Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.
As the movement to value based arrangements continues many providers are considering joining an Accountable Care Organization (ACO). At the same time, regulators from the Federal Trade Commission (FTC) and the HHS Office of Inspector General (OIG) are signaling increased scrutiny of Accountable Care Organizations and other value based payment arrangements, especially those making creative use of the antitrust and fraud and abuse waivers in place for Medicare ACOs. A recent article states that claims of higher quality of care may help in defense of antitrust action. Tracking and organizing results that reflect efficiencies and quality improvements is obviously a must but before a provider even considers joining an ACO, the following questions must be asked and answered:
What level of risk are you willing to assume?
First know what level of risk you are willing to assume. For instance, are you comfortable assuming risk at all or do you want to enter this area more slowly and share in only the savings? A core challenge when converting to a value based, rather than fee for service system, is the lack of consistency in payment measures.
What are your baseline metrics for the quality measures?
The ACO will identify quality measures as part of the agreement. Currently there is a lack of a single set of metrics adopted by all payer sources. To negotiate your position, you must know your baseline and whether you can meet the benchmarks identified. Quality metrics can include for example, HEDIS measures, AHRQ measures, and CMS measures.
Florida’s providers are buzzing with questions about value based care, asking why now? Is it a fad? Will it really ever be a widespread form of payment? Why does Florida seem farther behind the value based curve than other markets?
While there are more aggressive markets in other parts of the country, the bottom line is this: CMS changes are coming and they will not be stopped. The government has invested too much money to turn around at this point. Here are just a few examples of why:
The CMS Value Based Program with hospitals is already implemented;
Center for Medicare and Medicaid Innovation is piloting NUMEROUS programs covering many physician specialties
CMS expanded the Medicare Shared Savings Program to 3 tracks.
A new Merit-Based Incentive Payment for Physicians, Physician Assistants, Nurse Practitioners, Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists will be apply to payments for services furnished in 2019.
The train has left the station. Providers will now shift from fee for service to value based payments with CMS. To be successful and still have a profitable business, clinical integration and quality improvements will need to be implemented to improve your practice whether you are hospital based or office based AND whether you are employed by a hospital or in private practice. These changes will be implemented for all of your patients as you will not distinguish in your level of service between patients with managed care as the payor rather than CMS. This essentially means that managed care payors will reap the benefits of these improvements in your practice. If you do not have a value based contract in place with the managed care payors they will not be sharing one dime with you. They will reap the benefits of your improvements AND keep the money! And by the time you get around to a managed care contract that is value based, the shared savings opportunities will be less than if you began those discussions now. read more
H.R.2 – Medicare Access and CHIP Reauthorization Act of 2015 was passed by the House on March 26, 2015 and the Senate on April 14, 2015. While the title of the law indicates one of the topics of the bill (removing the sustainable growth rate (SGR) methodology from the determination of annual conversion factors in the formula for payment for physician services), the title is not representative of a major change that could affect all physicians. Under the Medicare Access and CHIP Reauthorization Act of 2015, the Secretary of Health and Human Services is directed to consolidate components of the three specified existing performance incentive programs into a new Merit-based Incentive Payment (MIP) system under which physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists, would receive annual payment increases or decreases based upon their performance as measured by standards the Secretary shall establish according to specified criteria. read more
A January 24, 2014 court ruling in Idaho that will require the unwind of a hospital system’s purchase of a large primary care medical practice will cause mega practices to think twice about their size. The Idaho court ruled that St. Luke’s Health System’s purchase of the 40 physician Saltzer Medical Practice violated pertinent state and federal antitrust laws because the group had 80% of the primary care physicians in Nampa, Idaho, a city of roughly 85,000. The suit was brought by two competing hospitals and succeeded, despite St. Luke’s claims that integrating the practice would improve the quality of care.
In an ACO, participating physicians, hospitals and other healthcare providers use a coordinated approach to provide improved care to beneficiaries. As an incentive to participate in ACOs, Medicare shares its savings when participating providers coordinate to provide quality care while spending Medicare dollars more wisely.
The Centers for Medicare & Medicaid Services (“CMS”) have determined that a certain amount of exclusivity is necessary for an ACO beneficiary to be accurately assigned to an ACO. Exactly how much exclusivity is necessary has been the topic of much debate. Initially, lawmakers envisioned that only primary care physicians were required to be exclusive to their ACOs. After the public had the opportunity comment on the proposed law, the rule was changed. Now, it is generally accepted that if CMS assigns an ACO beneficiary to an ACO because of primary care services previously supplied by the physician, then the physician must be exclusive to the ACO. This is true whether the physician is a primary care physician or a specialist who provides primary care services to a patient with no primary care physician. read more
We shouldn’t be surprised that physicians still talk about banding together into “supergroups.” This has been a hot topic in South Florida for about 20 years. There are notable examples of large single-specialty groups that have succeeded – but unfortunately, there are many more groups that have crashed and burned, with many docs left considering how to get out. It’s an old joke, but getting doctors together really can feel like herding cats. The politics are tiring, expensive and time consuming. And there is no guarantee of success. read more
Hospitals, particularly those heading ACO development efforts, are quick to say things like “One day, all physicians will be employed by hospitals.” Though there is clearly some wisdom under that statement, it’s also a remarkable leap of faith.
Three things are clear in this era of healthcare reform: (1) healthcare will be provided to more, but with less; (2) there will be a growing move over time to pass financial risk to providers; and (3) those businesses in a position to control both costs and quality (and some say patient satisfaction) are in a position to both survive and even do better than ever.
This leaves the door wide open as to the form of the business that can succeed. Is it a single specialty mega practice? Is it a multi specialty medical practice? How about a hospital? read more
Healthcare professionals today are constantly faced with views of what’s changing in healthcare, and all of them seem equally convincing. “One day, everyone will be employed by a hospital” is one of the favorites. Not surprisingly, the proponents of that perspective tend to be….hospitals. “Everyone has to merge their practices” is another favorite. The proponents? Large super practices, of course.
How does one sort through this? Who’s right? The truth is that everyone is seeing part of the whole and is “right.” But being “right” doesn’t mean right for you. My opinion? read more
The popular conception in healthcare is that (1) a new law was passed, (2) it changed everything, and (3) in a bad way. Over time, however, it should get clearer that, while there was a law passed, the law alone is not driving changes to our healthcare system: it’s our own demographics and behavior. Most of the tax dollars currently fueling our healthcare system (and arguably our economy) are tied to an aging Boomer population that are soon to drop off the income producing cliff into the Medicare population. Bye bye income earners; hello ridiculous public healthcare expenditures. Though it is true that the timing for expanding public spending on healthcare (with the federal mandates aimed at employers and Medicaid eligibility expansion) could not be more poorly timed, the situation is more of a “Perfect Storm” than a surgical strike.
The financial stress of our changing population and of a historic utilization based healthcare system is causing our healthcare system to morph in every way. “Health insurance,” with increasing cost, copays and deductibles and reduced benefits, is quickly ceasing to look like your father’s 80/20 major medical plan and starting to look more like catastrophic coverage. Fee for service compensation is fast becoming “spoken” out of existence. There are more “pay for performance,” “case rate” and other outcome and risk based compensation models than you can shake a stick at. The simple truths are: payers have to deliver more with less; and patients have to bear more and more of their healthcare expenses. read more
[contact-form-7 404 "Not Found"] The idea of an organization which provides discounted fees to patients is not a new concept. Organizations like independent physician associations (IPAs), even accountable care organizations (ACOs) and simpler discounted fee plans will be surprised to know that Florida may require them to be licensed by the Office of Insurance Regulation (OIR), even though they do not handle pre payments and do not collect premiums. That’s perhaps the most startling aspect of the regulations—there is no financial risk involved, and yet Florida law seems to require regulation.
Pursuant to Fla. Stat. 636.202(2), a “discounted medical plan organization” means an entity which, in exchange for fees, dues, charges, or other consideration, provides access for plan members to providers of medical services and the right to receive medical services from those providers at a discount. A “discount medical plan” means a business arrangement or contract in which a person, in exchange for fees, dues, charges, or other consideration, provides access for plan members to providers of medical services and the right to receive medical services from those providers at a discount. Fla. Stat. 636.202(1). A discount medical plan does not include any product regulated under chapter 627, chapter 641, or part I of chapter 636 (governing Prepaid Limited Health Service Organization). Fla. Stat. 636.202(1), which of course is no comfort to providers looking to garner or protect market share by discounting services or by creating a collection of discount services providers, which is typical of IPAs and “networks.”
Before doing business in Florida as a DMPO, an entity must be legally organized in a compliant wayand must be licensed by the OIR as a discount medical plan organization or be licensed by the office pursuant to chapter 624 [Florida Insurance Code], part I of this chapter [Prepaid Limited Health Service Organization], or chapter 641 [HMO, Prepaid Health Clinic]. Fla. Stat. 636.204(1) emphasis added. Each discount medical plan organization must at all times maintain a net worth of at least $150,000.
Providers looking to provide discounted fee arrangements in a simple and effective manner many be surprised to know how complex that endeavor in fact is. Moreover, the discounts will likely (and ironically) have to be reduced in order to bear the state licensure and financial viability fees. Go figure!