Physicians drive the health care economy through commercial insurance billing

Physicians drive the health care economy through their own work and follow-up tests and procedures for patients.

Physician bills for commercial health care insurers average $3.8 million annually, according to AMN Healthcare, which provides healthcare staffing and revenue cycle solutions.

The company’s Physician Billing Report 2023 examines claims filed by physicians in 18 specialties, along with claims filed by certified nurse practitioners (NPs) and registered nurse anesthesiologists (CRNAs).

By specialty, general surgeons had the highest average claims, reaching $11.66 million, while pediatricians had the lowest average of about $1.32 million.

Regardless of the dollar amount, the figure shows the economic role that physicians have in the healthcare economy as scores of doctors and other healthcare workers depend on them for their work.

“Billing amount is a key metric because it reveals how physicians generate services and revenue across the healthcare system, both directly and indirectly,” Linda Murphy, president of AMN Healthcare’s Revenue Cycle Solutions division, said in a news release.

“For example, a doctor may bill a patient for a diagnosis which then leads to hospitalization, X-rays, anesthesia, surgery, therapy, and other services,” says Murphy. “The care provided to patients may be provided by nurses, therapists, technicians, and many other types of healthcare professionals, but the process often begins with the doctor.”

Billing vs. collection

The report notes bill amounts don’t always reflect the dollars that end up back in the office, or in the doctor’s pocket. The payer “can choose to discount part of the doctor’s claim or refuse payment altogether,” according to AMN. Collection rates can vary widely among doctors based on specialization, the mix of payers from their practice, and other factors.

“However, given a hypothetical billing rate of 50 percent, the average collection amount for all providers in the report is $1.9 million,” says the news release.

In particular

AMN data shows “physicians practicing in the diagnostic, surgical, and internal medicine subspecialties typically generate higher average bills for commercial payers than primary care physicians.”

Specialists generate an average amount of over $4.65 million in bills sent to commercial payers, while primary care physicians generate an average of $1.77 million in bills. Specialists are paid more, so they usually make bigger claims than primary care doctors, according to AMN.

“However, the activities of primary care physicians can generate sizable ‘downstream revenue’ through hospital admissions, tests, and the care they order,” says the report.

Primary care physicians generate an average of more than $2.11 million per year in net annual revenue for their affiliated hospitals, close to the $2.44 million in net annual revenue that specialists generate, according to AMN, citing previous research.

Mixed application

Advanced practice professionals like CRNAs and NPs also generate income, according to the report. CRNA submitted an average of $1.75 million in claims to commercial payers, while NP billed an average of $777,393.

The figures underscore their economic importance, according to AMN. There are more than 49,000 CRNAs actively practicing in the United States, with independent practices in 19 states. NPs can practice independently in 26 states and the District of Columbia, with nearly 90% of them certified in primary care.

While their bills are lower, they are also paid less: the median annual starting salary is $211,000 for CRNAs, compared to $400,000 for anesthesiologists, and $153,000 for NPs, compared to $251,000 for family doctors. About 36,000 NPs complete academic programs each year, more than the number of doctors who complete their training each year, said the report.

“Advanced practice professionals are playing a larger role in healthcare delivery because of state policies that have expanded the scope of their practice and because of shortages of physicians,” says Murphy. “Their role as revenue generator has also expanded.”