The following email string from earlier today from physician leaders is very telling and tragic. The email discussion starts with this:
Many of you will recognize some of the themes in this piece written by a frustrated young physician who has made the tough decision to leave her practice. Some of you might have struggled with the same issues discussed in this essay.
Here are two quotes from her thoughtful essay:
“The phenomenon of patients as customers, the cultural rise of entitled incivility, and trusting Dr. Google more than their doctor has eroded some of the pleasure of patient care.”
“In the past decade, physician groups have been purchased by hospitals and conglomerations. Rather than being recognized for individual excellence by patients voting with their feet, this has resulted in doctors being interchangeable cogs in a system where patients/hour and shifts/month dictate value.”
Two physicians responded with the following:
As physicians, WE make the wheel go around. Yet we have allowed our knowledge, our expertise, and our unmatched dedication to be devalued by hospitals, insurance companies, politicians, etc.
I think that the more we are called providers and we do not educate the public about the time commitment and education that physicians put in to become the master of the profession then we lose. … medical students are very talented. We need to make this news because we are the only ones who can provide quality care and provide the impetus to decrease costs We are the only ones equipped to do so. The MD degree has tons of value and it is not an interchangeable cog in the wheel.
So true. My law practice focuses on representing physicians, which includes helping them evaluate and participate in opportunities as they deal with the onslaught of onerous laws, rules, and regulations. I constantly must remind my clients that physicians are and remain the sole source of value in healthcare. Notwithstanding that, many physicians, young and old, constantly ignore good opportunities for their practices because they are intimidated into choosing the wrong ones.
As the public member on the Board of Governors of the Florida Medical Association, I am pleased at the FMA’s focus (1) on lobbying legislators who are notoriously ignorant about physicians and the practice of medicine, and (2) on educating its members so that they can better understand and evaluate what is going on in the business of medicine.
I worry whether we can make a big enough impact quickly enough.
No other profession is faced with less respect or more demands or higher expectations than allopathic and osteopathic physicians.
This is not about “socialized” medicine, Obamacare, or anything other than economics. It has always been about the money. We are happy to make physicians work harder for less, and that has been happening for years. People don’t care because they have drunk the Kool-Aid from the insurance companies and the government that the medical profession is the problem with healthcare, and a misinformed public accepts the view that somehow physicians are the enemy.
The Tampa Bay Times included on its front page this morning an article entitled: “Big swings in medical prices make for a wild market, but savvy patients can benefit”
“It is a chaotic landscape, which is why it is so difficult for consumers and employers to navigate,” said Castlight vice president Kristin Torres Mowat.
So what gives?
For one, the market for health care doesn’t behave like most other markets. Consumers usually don’t know how much a procedure costs until after they’ve had it, and it can be challenging to compare prices beforehand. That means providers can set their rates somewhat independently of normal market forces — the forces that keep prices consistent at neighboring gas stations.
Bruce Vogel, an associate professor of health policy at the University of Florida (and a dorm mate at UF many years ago) was quoted in the Tampa Bay Times article — “It’s hard to find a market that deviates more from the perfectly competitive structure.”
Even Florida Gov. Rick Scott, a staunch conservative who opposes most government regulation, has expressed concern over the healthcare marketplace, focusing on the transparency of hospital pricing. In the September 29 online edition of Florida Politics, Gov. Scott was quoted:
“This is all about patients and empowering patients,” he told reporters after a Florida Cabinet meeting. “They should know what (a procedure) costs and be able to get as much information as they can.”
You can read the Governor’s official statement regarding hospital price transparency and supportive comments from members of the Commission on Healthcare and Hospital Funding here.
Gov. Scott is a smart guy – an M&A attorney, who founded Columbia Hospital Corporation which merged into the Hospital Corporation of America to become Columbia/HCA, of which he was CEO for a number of years (during which time Medicare fraud issues arose). It is not like he does not know how healthcare providers in general, and hospitals in particular, price their services.
Since the advent of third-party payers, healthcare has always been an artificial market. Vendors of healthcare and consumers of healthcare (those with health insurance) have rarely negotiated prices. The insurance companies negotiated with providers over what they would pay and with the insureds (or their employers) what their premiums would be. Add Medicare to the mix which set an artificial payment standard of some negotiated percentage of the Medicare rate, and pricing for healthcare services became almost completely independent of typical economic forces like supply and demand. Don’t even try to analyze pricing in rural or underserved markets.
So what is happening nowadays, when everyone is supposed to be insured, that makes healthcare pricing and bargaining with hospitals and other healthcare providers such a hot topic? I think it is because of high deductible plans. Health insurance has basically become insurance only for catastrophic claims. When the family deductible may be $5,000 or more, the cost for “unreimbursed” services becomes a matter of personal economics — even if the provider is charging the rate previously negotiated with the healthcare insurer.
Unfortunately, the negotiating for healthcare services is far more complicated than the negotiating over the price of a car. Transparency in healthcare pricing is important, but transparency in healthcare quality is critical. Quality of care will soon be the dominant factor as we move away from procedure based payment for healthcare services to preventive care services (paid 100%) and bundled/global payments focused on the episode of care.
Adam Smith never had a chance in healthcare.
When I graduated law school in 1981, health law was pretty much nonexistent. Now, to be relevant, most law schools offer some health law courses.
Because? Health law is hot. It was hot before Obamacare, and it will remain hot.
Getting healthy and staying that way is a passion for most Americans. Obamacare has changed the way the country thinks about dispensing health care. But there will always be sick people. New drugs will be invented, and new procedures adopted. All to make us healthier or to make us more comfortable in our sickness. Health care is big business, and, by necessity, will remain heavily regulated. After all, there will always be patients and providers who will try to game the system.
So, law students, if you don’t know what path to follow, you could do a lot worse than health law
“On July 08, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that updates payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2016. This year, CMS is proposing a number of new policies, including several that are a result of recently enacted legislation. The rule also finalizes changes to several of the quality reporting initiatives that are associated with PFS payments, including the Physician Quality Reporting System (PQRS), the Physician Value-Based Payment Modifier (Value Modifier), and the Medicare Electronic Health Record (EHR) Incentive Program, as well as changes to the Physician Compare website on Medicare.gov.”
The proposed rule includes provisions relating to the following;
- physician quality reporting system
- “Physician Compare”
- EHR incentive program
- Medicare shared savings
- advance care planning
- payment provisions on Part B drugs, misvalued codes, RVU reductions, “incident to” services, physician value-based payment modifier, etc.
Perhaps most significant in the area of healthcare business transactions are the physician self-referral (Stark law) updates:
- expansion of recruitment and retention provisions to NPPs
- updating physician-owned hospital requirements
- reducing burdens of technical noncompliance through more reasonable regulations in a number of areas (based on information learned from self-dsiclosures and the rersults of recent cases)
The complete proposed rule as published in the Federal Register on July 15 can be found here.
Comments will be accepted by CMS on the proposed rule until September 8, 2015.
A few weeks ago, the OIG published another one of its fraud alerts. This one was entitled, “Physician Compensation Arrangements May Result in Significant Liability.”
Everyone knows (don’t they?) that business arrangements in healthcare have to meet several legal requirements, including: (1) it cannot be based on the value or volume of referrals, (2) it must be at arms’ length, and (3) it must be commercially reasonable. When a healthcare provider enters into a transaction that violates any of these three requirements, he may have violated the anti-kickback statute or physician self-referral/Stark law or both, and any claim arising from the transaction that is submitted to the federal government for payment may be a false claim. Healthcare lawyers have long been warning their clients to be cautious about how they pay (and recruit) physician employees and contractors in order to avoid violations of the kickback, self-referral, and false claims laws. Violations carry stiff penalties and in some cases criminal sanctions.
There is nothing new in this recent Fraud Alert. Many similar fraud alerts and OIG advisory opinions and actual court cases have passed on the same message. And there is nothing surprising other than that the facts described in this Fraud Alert so obviously violate these healthcare laws that you have to ask, why is no one listening?
I have a three explanations:
- The false claims act was passed during the Civil War and was aimed at stopping corruption in how defense contractors were paid. The law made sense. There was a direct relationship between the defense contractor and the government dollars received. However, the false claims act makes no sense in healthcare — treating a patient is so separated from payment; the provider at the time of care may not know who is paying — government, commercial, the patient, or no one.
- The healthcare laws are so contrary to the economic rules that apply to other businesses and so counter-intuitive as to make them offensively ridiculous and begging to be ignored (which they are).
- As we move to a pay for performance, quality-based healthcare reimbursement system, these laws become even more irrelevant. Case in point — Accountable Care Organizations — a critical foundation for healthcare reform under the Accountable Care Act. ACOs could not operate unless waivers to these healthcare laws were implemented. Every healthcare provider is not in an ACO, but many are developing clinically integrated networks and other arrangements to oversee quality and utilization in order to compete more effectively with large healthcare systems and negotiate with payors in keeping with the goals of healthcare reform. They are forced to act as if the waivers applied to them also. In fact many consultants advise that the waivers DO apply to non-ACO networks.
It is time for a thoughtful review (and repeal) of these antiquated and economically debilitating laws in how they apply to healthcare providers. It is time to stop calling business sensible healthcare transactions fraudulent and punishing the participants.
These laws allow regulators to be lazy and stupid. Anyone can enforce laws based an strict liability or ones that have lines so faint that crossing them is unavoidable.
Seriously, who cares if someone pays a fee for referring a patient for care? Liability should be based on the quality and necessity of the care. Providing care not needed or charging for care not given — those actions should be punished. But that’s harder for regulators, so we continue to vilify healthcare providers and impose burdens on them that are far tougher than the benefits derived.
There is great celebration in the healthcare community about the repeal of the Medicare Sustainable Growth Rate (“SGR”). All the healthcare-related and other media are abuzz reporting on the jubilation:
- Becker’s Hospital CFO Report
- Health Leaders Media
- Modern Healthcare
- Kaiser Health News
In fact, the only comparable celebration that I can recall occurred on the death of the Wicked Witch in the Wizard of Oz. Actually, the repeal of the SGR and the witch’s death are more alike than different.
For years, the SGR has terrorized physicians. Every December and into the following new year, physicians had to wait to see whether their reimbursement from Medicare would be reduced by some double-digit percentage. Recently, physicians have been pawns for Democrats and Republicans trying to make points (perhaps “ping pong balls” is the better metaphor), with their livelihoods held hostage until some form of political rationality prevailed.
According to the summary/analysis of MACRA prepared by the Staffs of the House Energy and Commerce and Ways and Means Committees:
The legislation repeals the flawed Sustainable Growth Rate (SGR) formula and replaces it with the bicameral, bipartisan agreement to return stability to Medicare physician payments. The SGR formula is a cap on aggregate spending on physicians’ services where exceeding the cap resulted in punitive recoupments in subsequent years. The formula was passed into law in the Balanced Budget Act of 1997 to control physician spending, but it has failed to work. Since 2003, Congress has spent nearly $170 billion in short-term patches to avoid unsustainable cuts imposed by the flawed SGR. The most recent patch will expire on March 31st. Based on H.R. 1470, the bicameral, bipartisan unified Committee bill to replace the SGR, this policy removes the imminent threat of draconian cuts to Medicare providers and ensures a 5-year period of stable annual updates of 0.5 percent to transition to a new system. The new system moves Medicare away from a volume-based system towards one that rewards value, improving the quality of care for seniors.
The Medicare Access and CHIP Reauthorization Act, or MACRA for short, has been praised by President Obama who has promised to sign it. The 324-page Congressional print of MACRA does a lot of things in addition to repealing the SGR, including the following:
- Extension of the Children’s Health Insurance Program (“CHIP”) for two years
- Development of “alternative payment models” away from fee for service and toward quality of care
- Strengthening of Medicare’s ability to fight fraud and build on existing program integrity policies
- Additional $7.2 billion for community health centers
- Increasing Medicare premiums for some seniors and elimination of Medigap policies starting in 2020 from covering Medicare deductibles for new beneficiaries