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MGMA: Orthopedics may have hit financial plateau

Ambulatory Surgery Reimbursement Update, December 6, 2005

A new report from the Medical Group Management Association (MGMA) seems to indicate that orthopedic group practices have hit a "financial plateau," according to a statement issued by the MGMA.

The report, Cost Survey for Orthopedic Practices: 2005 Report Based on 2004 Data, suggests the increase of just 2.23% in net income from 2003 to 2004 is attributable to years of increased costs and revenues.

"Unfortunately, this apparently stable financial picture is likely to be short-lived," said William F. Jessee, MD, FACMPE, MGMA president and CEO, in the statement. "With group practices facing a 4.4% cut in Medicare physician payments on January 1, we expect that practice operating margins will decline significantly."

One area the association said affects net income is group practice size. Smaller practices having six or fewer full-time-equivalent (FTE) physicians saw a 2.61% decrease in net income over the year's period. Medium-sized practices (seven to 12 FTE physicians) saw a 7.88% increase, while larger practices (13 or more FTE physicians) saw a 4.83% increase in net income.

To view the MGMA's statement, click here.

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