According to various news outlets, physicians at the University of California student health centers (as many as 150 physicians in all) went on strike this week in protest of what they believe are unfair labor practices by the University. These physicians are members of the Union of American Physicians and Dentists. The protest stems from contract negotiations between the Union and the University which have been ongoing for many months. While this is only the first time in more than 25 years that physicians in the United States have gone on strike, with more and more physicians becoming employees of large health systems and insurance companies, this strike could be a sign of things to come in the not too distant future.
The Centers for Medicare and Medicaid Services (CMS) announced today that it intends to adopt regulations modifying the Medicare Electronic Health Record (EH R) Meaningful Use Program requirements as early as the Spring of 2015. According to the announcement, CMS is considering:
- Realigning hospital EHR reporting periods to the calendar year to allow eligible hospitals more time to incorporate 2014 Edition software into their workflows and to better align with other CMS quality programs.
- Modifying other aspects of the program to match long-term goals, reduce complexity, and lessen providers’ reporting burdens.
- Shortening the EHR reporting period in 2015 to 90 days to accommodate these changes.
The announcement also clarifies that the proposed new rules are in addition to and would not replace the “Stage 3″ proposed rule expected to be adopted in final in March 2015.
Given the complexities of the Program and the difficulties providers have experienced in implementing and complying with the requirements to date, physicians and providers should carefully monitor these regulatory developments and ensure that their systems are capable of meeting the modified requirements.
Yesterday the Secretary of the Department of Health and Human Services (HHS) formally announced HHS’ intention to shift 90% of all traditional Medicare payments from fee-for-service (FFS) to quality or value-based payments by 2018. The secretary announced that HHS’ goal is to have 30% of traditional FFS payments tied to quality or value in 2016, increasing to 50% by 2018, through alternative payment models such as reimbursement through Accountable Care Organizations (ACOs) and bundled payment arrangements.
The Secretary also announced creation of a Health Care Payment Learning and Action Network through which HHS will work with private payers, employers, consumers, providers, and states to develop and expand alternative payment models. An HHS press release regarding the Secretary’s announcements can be viewed here.
While HHS’ desire to shift to outcomes-based reimbursement is nothing new, the Secretary’s announcements yesterday should signify to physicians and other healthcare providers that these payment models are likely to proliferate and as a result, pressure on providers to adapt to them can be expected to intensify. From a provider perspective, this is likely to mean that efforts to integrate through network formation, employment and the like will continue and networks may become more aggressive in their efforts to lock up eligible providers.
In news that may not come as a shock to those of us who have been through the cycle of hospitals purchasing physician practices before, a recent study has found that hospitals are losing considerable amounts of money on acquired physician practices. According to the study, 92% of reporting hospital CEOs state that they are losing money on their physician networks and 58% of the survey respondents report losing more than $100,000 per employee physician in 2014. For more information on the study, see “The Challenges of Integrating Physician Group Operations”, 2014 Kentucky Healthcare Industry Study, Dean Dorton Allen Ford, PLLC. While many hospitals believe that acquisition of physician practices is necessary in order to integrate the delivery of care, the question remains whether many hospitals will be able to absorb these losses long enough to reap the potential benefits of this integration. Payor models which would reward clinical integration have been slow to develop, and even once those models are established, there is no telling whether integrated provider networks will be able to make money under them.
Although unlikely to have a major impact on cash flow, physicians should keep in mind that under the CY 2015 Medicare Physician Fee Schedule (MPFS) which was published in November, the Centers for Medicare and Medicaid Services (CMS) indicated that it will hold claims for 14 days in order to implement the Fee Schedule changes. This hold will only apply to services rendered in 2015. Claims for services rendered in 2014 will be unaffected. Details regarding the claims hold can be found on the Medicare Learning Network website.
Despite the Department of Health and Human Services’ intent to make Medicare healthcare cost data more transparent for the healthcare consumer, according to a recent report by the U.S. Government Accountability Office, current Medicare cost data, and the manner in which it is being provided, are largely ineffective in enabling consumers to make informed healthcare decisions. The GAO cites a variety of shortcomings with current HHS transparency websites and tools, including that they lack information on topics of considerable relevance to consumers, such as patient-reported outcome measures and patient out-of-pocket costs, and they do not organize cost and quality information in a way that enables consumers to readily understand and compare provider performance or customize how the information is presented to enable consumers to identify the best providers for aspects of care that they may find most relevant. The GAO report substantiates one of the central concerns espoused by critics of the healthcare data transparency push: that consumers lack the understanding and/or training to understand complex healthcare related financial and outcomes data. Ultimately, however, the report serves to demonstrate that much work is still yet to be done if this data is to be useful to the health care consumer.
Last week, the Centers for Medicare and Medicaid Services (CMS) issued the final Physician Fee Schedule for Fiscal Year 2015. The annual Physician Fee Schedule includes various policy and payment changes to be implemented in the coming year. This year’s Fee Schedule includes details regarding Medicare’s payment for services outside of a face-to-face visit for managing the care for Medicare patients with two or more chronic conditions beginning in 2015. as well as a new, more transparent process for setting physician payment rates which is designed to allow for public input into the process. Other changes announced include changes to the quality reporting initiatives: Physician Quality Reporting System (PQRS), Medicare Shared Savings Program, and Medicare Electronic Health Record (EHR) Incentive Program, and further implementation of the physician value-based payment modifier. A summary of the FY2015 policy and payment changes can be viewed on CMS’ website Here.
Each year, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) publishes a Work Plan for the coming fiscal year which summarizes new and ongoing reviews and activities that the OIG plans to pursue with respect to HHS programs and operations during the current fiscal year and beyond. For physicians and other providers seeking to gain insight on the types of compliance issues the OIG will be reviewing, the Work Plan is an important resource. The FY 2015 Work Plan, among other things, identifies the following initiatives related to physician and other non-institutional practitioner activities:
- Anesthesia Services – A review of Medicare Part B claims for personally performed anesthesia services to determine whether they were supported in accordance with Medicare requirements, and to determine whether Medicare payments for anesthesia services reported on a claim with the “AA” service code modifier met Medicare requirements.
- Chiropractic Services – A review of Medicare Part B payments for chiropractic services to determine whether such payments were claimed in accordance with Medicare requirements.
- Diagnostic Radiology – A review of Medicare payments for high-cost diagnostic radiology tests to determine whether the tests were medically necessary and to determine the extent to which use has increased for these tests.
- Ophthalmologists – A review of Medicare claims data to identify potentially inappropriate and questionable billing for ophthalmology services during 2012.
- Physicians – A review of physicians’ coding on Medicare Part B claims for services performed in ASCs and hospital outpatient departments to determine whether they properly coded the places of service.
- Physical Therapists – A review of outpatient physical therapy services provided by independent therapists to determine whether they were in compliance with Medicare reimbursement regulations.
In response to the development of alternative payment systems, provider networks are forming at a frenetic pace. If you are like most of my physician clients, you have been or will shortly be presented with network participation agreements for review (or in many cases, signature with very little opportunity to review) and consideration. In evaluating potential network affiliations, consider these basic contract review pointers:
1. Although it may seem obvious, I often have to remind physicians that they should carefully read and understand each element of contracts presented to them before signing. Not surprisingly, given the volume of paperwork put in front of them on a daily basis, many physicians skip this most critical step on the assumption that they will have no bargaining power in any case. However, even if a contract cannot be negotiated, it is important to understand what you are signing.
2. Ask for and review all relevant supporting documentation. Many network agreements I have seen refer to policies, procedures and clinical protocols. Participating providers will be expected to abide by these documents so it is important to request and review them as part of the overall analysis of the affiliation. These supporting documents can impose material obligations on participating providers so if they have not yet been created at the time of presentation of the participation agreement, physicians should ensure that they have an opportunity to withdraw from the network without penalty once these documents are developed.
3. Pay close attention to the economic terms and be sure you understand how they will impact your practice. Physicians should request examples of how complex economic formulas would work and ideally should try to model the economic terms using real practice data.
4. Finally, chances are that more than one network will form in your market, and you could be faced with having to choose one over another. For this reason, it is important to evaluate whether a proposed affiliation requires exclusivity and how difficult it would be to withdraw (and take your patients with you) should you need to change affiliations.
Obviously, there are many other legal and business considerations that should go into the evaluation of potential network affiliations. However, doing some basic legwork on your own may help you to distinguish between those affiliations that are most likely to get off the ground, those not quite ready for prime time but worth keeping an eye on, and those that can or should be ignored.
Physicians in Pennsylvania who have been dispensing and billing for prescription drugs under the Pennsylvania Workers’ Compensation program will be disappointed to learn that House Bill 1846 (which already passed the House) was approved by the Pennsylvania Senate yesterday, essentially clearing the way for the bill to be signed into law. HB 1846, among other things, limits the amount a physician may charge for drugs under the Workers’ Compensation program to 110% of the Average Wholesale Price of the drugs. The Bill also limits the amount of drugs a physician can dispense to a Workers’ Compensation patient to a 7-day supply for Schedule II and III drugs and to an initial 30-day supply for any other drug. The final bill can be viewed here: Pennsylvania House Bill 1846