Joseph Rugg's Health Law Blog

Health care reform, economic and business uncertainty, increased regulatory burdens and scrutiny, and declining reimbursement from Medicare and other managed care payers are pushing a realignment of physician practices and providing new incentives for integration, consolidation, and other practice structures.

In a recent Medical Economics poll, 4 out of 5 physicians found it challenging to maintain their dual roles as doctor and businessperson, and 76% thought it was only going to get worse.

New and Complicated Regulations, like the following:

• New enrollment, disclosure , and compliance requirements under the Affordable Care Act
• Transition to ICD-10 Coding and version 5010 HIPAA transaction standards
• Regulatory and Advisory Organizations are expected to impact care and reimbursement –
  • Patient-Centered Outcomes Research Institute (identifies research priorities and conducts research on the clinical effectiveness of medical treatments)
  • Independent Payment Advisory Board (makes recommendations to reduce the per capita rate of growth in Medicare spending)
  • Physician Quality Reporting Initiative

Increased Regulatory Oversight, like the following:

• Stark, Anti-kickback, HIPAA, False Claims Act, and similar Florida laws are being vigorously enforced (e.g., HEAT)
• The Affordable Care Act has made health care fraud much more dangerous –
  • A physician no longer must have direct knowledge that his or her actions constituted a violation to be prosecuted.
  • Activities of staff may be more easily attributed to the physician
  • There is new liability for making a false statement or material error on provider applications
  • Keeping an overpayment for longer than 60 days after discovery is now a violation of the False Claims Act
  • Physicians providing diagnostic services like MRI, PET and CT scans must provide information to patients in writing about the other area providers
• Whistleblower and Qui Tam actions by former employees
• Increased scrutiny of valuations

Reimbursement issues, like the following:

• Decrease in government reimbursement – slower, less reliable
• Increase in number of Medicaid funded patients with lower payments (an average Medicaid payment is 56% of private payment, Medicare is 81%)
• Affordable Care Act raises the Medicaid rate for primary care physicians to 100% of Medicare in 2013 and 2014, but no guarantee long term
• Payment is shifting from traditional fee for service to “results delivered,” and segmented approaches to care are being replaced by accountability and responsibility for a patient’s health
• Thus, changes in payment methodologies — bundled payments (combined payments across multiple sectors), and new delivery models (e.g., Accountable Care Organizations and Medical Homes)

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In subsequent posts, I will outline the following and discuss how they fit into evolving physician practice structures: 

• Different Physician-Health System Integration Models
• ACOs, IPAs, and PHOs
• MSOs
• Physician Practice Consolidations
• Changing Levels of Medicare Participation
• Concierge Practice.