties.

"The truth is that commercial insurer policies such as prior authorization are creating unworkable environments, forcing physicians to prioritize administrative duties over caring for patients," the AHA said. "The result is increased burnout among physicians with no signs of stopping anytime soon."

Commercial insurers such as Blue Cross Blue Shield Association have an alternative viewpoint, blaming hospital systems for raising prices for patients by an average of 14 percent when they take over such physician-owned practices.

"Everyone deserves access to high-quality, affordable health care," David Merritt, BCBSA senior vice president of policy and advocacy, wrote in a letter ahead of a senate finance committee hearing on healthcare consolidation at which both his organization and the AHA testified. "Unfortunately, the growing trend of big hospitals acquiring independent physician practices is making health care less affordable for too many Americans."

Increasing administrative costs are also placing a burden on physician-owned practices, causing them to seek to be acquired. Such costs include maintaining electronic health records and patient portals, billing and claims submissions and hiring staff to deal with prior authorization, according to the AHA.

Commercial insurers buying physician practices are subject to fewer regulatory requirements than hospitals, the AHA said.

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