Physicians

Many pediatric hospitals have an opportunity to be a lead provider of patient care and administrative services to patients in states that are outsourcing Medicaid program administration to managed care companies.  Winn Halverhout presented on this topic for an AHLA webinar titled “Innovative Pediatric Hospital/Provider Partnerships.”

Thirty-seven states currently outsource all or part of their Medicaid administration to managed care companies.  Many states are dividing into regions and awarding Medicaid contracts in each region to only one or a handful of managed care companies, which creates opportunities for pediatric providers that MCCs regard as critical providers within a service region.  Pediatric hospitals are well-positioned to be the lead provider if they can build a critical mass of physicians and other pediatric care providers in the contract region.

The Federation of State Medical Boards recently endorsed a model policy that addresses the proper use of telemedicine services.  Only a few weeks later, a not-for-profit foundation released  a report highlighting the benefits of telemedicine and making recommendations for telehealth services.  It’s no surprise that telehealth and telemedicine have been in the news with increasing frequency given that the demand for telemedicine services are rising sharply.  According to a Law360 article, Deloitte Touche Tohmatsu Ltd. estimates that 75 million digital doctor visits will occur this year in North America.

In a recent article in Health Value Digest, Tiffany Hetland explored two items a hospital should have on its checklist when acquiring a physician practice: a billing and coding audit and a review of documentation practices.  The article is below.

Hospital acquisitions of physician practices have been on the rise for some time. At…

On Thursday, February 6, 2013, three congressional committees—the Senate Finance, House Ways and Means and House Energy and Commerce—introduced collaborative bipartisan legislation to repeal the sustainable growth rate (SGR), Medicare’s controversial physician payment formula, and replace it a system based on value versus volume of care. Although the committees agreed on policy, the lawmakers did not agree on who will pay the cost, which is about $126 billion over 10 years, according to a Congressional Budget Office report. If the legislation passes, Medicare-participating physicians would avert the 23.7% payment cut scheduled to occur on April 1.

If enacted, the SGR Repeal and Medicare Provider Payment Modernization Act will sufficiently change Medicare Part B payments. Below is a summary of some of the significant proposals.

  1. Repeal the SGR
    • The legislation would permanently repeal the SGR and provide an annual update of 0.5% from 2014 through 2018. The 2018 payment rates would be maintained through 2023 so physicians have time to receive additional payments through a merit-based incentive payment system.
  2. Establish a Merit Based Payment System
    • In 2018, payments will be based upon the new Merit-Based Incentive Payment System (MIPS) which consolidates the Physician Quality Reporting System (PQRS), Value-Based Modifier, and “meaningful use” program for electronic health records (EHRs). The MIPS would apply to doctors of medicine or osteopathy, dental surgery or dental medicine, podiatric medicine, chiropractors, physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists. Other professionals who are paid under the physician fee schedule may be included starting in 2020 if viable performance metrics are available.
    • Under the MIPS, payments are based upon quality, resource use, meaningful use and clinical practice improvements. Under that system, penalties for underperformers are capped at 4% in 2018, 5% in 2019, 7% in 2020 and 9% in 2021. Rewards for exceptional performers are capped at $500 million per year from 2018 through 2023.
  3.  Push to Alternative Payment Models
    • Physicians who receive a significant percentage of Medicare revenue from an alternative payment model such as an accountable care organization will receive a 5% bonus starting in 2018. The payment model must involve a certain amount of risk for financial losses and include a quality measurement component. However, patient-centered medical homes are exempt from the financial risk obligation if the model works in the Medicare population. In addition, alternative payment models from private payers and Medicaid will be taken into consideration if no Medicare model exists in a provider’s area. Providers who participate in an alternative payment model will be exempt from the MIPS. CMS would also create a Technical Advisory Committee to study physician-focused alternative payment model proposals.

A recent OIG Advisory Opinion (Adv. Op. 13-15) is, to a certain degree, more interesting for one of its footnotes than the body of the opinion itself. The footnote addresses a hotly debated issue, originally raised in an OIG Management Advisory Report (MAR) in 1991. That MAR took the position that an agreement between a hospital and a hospital-based physician group was a “suspect arrangement” under the Anti-Kickback Statute because the physician group was essentially required to split its revenue with the hospital–including requiring the group to provide uncompensated services to the hospital.

The OIG modified this position somewhat in the Supplement Compliance Program Guidance for Hospitals in 2005. In that compliance guidance, the OIG stated that an exclusive arrangement that required a hospital-based physician group to provide “reasonable administrative or limited clinical duties directly related to the hospital-based profession services at no or a reduced charge” would be permissible. The Compliance Guidance cautioned, however, that uncompensated or below-market-rate services would still be subject to “close scrutiny.”

Scrutiny of physician prescribing (particularly pain management) seems likely to increase in 2015 under new CMS regulations that were published on January 10, 2014. The proposed regulation makes policy and technical changes regarding the Medicare prescription drug program (Part D). Among the changes are the granting of explicit authority to deny (under 42 CFR §…

When was the last time you thought about your compliance program? As we know, an effective compliance program is important for healthcare companies. It’s also important to review your compliance program periodically and update it according to the latest guidance. OIG guidance and recent Corporate Integrity Agreements (CIAs) are informative about what the OIG is…

Last week, U.S. Senators warned hospitals that higher rates of back surgery may indicate a kickback if the purchase of spinal devices has increased as a result of physician ownership of device distributors.  Senators Orrin Hatch (R-Utah), Max Baucus (D-Mont.) and Chuck Grassley (R-Iowa) issued the bipartisan statement based on an HHS report that showed a direct correlation between…

In response to healthcare reform, terms such as “physician alignment strategies” and “physician integration” have resurfaced in our vocabulary as healthcare providers.  In our new healthcare environment, many experts advocate that only hospitals that are aligned, or integrated, with their physician providers will be able to organize delivery systems that are capable of meeting current and future demands for efficiency, quality, price and services expected from patients and payers.  As the demands on health care providers continue to escalate, will experts also someday advocate that only hospitals that are aligned with other hospitals, or other health systems, be positioned to meet the then-current and future expectations related to providing high-quality and cost-efficient health care?

As the future of hospital and physician alignment strategies continue to evolve, more physicians, hospitals and health systems are affiliating.  Even large organizations such hospitals and health systems are teaming together to form loose associations in order to better manage the demands for efficiency, quality, price and service being thrust upon all providers by health reform, payers and patients.

There are a number of recent examples of health systems and hospitals forming strategic alignments to better manage healthcare costs and patient care. 

Adoption of EHR technologies has greatly increased as the result of the EHR Incentive Program. Touted as one of the necessary building blocks for creating integrated delivery systems, EHR is considered vital to improve health quality, efficiency and patient safety.  The EHR Incentive Program has been very successful and CMS has awarded over $10…