As the shift from fee for service to value based payment develops, one thing is crystal clear: volume is no longer king. Prior to 2010, medical providers were being paid on the amount of services that they rendered. The more patients that they treated, the more money they made. That certainty has disappeared with value based compensation and outcomes are now driving the compensation. To be successful, a provider must learn to bend both the quality and cost curve. In short, providers must increase quality while decreasing costs.
When contemplating negotiating or entering into a value based contract, the first thing to consider is the amount of financial risk that your practice or healthcare business can take on. The four main types of financial payments are:
The best way to determine which payment model best suits your needs is to hire a qualified financial healthcare analyst who will be able to generate financial risk modeling. A provider will then have a common starting point to negotiate as well as a better understanding of the issues, risks, and potential cost savings involved.
443 Providers sign up for the CMMI Oncology Care Model including numerous providers in Florida. The Oncology Care Model is a new payment model for physician practices administering chemotherapy. Practices receive reimbursement via an episode based payment model that incentivizes high quality coordinated care. Letters of Intent from payers (several of which are Florida payers) wishing to participate in the new model were submitted and Letters of Intent from providers wishing to participate were also submitted. A list of those payers and providers who submitted LOIs can be found at http://innovation.cms.gov/initiatives/Oncology-Care/ .
Like a scene from the popular Netflix series, House of Cards, Governor Scott has requested that State agencies list critical services in light of a possible government shutdown over a battle of the budget. It is important to note that Floridians relying on Medicaid could be impacted and shifting their care from the Primary Care Doctors back to the Emergency Departments. Lawmakers will have a special session from June 1-20 with the goal of passing a budget.
In the meantime, hospitals have responded to Governor Scott’s challenge for profit sharing and likening healthcare to baseball. The Florida Hospital Association responded equating the profit sharing to an additional tax on hospitals. The Florida Hospital Association stated that hospitals already contribute roughly $1.3 billion to Medicaid as supported by a report commissioned by the State. Governor Scott also drew criticism from State Senator Don Gaetz in a talk radio interview where he likened the Governor’s profit sharing to government price controls.
In the “good old days” (in healthcare, that means more than a week ago), it was understood that if a client didn’t accept any state or federal healthcare program dollars (e.g. Medicare, Medicaid, CHAMPUS, TriCare, Supp Plans), they would not expect to get a “knock on the door” from any federal regulatory authority. No federal or state healthcare program dollars used to mean the client would only tend to hear from state regulators or commercial payors. Those days are done!
Federal law enforcement is increasingly pursuing alleged criminal wrongdoing in the “non-government” healthcare space. One of their favorite weapons is 18 U.S.C. 1347, the Federal Healthcare Fraud Statute, which gives federal law enforcement broad enforcement authority with respect to suspected wrongdoing involving interactions between healthcare providers and commercial insurers.
Balance billing occurs when a provider collects from a patient the difference between the amount billed for a covered service and the amount paid for that service. Balance billing does not apply when collecting deductibles, copayments or coinsurance.
Under Florida law, a provider may not balance bill a patient for any service, if an HMO is liable and responsible for payment. Contrary to what many people believe, this is true whether you are in-network or out-of-network. Even hospital based out-of-network physicians, such as anesthesiologists, pathologists, radiologists or emergency room physicians cannot balance bill HMO members where the hospital has a contract with the HMO or there was authorization given for an episode of care.
A healthcare provider’s “billed charge” is usually the total charges billed before applying any contractual discounts. Where there are no contractual relations, a provider’s charge may be considered the equivalent of fair market value for the service provided. But what is fair market value? If the provider is contracted the rate is confidential and not subject to disclosure. If the provider is non-contracted, there is no standard billing rate for providers, making it difficult to get reliable rate data on what is fair market value for similar services or similar providers. One Florida court has found that “fair market value” is the price that a willing buyer will pay and a willing seller will accept in an arm’s length transaction.
Though it can be tempting to offer help to patients in this era of sky high healthcare costs, out-of-network physicians must remember that they should not only be collecting copayments and deductibles from their patients at the time of service and before they leave the office, but also that collecting these payments is their obligation. For physicians and other providers who engage in the practice of failing to collect payments there is a significant legal exposure under federal and state laws including civil litigation brought by commercial health plans, managed care organizations and medical benefit managers regarding routine waiver of these payments.
In a recent Alert, Florida’s Agency for Health Care Administration announced that Florida Medicaid is in the throes of updating its Provider General Handbook, and will soon require new enrollees to provide either a copy of their Health Care Clinic License or a Certificate of Exemption from the clinic licensure requirement. Once Handbook changes have been adopted, Florida Medicaid will roll-out similar requirements for existing providers to produce either Licenses or Certificates of Exemptions.
Up until now there really has not been a compelling reason for an exempt provider to obtain a Certificate of Exemption. We urge our clients to file for their Certificates of Exemption in an effort to avoid what is likely to be an onslaught at AHCA’s licensing bureau.”
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.
You’ve hired a new doctor to join your practice, but it will take several months to get the new doctor on your insurance plans and to add him or her to your group practice. What do you do? Can you bill for the new doctor’s services under your own provider name or number? Can you hold the billing and submit it at a later date?
Billing for the new doctor’s services under the name or provider number of a physician who did not actually perform the service is fraud. It’s as simple as that. And it’s a serious offense, punishable as a criminal offence, regardless of the payer involved. In other words, it’s not true to say “Well, it’s ok to do with HMOs, but not Medicare.” It’s fraud for every payer. And, with federal payers, it’s a federal crime! So what do you do?
Physicians are very limited with respect to Medicare and Medicaid patients. The new doctor must be added to the practice’s provider number, especially if the practice provides “designated health services” such as PT, rehab, clinical lab and diagnostic imaging. Most practices time the hiring of the new doctor with adding him or her to the provider number and also ensuring that the new doctor is contracted with various payers, all of which can take several months.
There may be a little more flexibility with respect to PPOs and HMOs, though this is tricky. These payers are usually adamant about credentialing the new doctor and about having him or her sign a participating provider agreement before providing services to their insureds. In some very limited circumstances, a payer may expedite the process and may even suggest a billing arrangement that would otherwise constitute insurance fraud, but physicians still need to be careful with these arrangement. When a payer suggests such an arrangement, it is absolutely essential that the proposal and agreement be in writing and review to ensure regulatory compliance. Otherwise, the practice and the doctors involved may be subject to fraud based claims—e.g. violations of the state insurance laws and even the federal False Claims Act.
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.