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Are ACOs Destined to Fail?
HealthLeadersMedia published today an article titled “5 Reasons Why ACOs Could Fail.” There is nothing new about these five reasons. They are the ones all of us are aware of that haunt any effort these days to put together an integrated group of healthcare providers. Nevertheless, it is good to be reminded of these issues, because if not confronted and conquered, no group of providers will be anything more than a confederation of solo practitioners.
Here are the five reasons:
1. EHR — Without EHR, there can be no integrated healthcare. Many physician practices still do not have any form of electronic record system. The recent CMS roll out of the EHR incentive program registration may spur some activity.
2. Income Redistribution — ACOs must have a system for distributing the savings that are earned as a result of quality and utilization controls. The problem is that the rewards are based on a paradigm shift from the current system that pays more for doing more.
3. Lack of Patient Incentives — There are no economic reasons for patients to join an ACO or to cooperate in reducing costs relating to their care.
4. Cost Management Confusion — Providers will need assistance from actuarial and insurance consultants in order to set up an ACO.
5. Cost Shifting — The physician practice industry is consolidating through hospital acquisitions and mergers, and this may force increases in private insurance costs through cost shifting.
The above five reasons are from the HealthLeadersMedia article.
Here’s a sixth reason from me:
6. Out of Pocket Costs — Related to some of the reasons listed above is the cost and time to establish a viable ACO. Who will pay or reimburse the costs incurred by physician leaders who see longterm value in setting up an ACO?
Leadership, early planning, and a willingness to invest in the future are needed to overcome these obstacles. Can physicians do this on their own or will they wait for the hospitals and insurance companies to do it for them. If they wait, physicians stand to lose much.
HealthLeadersMedia’s Top 5 Physician Challenges in 2011
HealthLeadersMedia has identified the “Top 5 Physician Challenges in 2011.”
The author of the article, Joe Cantlupe, describes these challenges as “carry-overs, issues that unfolded in 2010, and will continue to be important for physicians in 2011, whether physicians are changing their practices or cutting back on their hours. These are certainly hot-button issues …”
The five challenges are listed below (linked to some additional explanatory material), but read the entire article for the complete discussion.
1. “Doc Fix”
3. Impact of Primary Care Shortages
CMS EXPANDS HEALTHCARE PROVIDER DIRECTORY
Yesterday, CMS announced its enhancement of its Physician Directory tool, which now will includes new information about physicians and other healthcare workers. The Physician Directory website is now called “Physician Compare.”
The new website, which was required by the Affordable Care Act of 2010, contains information about physicians enrolled in the Medicare program (M.D.s, D.O.s, O.D.s, D.P.M.s, and D.C.s). The site also contains information about other types of health professionals who routinely care for Medicare beneficiaries, such as nurse practitioners, clinical psychologists, registered dietitians, physical therapists, physician assistants, and occupational therapists.
The goal of the new website is to provide more provider-specific information for Medicare beneficiaries and other consumers. Presently, the information on the site includes contact and address information for offices, the professional’s medical specialty, where the professional completed his or her degree as well as residency or other clinical training, whether the professional speaks a foreign language, and the professional’s gender.
Later in 2011, CMS plans a second phase of the “Physician Compare” website which will indicate whether professionals choose to participate in a voluntary effort with CMS to prescribe medicines electronically.
More important, in future years, CMS will expand the “Physician Compare” website to include information about the quality of care Medicare beneficiaries receive from the healthcare professionals profiled on the website. This will include information on quality of care and patient experience. The Affordable Care Act requires CMS to develop a plan to implement this expansion by 2013.
“Meaningful Use” Checklist for EHR from PhysiciansPractice.com
The website, PhysiciansPractice.com, has published a helpful checklist for “meaningful use” in EHR. The checklist is reprinted below, but the website provides some useful CMS links.
Meaningful Use Checklist
In order to access federal incentive dollars through your EHR, you must prove “meaningful use,” the goal of which is to improve care and outcomes for your patients.
As defined by CMS, to achieve meaningful use you must first meet 15 core objectives plus 5 additional objectives from the menu below:
15 Core Objectives (You must meet all 15)
1. Computerized provider order entry (CPOE)
2. Drug-drug and drug-allergy interaction checks
3. Maintain an up-to-date problem list of current and active diagnoses
4. E-Prescribing (eRx) (CMS does not currently have e-prescribing guidelines available; check their EHR Web site for updates.)
5. Maintain active medication list
6. Maintain active medication allergy list
7. Record demographics
8. Record and chart changes in vital signs
9. Record smoking status for patients 13 years or older
10. Report ambulatory clinical quality measures to CMS/States
11. Implement one clinical decision support rule
12. Provide patients with an electronic copy of their health information, upon request
13. Provide clinical summaries for patients for each office visit
14. Capability to exchange key clinical information among providers of care and patient-authorized entities electronically
15. Protect electronic health information
10 Additional Objectives (You must choose 5)
1. Drug-formulary checks
2. Incorporate clinical lab test results as structured data
3. Generate lists of patients by specific conditions
4. Send reminders to patients per patient preference for preventive/follow up care
5. Provide patients with timely electronic access to their health information
6. Use certified EHR technology to identify patient-specific education resources and provide to patient, if appropriate
7. Medication reconciliation
8. Summary of care record for each transition of care/referrals
9. Capability to submit electronic data to immunization registries/systems (At least 1 public health objective must be selected)
10. Capability to provide electronic syndromic surveillance data to public health agencies (At least 1 public health objective must be selected)
Clinical Quality Measures (You must choose 6)
CMS also requires that you also meet 6 clinical quality measures –
One-Half of the clinical quality measures must be either the CMS core quality measures:
(NQF Measure Number & PQRI Implementation Number / Clinical Quality Measure Title)
* NQF 0013 /Hypertension: Blood Pressure Measurement
* NQF 0028 / Preventive Care and Screening Measure Pair: a) Tobacco Use Assessment; b) Tobacco Cessation Intervention]
* NQF 0421, PQRI 128 / Adult Weight Screening and Follow-up
Or the CMS alternate core measures:
(NQF Measure Number & PQRI Implementation Number / Clinical Quality Measure Title)
* NQF 0024 / Weight Assessment and Counseling for Children and Adolescents
* NQF0041 / PQRI 110
* Preventive Care and Screening: Influenza Immunization for Patients 50 Years Old or Older / NQF 0038
You choose 3 more quality measures from a menu of 38 measures.
For more information on clinical quality measures, go to the following link. In total, to achieve meaningful use, you will need to meet 26 requirements: 18 mandatory objectives and measures and another 8 of your choosing.
You can get more information directly from CMS.
OIG’s “Roadmap for New Physicians”
The Office of the Inspector General of the Department of Health and Human Services recently published on its website, “A Roadmap for New Physicians — Avoiding Medicare and Medicaid Fraud and Abuse.” This publication was the result of a survey done by the OIG to learn what types of instruction medical students, residents, and fellows receive on Medicare and Medicaid fraud, waste, and abuse. Both the Roadmap and the survey, along with the enhanced fraud and abuse and compliance provisions of the Healthcare Reform Act, clearly demonstrate the importance of these issues to the government. It is too late to try to fix a long ignored compliance problem at a physician’s office when the men and women with badges and guns are at the door.
Checklist for Dealing with Practice Breakups or Departing Physicians
Following up on the October 11 post, the following is a checklist to use as a starting point for dealing with either a practice breakup or a departing physician. The list is not exhaustive, and each practice will have its own special issues to address. Breaking up is definitely not for sissies.
Review of Available Documents:
A. Employment Agreement/Independent Contractor Agreement
B. Office Sharing Agreement
C. Organizational Documents
i. Bylaws/Operating Agreement
ii. Minutes/Consents
D. Shareholder/Member Agreements
E. Buy/Sell or Buy-Out Agreement
F. Employee Manual/Policies and Procedures
G. Office Lease Agreements
H. Bank Loan Agreements
I. Equipment Leases
J. Provider Contracts
K. Hospital Agreements
i. Recruiting Agreements
ii. Provider Services Agreements
L. Business Agreements
i. Billing Company
ii. Advertising Agreements
iii. Staff
iv. In-Office Ancillary Services
Issues:
1. Office lease obligation
a. Is the lease in default?
b. Is the lease personally guaranteed?
c. Assignment/Sublease issues
d. Duty to mitigate
2. Bank loan
a. Is the loan in default?
b. Is the loan personally guaranteed?
c. Is the physician responsible for a portion of any outstanding debt pursuant to a shareholder or other agreement?
3. Medical equipment leases
a. Is any lease in default?
b. Are there any outstanding medical equipment leases which are personally guaranteed?
c. Is the equipment in good condition, or have any value?
d. Does the departing physician need the equipment?
4. Professional liability insurance
a. Is tail coverage necessary?
b. If so, who has to pay for it?
5. Is there a Hospital Recruiting Agreement with an Income Guaranty, Expense or Incremental Cost Reimbursement?
a. Will the departing physician continue to practice within the hospital service area?
b. What are the parties’ continuing obligations?
c. Who keeps the departing physician’s accounts receivable?
d. Retention of items purchased with hospital funds?
6. Non-compete/Damages upon Competition
a. Does the non-compete violate applicable state statutes?
b. Does the non-compete violate common law restrictions on scope, damages, etc.
7. Notice to/Solicitation of Patients
a. What are the applicable provisions of the applicable state’s physician regulatory board?
b. Is there an agreement regarding patients upon termination?
c. Is there a non-solicitation agreement?
d. Duty of Loyalty/Fiduciary Duty of Departing Physician
i. Was the departing physician a director/manager or just an employee?
ii. Did the departing make arrangements to compete prior to departure, and if so, did the departing physician utilize practice resources?
e. Who drafts the Notice to Patients?
i. Who has the list of patients?
ii. Which patients are notified?
iii. Who bears the costs?
8. Non-solicitation of staff
a. Was the departing physician a director/manager or just an employee?
b. Did the departing physician solicit staff members to leave the practice prior to departure in contemplation of competing with the practice, and if so, did such arrangements damage the practice?
9. Confidentiality/Trade Secrets
a. Is there a confidentiality agreement?
b. If so, is it necessary for protection of the practice and is it reasonable in its terms?
c. Is there truly confidential information or trade secrets?
10. Fiduciary Duty/Duty of Loyalty
a. Is there an applicable state statute regarding fiduciary duty?
b. Has the departing physician acted in good faith and in a manner reasonably believed to be in the best interests of the practice
c. Employees owe the employer a duty of loyalty and must not, while employed, act in a manner that is contrary to the employer’s interests.
11. Continuity of Care
a. Is there a coverage issue?
b. Applicable state statutes or regulations of the physician licensing board
12. Medical Records
a. Is there an agreement regarding medical records?
b. Applicable state statutes or regulations of the physician licensing board
c. Costs
13. Provider Issues
a. Is the departing physician credentialed individually?
b. Contact federal/state programs as to change in practice/physician status
c. Contact any managed care organizations as to change in practice /physician status
14. Completion of all outstanding billing
a. Completion of all patient charting
b. Completion of billing records
c. Proration of global billings
15. Collection of Accounts Receivable
a. Is there an agreement regarding accounts receivable?
b. Does the departing physician have any rights in accounts receivable?
c. Does the departing physician have any liability for costs of collection?
16. Distribution of Jointly Held Assets
17. Assets of the Practice
18. Other business ventures
19. Call Coverage
20. Employee Benefits
21. Health Insurance
a. When does coverage terminate?
b. Is the departing physician entitled to an extension of benefits?
22. Life and Disability Insurance
23. Retirement Plan Benefits
24. Paid Time Off and Reimbursement of Business Expenses
25. Notify Referral Sources of Change in Practice
26. Who owns Pager Numbers?
27. Who owns Cell Phone Numbers?
28. Securing Computers and Electronic Data
a. Network user ID to be deleted or disabled
b. Disable or delete Windows login account on personal computer
c. Remove access or delete all passwords
d. Disable or delete e-mail account
e. Disable or delete voice-mail account
29. Return of Personal Property of the Practice
a. Laptop
b. Cell phone, PDA or pager
c. Security pass
d. Building and office keys
Physician Practice Breakups and Departing Physicians
Whether as a result of retirement, death, disability, or unresolved professional or personal disputes, the breakup of an established physician practice, or the departure of one or more of the physicians in the practice, is a difficult and trying ordeal for everyone concerned.
It is important for the members of the physician practice to understand the financial, ethical, professional and emotional issues that usually come to play in a practice breakup or physician departure. The physicians and their advisors must be sensitive to the conflicting perspectives of the different parties. The best time for the practice to think about and get guidance for the issues that will arise in a practice breakup or the departure of one or more individual physicians is when the practice is organized. Preparing for the possible breakup of a physician practice or how a physician will depart from that practice should occur when the practice comes together.
If the physicians and their advisors did not take the time when they established their practice to address in their organizational documents and other agreements what happens in a practice breakup, or when a physician leaves the practice, then what was already going to be a difficult and trying ordeal will likely become substantially more difficult, more time consuming, and more expensive.
An additional complicating factor is that physicians in a practice will often have become business partners in other ventures. The practice breakup or physician departure will require the parties to decide whether their interests in these other ventures must be separated also.
Of course, even when a practice has in place the types of documents described in this book, not every issue will be covered and often the agreements reached by the parties may have become stale with time. As issues are addressed and resolved, it is incumbent upon the parties and their advisors to document the practice breakup or physician departure with a definitive separation agreement that sets forth their agreements on how to deal with the various issues.
In a subsequent post, I will include a checklist to assist the parties and their advisors in identifying the critical issues to be considered in a practice breakup or physician departure.
For lawyers and other advisors who represent physicians, you may wish to consider buying Representing Physicians Handbook, Second Edition (2009, published by the American Health Lawyers Association). http://www.lexisnexis.com/ahla/ProductDetail.aspx?id=78
Joseph Rugg's Health Law Blog 