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| AGG Latest Issues in The Industry | |
We have added this guide to Latest Issues to enhance its utility. We now group developments by topic area and link to the relevant place in the Latest Issues discussions. Topics include (1) Quality and Value (69 entries); (2) HIPAA and Data Issues (9 entries); (3) Compliance, Stark and Fraud and Abuse (52 entries); (4) Reimbursement (25 entries); (5) Medical Staff Issues (24 entries); (6) Contracts, Antitrust and Other Issues (28 entries); and (7) PROMETHEUS Payment® Model (9 entries). Developments still appear in reverse chronological order with the most recent listed first. Some developments may appear under multiple topics because they have multiple implications.
3. Compliance, Stark and Fraud and Abuse
6. Contracts, Antitrust and Other Issues
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The OIG's Work Plan for 2013 First, the OIG has identified compliance with the reassignment rules as meriting its attention. Reassignment is part of the much more highly restrictive rules and processes of enrollment and maintaining enrollment. We have written on this topic, repeatedly because we know there are real pitfalls here. (See Shay, "Potential problems exist in the Medicare enrollment process", Medical Economics (November 25, 2011), Shay, "Successfully navigating the Medicare enrollment appeals process", Medical Economics (November 10, 2011, Gosfield and Shay, “Medicare Enrollment: A Never-Ending High Hurdles Race The OIG will also be taking yet another look at physician billing for “incident to” services, one of the areas physicians must confront as they change their practice patterns to become more efficient, improve patient satisfaction and create better value for patients and payors, including Medicare. Failure to comply with the requirements of the “incident to” rules can lead to overpayments and potentially false claims. Physicians have been charged criminally on this issue and they have also faced civil false claims suits by the government. This is not a topic to trifle with. In 2013, the OIG will look back to determine the extent to which CMS made potentially inappropriate payments for evaluation and management services. Here, the new concern is that with the advent of electronic health records, documentation using macros and other templates is driving toward increased utilization of higher level codes. There is real debate in the industry as to whether EHRs are permitting more accurate documentation and billing or whether some of the software packages drive towards upcoding. Finally, the OIG has identified place of service inconsistencies as another target for review, with primary attention to discrepancies between hospital claims and physician claims. The value of the Work Plan is that it offers an early warning opportunity for providers, among others, to review their current practices with respect to the identified targets of review. Based on what it finds in the Work Plan, the OIG identifies suggested policy changes as well as potential topics for audit targets by the reams of investigators and auditors that the government now uses to enforce its increased fraud and abuse authorities. Forewarned is fore armed. Physicians should review their practices for all four topics. The health reform legislation called on the Secretary of HHS to develop a pilot program under Medicare to evaluate bundled payment. The Bundled Payment for Care Improvement (BPCI) initiative has launched. The law says the pilot will last five years, must be budget neutral, and if the Secretary finds it to be beneficial to do so can be extended in time and scope. In other words, bundled payment could become mandatory for Medicare for categories of conditions, after 2017! Commercial payors are also experimenting with bundled payment, but with relatively tepid results. In "Bundled Payment: Avoiding Surprise Packages All of the messages to physicians from the new health reform law and the market are that they need to improve the value of their performance in terms of efficiency and cost effectiveness, improved quality and patient-centricity and satisfaction. An obvious means to this is the deployment of less expensive clinical personnel to extend the physician's reach. In "Highest and Best Use Revisited" As more and more physicians become employed by health systems and hospitals, concerns are raised regarding how the employers may manipulate physician behavior based on the master-servant nature of employment. In light of those concerns, the AMA has issued Principles for Physician Employment As the health care system confronts the need for significant change to produce more value, observers note the factors that drive up health care costs. One such commentator, Julie Appleby, writing in Kaiser Health News identified 7 factors driving up health care costs. Francois de Brantes, the Executive Director of the Health Care Incentives Improvement Institute, Inc. (www.hci3.org), the board of which Alice chairs, recharacterized these as the Seven Deadly Sins of Rising Health Care Costs. They merit our attention. They include (1) Greed -- paying for volume rather than value; (2) Gluttony -- an increasingly unhealthy population; (3) Envy -- desire for new technologies and drugs; (3) Sloth -- tax breaks on insurance premiums; (5) Pride -- lack of transparent information; (6) Lust -- provider consolidation; and (7) Wrath -- legal and regulatory barriers to change. Most have had some attention paid to them in the health reform legislation. But contrary to the views of some on the far right who believe the law represents a vast government take over of healthcare, it is, in fact, quite the opposite. From the provider's perspective it is 1,000 pilots blooming in terms of real payment change. The fraud and abuse authorities do represent increasing wrath with respect to unnecessary expenditures. But providers -- and most particularly physicians -- are going to have to embrace the idea of changing themselves or they will be forced to change by others. Many of the issues we work on with our clients represent those kind of forward looking efforts, but, we think many more physicians need to be more pro-active about their futures. With the questions about the health reform legislation's constitutionality resolved, the pace of change in the provider community has accelerated. In a well documented, sweeping review of physician practice developments, with special attention to how physicians can remain independent, Jeff Goldsmith in his very interesting commissioned paper for the Physicians' Foundation looks at significant trends. These include rising costs for physician practices, widespread retirement of baby boomer physicians in the near term, and the ways in which health policy gives preference to hospital employment, which likely is unsustainable in current forms. Looking at The Future of Medical Practice and The Need to Innovate he offers examples of approaches including micro-practices, well supported IPAs, and groups which take professional services risk payments, among other innovations. He offers policy recommendations for change. He makes the case that hospital employed physicians are vastly less productive than their private practice colleagues and their financial performance lags substantially as well. He posits that many of the current arrangements will be unsustainable. We have been making the same points since 2009 as well as more recently. We would take issue with his views of innovative payment initiatives though, since he does not address the PROMETHEUS Payment® model which does not give physicians insurance risk, but rather risk to manage care effectively. Not only that, but its budgets (Evidence-informed Case Rates®) begin with good, clinical practice guidelines. Jeff's arguments regarding financing the medical home don't go as far as what we have described as to how PROMETHEUS Payment can sustain the medical home. Physicians today are paid fee for service for a non-insulin dependent diabetic about $311 for a year of care. Using the PROMETHEUS Payment model, the same physician would be paid for the same patient for the same year of care $2329 AND the system would save substantial amounts of money currently spent on potentially avoidable complications. Physicians should learn about this!!! New payment models are only part of the innovations physicians will have to adopt. We now offer a suite of useful tools that can be deployed by physicians in shaping their own new futures including (1) our two versions of the clinical integration self-assessment tool -- one for networks Bundled payment has been touted as the next, new aligned incentive payment model. Although rarely defined in the many discussions about it, bundled payment by definition combines two different providers, typically traditionally paid differently, into one budget or, in more radical versions, subject to a single prospective payment. Today's bundled payment models usually include an episode based payment. The Medicare ACO program anticipates a bundled payment model in its requirement that participating entities have the ability to allocate dollars to the disparate participants. In fact, though, in that program hospitals, physicians and others will be paid on a business as usual basis, and then, at the end of three years, if they have saved money over a benchmark there will be one payment to share. PROMETHEUS Payment offers a different model. If providers want to be paid separately, they are at risk together in a single budget, but PROMETHEUS Payment has a software program that can allocate savings appropriately to the diverse participating providers, based on good clinical practice guidelines which form the basis for the case rate. The incentives are the same, but the payment methods differ. Many commercial bundled payment and ACO programs follow the Medicare model. Herein lies the rub. Unless there are clear rules at the outset, providers may end up in the rancorous fights that characterized the few instances in the 1990s when PHOs received dollars, usually held by the hospital. CMMI asked Alice to present a technical assistance webinar for potential participants in their Medicare Bundled Payment Initiative on contractual and governance issues among providers in administering bundled payment models, and in "Avoiding Food Fights: The Value of Good Drafting to ACO Physician Participants Although most of the health reform furor was about the individual mandate, we have repeatedly made the point that health reform gave new weapons to prosecutors of fraud and abuse, and the financial pressures of the new environment make fraud and abuse enforcement a major focus of the regulators and enforcers. When GlaxoSmithKline paid more than $3 billion to settle false claims charges for a variety of misbehaviors, the government also made it clear, once again, that they would go after individual executives who ignore or worse yet encourage violative behavior.. Many in the commercial sector do not understand that the government is on a cultural jihad about this. It is remarkable that over the last twenty years, as measured by Public Citizen, fully more than 25% of Federal False Claims Act recoveries have come from big pharma. The government has new weapons and new approaches. "We used to hunt like an elephant and now we chase like a cheetah" is the line a senior advisor for investigation has used. Alice authors a book which is updated every year titled Medicare and Medicaid Fraud and Abuse and the inexorable tightening of the enforcement snares is abundantly clear. What can regular providers do? As we have repeatedly recommended, now is the time to buff up your compliance program and if you don't have one it is imperative that you develop solid approaches to compliance. In "Compliance programs: more important now than ever We have been exhorting physicians to recognize this critical moment in health care history to change fundamental aspects of the way they deliver care in order to regain time and touch with their patients, as well as to position themselves to maximize their financial opportunities. There are a host of ways of doing this from clinical integration, to realigning with hospitals, to revitalizing the organized medical staff, to forming networks of independent physicians, and more. In a piece by a professor of radiology, pediatrics, medical education, philosophy, liberal arts, and philanthropy at Indiana University, where he also serves as vice chair of the Department of Radiology, analogizes medicine's challenges to A Cardiac Model for Resuscitating Health Care takes up the banner of physicians putting the heart back in medicine by leading these efforts. His analogies of corporate cardiopathy and practice heart failure make the point in a different way. A short article worth a read. Between April and June, 2012, the Centers for Medicare and Medicaid Services (CMS) sent out almost 12,000 revalidation requests, some to providers who may even have completed a revalidation in recent years. However, with the passage of the Affordable Care Act of 2009, any Medicare provider who enrolled prior to March 25, 2011 is subject to a revalidation request between now and March 23, 2015. For those who have yet to undergo it, revalidation is the process by which CMS re-credentials providers who have Medicare billing privileges. The revalidation process is akin to “re-enrolling” under the newer, more stringent screening process put in place in February, 2011, requiring that providers complete a full CMS-855 application. Revalidation, like initial applications and updates, is a time-consuming, detail-oriented process which implicates providers’ billing privileges, so providers should be especially careful in responding to a revalidation request. Enrollment and revalidation are significant challenges. As we have said in teleconferences, and multiple articles [November 10 and November 25 Medical Economics articles, DermWorld article from April 2011, ASNC articles March-April 2011 On June 26, 2012, the Department of Health and Human Services' Office of Civil Rights ("OCR") released the audit protocols it is using in auditing covered entities under HIPAA, which is relevant to increased enforcement of the privacy rules. The information, located here, includes audit protocols for both the Security Rule and the Privacy Rule (including the Breach Notification provisions), broken down by Federal Regulation section. For example, when auditing covered entities with respect to their use of de-identified information, auditors are instructed to ask the covered entity’s management team whether a policy or procedure exists to de-identify protected health information, to review such policies and procedures in relation to regulatory criteria, and to verify that they are updated and presented to the covered entity’s workforce. This release provides insight into the OCR’s concerns regarding HIPAA and can assist covered entities in developing their own HIPAA compliance programs. Since even small physician practices have been subjects of enforcement, compliance with the privacy and security rules (See our teleconference - "When PHI Escapes") is yet a new imperative. As health reform unfolds for the public payment programs, and commercial payors get on the value bandwagon too, it is increasingly clear that the role of physicians in making change happen will be paramount. Although there is much that hospitals can do on their own to improve quality, patient safety and value, none of the promise of health reform will be met without the enthusiastic involvement of physicians. Why physicians deserve special attention and most importantly what they can do to help themselves, has been an increasing focus of Alice's writing and speaking. From a six minute YouTube excerpt of a presentation to the Pennsylvania Medical Society leadership to an hour YouTube clip of a presentation to the Texas Medical Association, she makes the point that the moment for physicians to step up and organize themselves for better performance and better results is now. Her editorials in Maryland Medicine As the health care delivery system is reconfiguring, many physicians have sought employment by hospitals as a life preserver in uncertain times. At the same time, traveling throughout the country, Alice has seen that there are a multitude of physicians who have no desire to be employed, but while remaining independent, also are coming to understand that they will have to clinically integrate with other like minded physicians, if they are to be successful in demonstrating real value in their care delivery. The Clinical Integration Self-Assessment Tool v 2.0 (CISAT) is oriented toward employed physicians – whether in their own groups or by hospitals – on one hand, or in the more hospital-centric settings of the organized medical staff or a newly forming ACO-like entity, on the other. Now in CISAT v 2.1 Now that the interim final Medicare ACO regulations have been published, and the first Pioneer ACOs announced, much of the furor over who will move to be an ACO should begin to subside. The regulations, while an improvement over the proposed regulations still describe a complex, infrastructure-intense, highly detailed set of requirements, with much of the potential reward still speculative. Alice has long been skeptical of the ideas embedded in the legislation. In many ways a more interesting opportunity has been presented by the Center for Medicare and Medicaid Innovation (CMMI) in its call for proposals to be a bundled payment pilot. Here, CMMI has provided four models for providers and 'conveners' to experiment with different models of bundled payment, with the proposers given the flexibility to define their own episodes of care around which payment would be bundled. The thirty day post discharge model is for physicians to prevent readmissions. There is a model for integrated systems. One for hospitals alone, and one which very much reflects the PROMETHEUS Payment approach. In "Here's how to participate in CMMI's bundled payment pilot" (Sept 2011). Alice describes some of the practical implications and legal issues associated with pursuing this opportunity. These projects will be worth watching. The health reform legislation has put a firm stake in the ground with respect to expanding the measurement of quality for many providers. One of its principle vehicles was to solidify the former Physician Quality Reporting Initiative (PQRI) into a Congressionally mandated Physician Quality Reporting System (PQRS). Although what is reported has nothing to do with whether either quality standards were met or quality itself improved, with the financial incentives available to those who report voluntarily, the idea is that physicians will learn to report quality effectively. By 2015, physicians who do not report will be penalized. In "PQRS and Its Penumbra In 2007, Alice conducted a unique survey of the extent to which physician groups compensated their employed physicians for quality. As physicians consider deploying a range of strategies to enhance their performance, a new snapshot of the state of the art of compensating physicians seemed a worthwhile undertaking. Again, with the assistance of the American Medical Group Association (AMGA) Alice surveyed their membership. In "Compensating Physicians for Quality and Value: A Changing Landscape Medicare’s “PhysicianCompare” website has been live since December 30, 2010, offering the public a database of physicians and non-physician practitioners (NPPs) who participate in Medicare, searchable by specialty, location, and last name. The website also shows whether a physician or NPP accepts Medicare assignment, and whether they participated successfully in the 2009 Physician Quality Reporting Initiative. By 2013 the site will begin reporting quality performance information. However, some physicians are finding that their own entries on the website contain errors. The PhysicianCompare website populates its database with information drawn from Medicare’s Physician Enrollment, Chain, and Ownership System (PECOS) – the electronic Medicare enrollment website. This represents a golden opportunity for physicians and physician groups to check whether their enrollment information is up-to-date. If a physician notes a discrepancy in the information, or if information is missing, that physician should submit a revised enrollment application as soon as possible. Errors such as missing practice locations, physicians who have not worked for a practice for years listed as practice members, and unlisted current members may be spotted on the Physician Compare site before they become a problem and in time to be corrected. As we have noted before, Medicare’s focus on keeping bad actors out of the program has made the enrollment process fraught with peril. Minor errors in completing forms, misunderstanding who is a managing employee and who is a delegated official can stymie those who seek to update their information or now are required to under Medicare’s revalidation program. All Medicare providers will have to revalidate by March 23, 2013. This means verifying all enrollment data. It is essentially filing a new application for enrollment. Only those who have revalidated since March 23, 2011 will be exempt. New regulations as a result of health reform have designated various types of providers in terms of the risk they pose to the program. DME and home health agencies are at the highest level of risk and new applicants are already subject to criminal background checks. IDTFs and physical therapists are a second level of risk. Physician practices are at the lowest level of risk, but IDTFs owned by physicians are treated as IDTFs generally with no preferences or favorable presumptions because they are owned by physicians. In “Medicare Enrollment: A Never Ending High Hurdles Race We have reported the increasing focus of the OIG on quality issues as a matter of fraud and abuse. (See Issues: # 7, #55, #56). In addition, with the advent of many more quality reporting programs and more to come, risks associated with quality reporting-based false claims are also increasing. (See also Issues #63, #64) demonstrating the major emphasis the OIG is now placing on this aspect of its amped up enforcement efforts, the OIG has created a separate web page for Corporate Integrity Agreements that entail quality of care issues. For those who have naysayed our warnings, the writing is on the wall. Everyone should be including these types of issues in their compliance programs, and in the current environment, no provider should be functioning without a meaningful, operational compliance program. As the concept has unfolded from an article in Health Affairs in December 2006, we have expressed skepticism about the implementation of Medicare Accountable Care Organizations (ACOs). The proposed regulations were met with resounding criticism throughout the industry from almost all sides; and the supporting statements, by the Federal Trade Commission on antitrust and the OIG on fraud and abuse, derided both as too restrictive and too lenient. Many forget that this program enacted as part of health reform was never intended to be applicable to most provider groups. At its best, CMS has estimated that 75-100 provider entities will be approved as ACOs. We firmly believe this is a considerable over-estimate even if there is a complete revamping of the regulations. We are not alone. In “Onerous Regs Put ACOs on the Ropes” Alice and Jeff Goldsmith are the principal interviewees explaining why of the 5800 hospitals and more than 780,000 physicians in America, very few will find themselves in Medicare ACOs. That said, the pressures to be accountable for care and what that will require are an entirely different proposition. In “ACOs vs. Accountable Care: Is There A Difference?”, Alice further describes the problems with the Medicare approach, but elucidates the essential activities that are necessary to be accountable for care; and they are activities that providers should be engaged in even if no one pays them differently. Clinical integration has increasingly been discussed as the vehicle to accomplish what is necessary to be accountable for care. But even among those commentators who have gotten beyond the antitrust notions of clinical integration, few really describe the focus of change that can create a truly clinically integrated environment, nor how those changes can make a difference. For some time now, we have touted clinical integration as a way to reorganize clinical and administrative processes of care, particularly among physicians and the other clinicians who work with them, but also in relationship to hospitals. (See issues: #70, #67, #60) Now, Alice and Jim Reinertsen MD, have created a Clinical Integration Self Assessment tool In her article in Medical Economics “Making Clinical Integration Work” Alice focuses on how clinical integration is meaningful to small physician practices. In their brief piece for the Health Forum, “Clinical Integration: Getting From Here to There From its creation by a pro bono inter-disciplinary group of health care experts, many have looked at the PROMETHEUS Payment® model as some theoretical construct of payment. This would be wrong. Pilot implementations under a Robert Wood Johnson Foundation grant have offered practical lessons in using the program on the ground. New pilot programs in Colorado, New York and elsewhere are providing new lessons. In “Transitioning to Value: PROMETHEUS Payment Pilot Lessons Hospital employment of physicians is occurring all over the country. Much of it is comes from completely misguided expectations. There are delusions and fantasies on both sides of these transactions. Physicians hurl themselves on the bosom of the hospital in the belief this will give them financial security while they will be left alone to practice, business as usual. Hospitals, for their part, think this will give them control over physicians, but they rarely do anything with them, particularly the specialists who have recently joined their fold. Many of the finances of these deals cannot work going forward as hospitals confront decreased reimbursement from Medicare and fewer admissions in a quality driven environment. We have confronted these issues before in articles addressing non-acquisition financial strategies between hospitals and physicians and on the right questions to ask and answer before leaping into these arrangements. We fully expect there to be unwinds of many of those transactions which are without content, given physician gripes about employment. That said, these arrangements can work. But the mere existence of a W-2 between the health system or hospital and the physician is not a viable, sustainable approach. Strategic goals, clear targets and benchmarks of behavior from both sides of the table are the only reasonable way for these transactions to add any real value in the changing system. The health reform legislation provides an unprecedented emphasis on quality measurement, quality improvement, efficiency and value. Value is improved quality at lower cost. For providers, changing their clinical processes to meet these new demands will be essential. Both hospitals and physicians will be facing Medicare value-based modifiers beginning in 2012. Hospitals will further face reductions in payment for avoidable readmissions as well as for hospital-acquired conditions. Because the two payment modifiers for hospitals and physicians, although separate, will be coordinated, this generates an extraordinary motivation for hospitals and physicians to work together. In “The New Value on Provider ‘Value'” Alice elucidates the many aspects of health reform that reflect these new mandates. She looks at the restrictions Congress has placed on the ability to use cost in comparative effectiveness analysis as an example of a failure of public policy. The new environment makes it abundantly clear that physician engagement with hospitals will be essential to their ability to produce value. At the same time, physicians themselves will have to find new ways to clinically integrate within their own groups. Hospitals which have now moved significantly into the physician employment arena will have to figure out what to do with their physicians. In their new paper, “Achieving Clinical Integration with Highly Engaged Physicians “Physicians working together, systematically, with or without other organizations and professionals, to improve their collective ability to deliver high quality, safe, and valued care to their patients and communities.” We offer four vibrant examples of very different programs where self-motivated physicians have clinically integrated. We reflect on the ways in which the organized medical staff can actually support and bolster clinical integration; and we introduce a new framework – the Four Fs – to help structure organized thinking about re-visioning the mission of the healthcare enterprise. This paper is a significant resource to our new program of the same title for the Institute for Healthcare Improvement, “Achieving Clinical Integration with Highly Engaged Physicians”. In the last analysis, this is an optimal moment for physicians to step up and take a leadership stance to improve care. The requirements of the Joint Commission Medical Staff Standard 01.01.01 has created quite a furor in some corners. The standards focus on communication and adequate representation by the Medical Executive Committee of the voting members of the medical staff. By giving medical staff members the ability to propose amendments to the bylaws directly to the Board of Directors, the Joint Commission has taken a stand with respect to those unfortunate circumstances where Medical Executive Committees and the members of the medical staff which they represent, find themselves in conflict. Although many lawyers have overblown reactions to these changes, many hospitals and medical staffs are taking this moment of transition to think more explicitly about the role the organized medical staff can play in the new world order of measurement, transparency, value-based payment and clinical integration. Because the medical staff has no reason to exist other than in its support to the Board by advising it on ensuring the quality of care in the hospital, the standards, the culture, and the processes by which this will be accomplished have new momentum. The role of physicians in defining the quality culture Among the very significant fraud and abuse changes in the health reform legislation, Congress made it clear that they expect the regulators to keep bad actors out of Medicare. One of the techniques they will use to do this is the revamped and bolstered Medicare enrollment process. In his new consideration of these issues, “‘Halt! Who Goes There?’: Coping with the Continuing Crackdown on Medicare Enrollment, The Stark statute continues to confound physicians and those who do business with them with its complexity, draconian impacts, and complicated interrelationships with reimbursement rules such as antimarkup and the like. Imaging is an increasing focus of the fraud enforcers. It is not true that all those who engage in imaging services, including radiologists, are exempt from Stark. In a piece written especially for the American Society for Nuclear Cardiology, “Legal Update: Myths about Stark In July 2010, we sent letters to our physician clients Clinical integration has been a vaguely understood
topic since the antitrust regulators introduced the concept
in 1996.
In follow up to our teleconference,
Alice continues her focus on this issue in a new article which
includes how clinical integration within groups may be an important
first step before clinical integration with competitors or with
hospitals. In “Clinical
Integration: it’s back again” As the healthcare industry
has become more complex and more regulated, the role of health lawyers
has become even more important. But, as
originally expounded in her teleconference
for the Reinertsen Group (Alice has taken
this issue further in a direct and hard hitting article for trustees
on how to assess their lawyer’s
judgment. In “How
To Listen To Your Lawyer” The PROMETHEUS Payment® model has been evaluated by RAND researchers in the New England Journal of Medicine to be the only new payment reform approach that actually has the potential to improve quality and save money. Many have wondered what the contracting model would look like for the relationship between plans and providers to make PROMETHEUS Payment® possible. Now, Alice has created a contract template which is described in a PowerPoint and recording she did for PROMETHEUS Payment® pilot sites which makes it clear that it is not necessary to re-contract the network. Simple amendments can accomplish the task. That said, there are elements of ordinary managed care contracts which would have to be suspended for the PROMETHEUS Payment® model to work. As the concept of “Accountable
Care Organizations”
and moving to “The Clinic Model” have captured
the fancies of a number of small and large hospital systems around
the country, Alice with Jim
Reinertsen, MD explores the real questions that should
be asked and answered before health systems and physicians leap into
these
often ill-defined strategies.
In their piece “Informed
Consent to the Ties That Bind” While specialists are seeking employment by health systems, health
systems are forming multi-specialty groups and the billiard balls
are repositioning themselves throughout the country, the illusion
that health system employment of physicians will solve alignment
problems going forward is unfortunately far too simplistic for the
current state of affairs. In her new HEALTH LAW HANDBOOK chapter, “Avoiding
Marriage: Hospital and Physician Non-Acquisition Financial Strategies” In his new chapter for the 2010 HEALTH LAW HANDBOOK,
Dan Shay explores the rapidly intensifying issues associated with
significantly increased
quality reporting. We now have evidence that
where the stakes for reporting go up, bad behavior will arise “Physician
and Hospital Quality Reporting Fraud: Risks and Compliance Techniques” Alice Gosfield has been a Key Author for West Group since 1989. In addition to the HEALTH LAW HANDBOOK, which is a new book every year, she also has revised and revamped MEDICARE AND MEDICAID FRAUD AND ABUSE which is updated every year. It includes a chapter on investigations by Kevin Raphael. Now, in an interview with the publishers, she describes her entry into health law, her views of its future, and her current work on the PROMETHEUS Payment® model. The fraud enforcement armamentarium is growing. Congress has put more weapons in the hands of enforcers and has opened new pathways for whistleblowers in the Fraud Enforcement and Recovery Act (FERA) of 2009. This law expands who is subject to false claims liability and changes the knowledge standard. Of potentially greater significance, it turns failure to repay an overpayment into a false claim. In her teleconference “Que FERA FERA: The Need for Updated Compliance Programs” Alice explains the law, elucidates its special significance for Stark law violations and offers practical guidance to buff up compliance programs to meet these very significant new challenges. Reporting quality performance is part of the Medicare move toward improved quality and better transparency. As the stakes for reporting increase with higher financial penalties for failure to report (see issues: #56, #61, #62) as well as for bad results, the likelihood for fraud associated with those quality reports go up. This potential has now been realized where a physician altered medical records of hospital patients after they were discharged. These are hospital self-reported measures which drive scoring for hospitals to be listed on the CMS website Hospital Compare. The hospital discovered and revealed the problem itself, but this type of behavior highlights the need to include quality reporting of many kinds in the compliance program for the hospital as well as in compliance programs of physicians reporting for pay for performance and PQRI payments. “Incident to” principles in Medicare have confused providers for years and have confounded regulators. This topic has appeared repeatedly in the OIG’s Work Plans, but efforts to revise the rules have failed to come to fruition. Now the OIG has finally issued a report criticizing the “Prevalence and Qualifications of Nonphysicians Who Performed Medicare Physician Services”. It has always been the case that for payment of any personnel under Medicare you must first comply with state law. But this report chastises the fact that many state laws permit physicians to delegate tasks to non-licensed individuals whom they supervise. As long as that relationship complied with the ‘incident to’ standards which require that a physician be on premises while the personnel render services in a course of treatment directed by the physician, such delegation is consistent with Medicare law. The OIG was not amused. “Nonphysicians performed almost two-thirds of the invasive services that Medicare allowed the physicians. An invasive procedure involves entry into the living body (as by incision or by insertion of an instrument). Nonphysicians performed almost half of the noninvasive services that Medicare allowed the physicians. Unqualified nonphysicians performed 21 percent of the services that physicians did not perform personally.” These nonphysicians did not possess the necessary licenses or certifications, had no verifiable credentials, or lacked the training to perform the service. It is unclear how the OIG came to these conclusions, but they recommend that everyone be compliant with state law (hard to argue), that incident to services be identified by a modifier (this has been done before) or that physicians be required to perform all services requiring licensure (this will bring medical practice to a halt). That said, we can expect in the current environment of pressure to save money in the program that ‘incident to’ services will become a target. Physicians are well advised to revisit their use of ancillary personnel under state law and the Medicare program rules. When Medicare announced its program to not pay hospitals for ‘never events’ it was not at all clear how that would affect physician payment. Now CMS has published a Transmittal announcing that for at least three of the conditions, there will be no payment to physicians for these quality failures either. Accountable Care Organizations (ACOs) first got play as an idea in December 2006, in an article in Health Affairs by Elliot Fisher of the Dartmouth-Atlas (and colleagues) -- “Creating Accountable Care Organizations: The Extended Medical Staff”. The original idea was that hospitals should be measured for the performance of their physicians, including those who never admit and never attend there. How hospitals were to get access to what those physicians were doing, or how they were to influence their behavior was unclear, but the basic idea was that there is a continuum of care to which physicians and hospitals contribute, and it is worth measuring the results of their connections, even if the only connection is referral. This was really part of a larger discussion in multiple articles in a themed issue of Health Affairs, about the demise of the organized medical staff, criticized by multiple commentators as a moribund, obsolete institution. By January 2009, in “Fostering Accountable Health Care: Moving Forward in Medicare”, Dr. Fisher and colleagues, now including Mark McClellan, formerly chief of CMS, were focused more on how these organizations or arrangements could create shared savings for hospitals and physicians, while they were being held accountable. As more skepticism was expressed regardi ng the likelihood that these organizations would be widely implemented, six months later, in “Achieving Health Care Reform: How Doctors Can Help”, Dr. Fisher joined with Don Berwick of the Institute for Healthcare Improvement and Karen Davis of the Commonwealth Fund, to declare, among other things, that these might be virtual organizations and which would help slow spending growth. There were still plenty of questions about what these things might be since some had cited organizations such as the Mayo Clinic as an ACO, while others referenced the regional health information organization in Grand Junction, CO as an ACO, while still others cited Geisinger which is not only a provider system but has its own health plan. Those are three very different kinds of entities. As the health reform debates intensified, the debate between proponents and critics of ACOs also peaked. Jeff Goldsmith called them “Not Ready for Prime Time” since the basic idea of setting a budget for a community of care clustered around a hospital, didn’t work in the early 1990s and won’t now. McClellan and McKethan defended the idea as essential to Medicare’s moving away from volume-driven care, citing examples of fully integrated delivery systems. The following quote is their best cut at an explanation of this fast morphing concept: “Accountable care organizations (ACOs) are provider collaborations that integrate groups of physicians, hospitals, and other providers around the ability to receive shared-savings bonuses by achieving measured quality targets and demonstrating real reductions in overall spending growth for a defined population of patients. ACOs can be organized in a number of provider configurations with different payer participants. They can also feature different payment incentives ranging from “one-sided” shared savings within a fee-for-service environment, to a range of limited or substantial capitation arrangements with quality bonuses.” Sounds to me like a super-duper-gainsharing-PHO, but bigger. Been there. Done that. Watched the squabbles over money between hospitals and physicians, not to mention primaries and specialists. But wait, yet another new study on “How To Create Accountable Care Organizations”, puts all the emphasis on primary care, with hospitals as a secondary focus, moving to community-based measured care. Clearly the concept is in flux and really isn’t about organizations at all, but approaches to delivery of care. That’s what I get at this point. If this concept survives the legislative debates, one can only hope that at most it is yet another in the plethora of pilots of the new, new thing which Congress wants to try and not mandated. Experimentation is good. Required reorganization is not. The improvement of quality throughout the United States continues to be a major part of the health care debates, along with better control of costs and waste. In that context, clinical integration has re-emerged as a mechanism to achieve these dual results. This is interesting since many believe that the goal of clinical integration is for providers to negotiate higher fees with payors. This is because the concept emerged as part of the antitrust safety zones published by the FTC and Department of Justice in 1996. There have been many settlements [see links #6 (4 and 5)] where the FTC said, “This might have been OK if you’d been clinically integrated.” The concept has been further clarified by its principal author [see links #6, 7 and 22) but it has not been described frequently in the literature. In part this is because the utility of clinical integration to facilitate better, more efficient care has been barely explained by antitrust lawyers, who do not live in the world of quality improvement. Clinical Integration: It’s Not About Antitrust is our teleconference describing the advent of clinical integration, the context for it, what it means, and how to do it. While there is a role for antitrust lawyers where otherwise competing providers come together to negotiate for fees, the concept of clinical integration is very similar to the principles set forth at www.uft-a.com, and is applicable within physician practice groups. Moreover, it is probably essential for groups to look at the extent to which they have deployed these principles within their groups before they go looking to affiliate with others. Still, to come together around quality even if no one pays you differently is more and more critical as physician groups feel the pressure to improve their financial margins as well as their quality performance. Many providers are skeptical that the government really enforces the Stark statute. In a first of its kind settlement, Covenant Medical Center in Iowa agreed to pay the government $4.5 million to resolve false claims act allegations originally lodged by competitors of the physicians the Medical Center had recruited and to whom they were paying extremely high salaries as employees. The really unusual aspects of the settlement were that it was with the Department of Justice which cited the Stark statute violations as the basis for the settlement because the salaries were the highest in Iowa and among the highest in the United States for physicians. The US Attorney has refused to reveal what he used to determine fair market value but he did not cite MGMA compensation data as the basis for the determination. The Stark statute requires fair market value for a bona fide employment relationship compensation to qualify under the exception. From clinical integration, to accountable care organizations, to significantly increased attention to fraud and abuse, there is a lot of volatility afoot. Yet, there are laws on the books including Stark and the antikickback statute, which have the ability to impede true change. At the same time, there are many who over interpret these laws and do not undertake initiatives that they could. In June 2009, at a ninety minute session at the American Health Lawyers Association Annual Meeting, at the request of Lewis Morris, Chief Legal Counsel for the OIG, and Vicky Robinson, his deputy, I joined them in a discussion of innovation in healthcare in light of program integrity demands. This was their idea, and an effort to confront what Lew calls ‘the Goldilocks paradox” --- how to find the balance between enforcing the laws on the books to protect the public programs, but without stifling innovation and improvement. I can now make this presentation available for free as an MP3 recording that you can access from my website. www.gosfield.com We do require that you register to listen to the discussion. They present their philosophy of enforcement and we discuss very specific, innovative techniques – like hospitals paying physicians for quality results, clinical integration, physician compensation for quality within groups and much more. Lew and Vicky deserve real credit for being so open and receptive in these discussions. I was honored that they asked me to be the voice of the industry with them. We had fun doing it and I think it is highly substantive. My thanks to the Health Lawyers, which for thirty-five years of my career has provided me more value for my professional dollar than any other dues I pay. For those of you who are not lawyers, you need not be one to either join the organization, make use of their resources, or buy their materials. For the entire 2009 Annual Meeting program which had other great presentations For other publications. Lawyers offer special expertise which health care providers need in order to function in their highly regulated contexts. In addition, the special liability problems faced by those providers who do not meet the standard of care, merit careful attention to risk management. But increasingly, we see hospitals who are held captive by attorneys who needlessly scare them about compliance and liability risk. There are increasing tensions in this regard in the new world of quality transparency. We see lawyers advising physicians in so restrictive a way as to impinge on their ability to function as business entities. We see lawyers who over-estimate the nature of compliance problems and recommend potentially more risky efforts to fix them. After 35 years of working in this area, Alice can say, without limitation, that older lawyers offer more seasoned and reasoned advice than younger ones. Young lawyers get hysterical and rigid about things which do not merit such anxiety. In addition, too many lawyers of all ages over-control the situation where, mostly, the risks are purely the client’s to take. On the other hand, it is not well understood that lawyers advising health care providers, and particularly boards of trustees, have personal liability, not only for what they do, but increasingly for what their clients do. This cannot help but influence the way they give advice. Still further, the context for the relationship between attorney and client can also color the way advice is given. What is the lawyer’s liability and how do we take that into account? Does a member of the law firm sit on the board of the hospital? How important are we as a client to the firm advising us? How does that affect what we are hearing from them? How did the in-house counsel pick the attorney she is recommending for a technical issue? What kinds of information should clients ask to assess the advice they are getting? Finally, are there certain kinds of issues on which the lawyer should be taken more seriously than others? These matters are never discussed openly – at the board, between the client and attorney, or by attorneys themselves. Alice is taking this issue on in a new webinar that addresses “When Should You Listen to Your Lawyer?” Aimed at hospital trustees, the issues she poses are relevant to all clients in the health care industry. For the 2008 Medicare Physician Fee Schedule (MPFS), Medicare published rules with regard to the prohibition on marking up diagnostic testing which became effective January 1, 2008. On January 3, they were ‘suspended’ until the end of the year. With the 2009 MPFS, they were republished in final form offering two tests as to whether the prohibition is applicable: (1) whether the supervising or interpreting physician spends 75% of his time with the group; and if so, then there are no further restrictions to consider; if he does not then (2) whether the location where the service is provided is co-located with the office of the ordering physician, where that physician provides substantially the full range of his services on a regular basis. This is more restrictive than Stark; and it applies to all diagnostic testing, not just Stark DHS. Stark is about whether the service can be provided and be covered by Medicare. The anti-markup rules are about how much the billing entity can charge. The calculation of the ‘net charge’ when the prohibition does apply, if not obtained on a ‘per transaction’, ‘per click’ or ‘per study’ basis, is metaphysical at best. These rules relate to, although were not published with, the rules under Stark on “under arrangements” which also now extend far beyond the traditional hospital setting to all arrangements where a physician owned entity furnishes DHS to another entity which bills the DHS to Medicare --- most particularly, but not exclusively, hospitals. Rather than an AGG Note, for these developments Alice has used a teleconference addressing “Anti-Markup and Under Arrangements: Stark Beyond Stark” which can be purchased as an MP3 recording to listen to at your leisure, along with the handout which was distributed to conference attendees. CMS has been tinkering with
the Medicare enrollment process for
years. As part of the increasing fraud and abuse prevention arsenal,
the theory has been that if they gather more information
at the outset, they will be able to weed out ‘bad actors’ from
obtaining access to Medicare dollars. As a result, the burdens in
applying have multiplied; and now they have severely limited the
ability to reach back in time to bill retroactively for claims which
have accumulated pending approved enrollment. Worse yet are the burdens
on already approved providers to update Medicare when there are changes
in various aspects of their operations, ownership and more. Some
of the rules are confusing. You don’t have to tell them that
you employ physician assistants when you enroll, but you must notify
Medicare if you terminate a PA! In his chapter in the 2009 HEALTH
LAW HANDBOOK , “Enrollment
in Medicare: Fraternity Hazing or Keeping Out Bad Actors? In 2006, Congress enacted the very beginnings of a physician quality payment program. Too timid to actually pay physicians for better quality results, the Physician Quality Reporting Initiative (PQRI) is not even a pay for performance program, but a pay for reporting program. The actual quality of the care delivered does not matter. In essence it is the Physician Whatever Reporting Initiative. The number of measures to be reported has grown significantly. Many who reported in 2007 found that they did not get the proffered 1.5% bonus payment. CMS itself reports that little more than half of those who reported first received bonuses. The average payment was $600 per provider and $4,700 per physician. For 2009 the number of measures increased yet again. While this increases the chance to say something to get more money, the real problem is that it is not about quality, and only adds to the administrative burdens with which physicians are already struggling. Under the Stark statute and
regulations, there are significant restrictions on how hospitals
may pay physicians or provide financial benefit to them. In today’s
environment of increased demand for quality performance, paying physicians
for their contribution to hospital quality performance is increasingly
a sought after technique. In the proposed update to the 2009 Medicare
Physician Fee Schedule (MPFS), CMS asked for comments on how they
should approach gainsharing (“shared savings programs”)
and quality performance payments (“incentive payment plans”).
Alice responded with comments
on the quality payments When the time came to actually publish an exception
that would address these issues, the regulators waffled. Instead
they posed 55 specific questions about how to regulate these
programs. There are many ways in which the Stark
program is out of control The Medicare physician reimbursement
program has been criticized, for years, as a fee-for-service program
which, by definition, incentivizes physicians to overuse because
the more you do the more money you make. In addition, there is no
question that Medicare quality results have lagged, as quality results
across health care have failed to reach optimal levels. In her polemic
in the 2009 HEALTH LAW HANDBOOK, “Getting
The Team Paid: How Medicare Physician Payment Policies Impede Quality The organized medical staff has a unique role in assuring the quality of care in hospitals. Yet the volunteer medical staff members are under unprecedented pressures which inhibit their willingness to take on tasks they traditionally have performed for free – whether medical staff leadership, service on committees, or on-call and indigent care coverage. Now, there is some data showing that throughout the country, there is an emerging bifurcation into alternate models of medical staff-hospital relationships. (See, Casalino et al, “Hospital-Physician Relations: Two Tracks And The Decline of the Voluntary Medical Staff”, Health Affairs (Sept 2008). Where in the era of post-failed Clinton health reform, hospitals bought primary care practices and then had to unload them, more and more hospitals today are acquiring specialist practices and employing specialist physicians. Equally present are the settings in which members of the medical staff go into competition with the hospital and cease to attend there as much as they used to, while they own and develop ambulatory surgery centers, imaging facilities and even whole specialty hospitals. What is the significance of this for medical staff governance and quality surveillance? These changes in organizational arrangements really ought to have little meaning to the functioning of the organized medical staff in relationship to the hospital board and administration with regard to its principal responsibilities for quality. The medical staff members, whether employed or independent or more typically a mix, still have a unique role in the hospital. Some commentators have taken the position that the organized medical staff is obsolete if not moribund. We believe they may be wrong; although it is becoming increasingly important to consider carefully just what the function of the medical staff ought to be in the highest quality environments. If 20% of the medical staff is responsible for 80% of the hospital admissions, then who should be considered Active Staff with governance authority to make the rules for the interrelationships among all physicians? Who should define the quality culture for physicians? If the hospital employs the physicians and mandates their participation in activities that fundamentally do not interest them, what will be the outcome for patients? If the medical executive committee is focused on internecine warfare, endovascular food-fights and not how many hearses leave the hospital and why, what will the hospital do without a medical staff on whom it can rely to create a high quality environment? We think these are essential questions which merit the attention of hospitals, their boards and medical staff members. We do not believe that employment of medical staff members ensures an engaged medical staff which will work well on quality issues. We think that the current moment in quality policy and demand for demonstrated hospital quality performance offers an unprecedented opportunity to reinvigorate the role of the medical staff around issues that really matter. Since the inception of this website
we have highlighted the inexorable movement of fraud enforcers to
direct targeting of quality problems as fraud. (See, link
to (3) #56, #45)
When the AHLA and the OIG published joint guidance to hospital boards
on their fiduciary
responsibilities for quality it was clearly game on! We have
highlighted the quality-compliance
nexus in
the past as well. The rules of the game have so intensified, however,
that we now believe that it can be said that a major goal for all
health care providers in the 21st century will be “Avoiding
Quality Fraud The Medical Home, sometimes referred to as the “Patient-centered Medical Home”, despite sounding like a website or new kind of residential facility, is gaining traction as a route to reorganizing the delivery of care to certain populations. Finding its foundation 40 years ago in pediatrics, it is now touted as the answer for primary chronic care improvement as well as payment. A recent search for those who are very successful with these programs has led Arnold Milstein MD, to draw some interesting conclusions about what makes for a “Medical Home Run”. Unwavering commitment to keeping patients out of the hospital is key. By the same token, though, a recent issue of Health Affairs has looked at a variety of controversies and claims regarding the medical home, from differences in its definition and components, to whether those who might be most interested in offering the medical home model in fact have the infrastructure to do so. Rittenhouse, Casalino, et al, found that large medical groups were better prepared with elements of infrastructure alone (e.g., patient reminders, physician feedback, electronic records and more) to offer this approach to organizing care delivery, but even they were not routinely ready to do all that the medical home model promises. In reviewing the claims for this model, it appears there are two movies currently playing in local theaters: Medical Home: The Clinical Movie --- which is about organizing care delivery to be sure patients can rely on a single practice to be accountable for and responsive to their needs across the continuum of care delivery; and then there is Medical Home: The Payment Movie. Here the story is yet another transitional approach to curing the dissymmetry between high quality, patient-centric clinical processes and current payment models. Medical Home: The Payment Movie seeks additional dollars to pay for the infrastructure which makes coordination of care possible. In fact, were additional payment to be made for intrastructure alone, there is no guarantee any change in quality would result. Still, it is indisputable that it costs money to implement infrastructure that makes a medical home possible --- to use non-physicians to help engage patients in their own care, maintain registries and other electronic data to foster clinically important interactions with patients and to keep tabs on the care they are getting. The PROMETHEUS Payment® Model (www.prometheuspayment.org) is highly consistent with the Clinical Movie script and is even better than the transitional, small-additions-to-current-payments storyboard of the Payment Movie. Also intriguing is the application of the medical home clinical approach to other types of care, like hematology-oncology. Those physicians are losing their business model based on drug payments and ought be paid for the care and coordination that are the core of what they do. Infectious disease physicians have similar issues, as do rheumatologists treating arthritics. The basic premise of the Clinical Movie is not only viable for primary care. It deserves consideration elsewhere. Elements of it are consistent with UFT-A principles as well. www.uft-a.com The fraud and abuse
liabilities which lurk in inadequate quality performance have been
highlighted on this website since 2003
with an AGG Note and
later Alice's article in The Journal of Health Care Compliance, “Doing
What Matters.”
From Jim Sheehan’s first public statements on his priorities
regarding quality enforcement,
to the first OIG settlement based on quality
failures,
to Sheehan’s 2006 PowerPoint enumerating
the many ways in which quality will be the foundation for fraud enforcement,
the weight of punitive attention is increasing. Now, with the OIG's
published statements regarding
Board
responsibility for quality in hospital, Recognizing the need for a far better appreciation of these risks in the hospital community, Jim Reinertsen and Jamie Orlikoff invited Alice to provide the core content for a webinar to elucidate the context for quality fraud and, more importantly, to provide practical guidance on coping with this new compliance imperative. This program, first presented in June 2008, has now been updated and made zippier (one hour instead of 90 minutes) and was offered in March 2009, with a recording available. First convened in December 2004
as a disparate group of experts intending to design a new payment
model, PROMETHEUS Payment® Inc.,
was awarded a $6.4
million grant from the Robert Wood
Johnson Foundation,
to develop a scorecard, refine the concepts and most importantly
test the program in four pilot sites across the country. Having modeled
its first Evidence-informed Case Rates™ for actual implementation
beginning in 2009, the results are quite stunning. In her plain language
article, “Making
PROMETHEUS Payment® Rates Real: Ya’Gotta’ Start Somewhere With her study of the current identified
effects of P4P, traditional compensation models within physician groups,
survey of groups which do
compensate on
quality and consideration of the legal issues in doing so, Alice
opened
the door to focusing on this aspect of motivating quality improvement.
In her article, “Compensation
for Quality: The Next Inevitable Step The regulations now referred
to as “Stark III” have
added to the complexities of Stark compliance, but do not require
major reorganization of business or delivery relationships. There
are many opportunities for hospitals to help physicians with their
business case, including paying for quality performance, which
is particularly intriguing in light of the widespread emphasis on
measured
hospital quality improvement. In her two part article “Stark
III: Refinement Not Revolution”, Alice first identifies issues
associated with Stark
as applied within physician groups The challenge of engaging physicians in quality
initiatives at the hospital often falls most heavily on the shoulders
of the
medical leadership in the C-suite, whether the chief medical officer
or the VPMA or the chief of staff. In their article directed to
these folks, “Finding Common Cause
in Quality: Confronting The Physician Engagement Challenge A case decided in the Commonwealth Court of Pennsylvania has taken the quality-payment nexus further without any “never event”, or a finding of fraud, or even a bad outcome to the patients involved. In Pinnacle Health System v. Department of Public Welfare (2008 WL 140985) the hospital appealed from payment denials affirmed by the Bureau of Hearings and Appeals. The Medicaid agency denied payment for psychiatric hospitalizations where the patients were not seen by a psychiatrist on a daily basis. The hospital argued there was no regulation requiring it. The agency argued that this failure caused care to fall below the regulatory requirement that care be rendered in accordance with "accepted medical treatment standards." Both sides had experts -- the hospital's testifying to the fact that daily visits were not medically necessary, the agency's that daily visits were the standard of care. While the standard of judicial review for administrative purposes was whether the determination by the agency was supported by substantial evidence, the court held that even though the standard of ‘accepted medical treatment standards’ was general, it was not improperly vague and did put providers on notice of what was expected of them. Considering (1) standard managed care contract language regarding treatment in accordance with accepted standards of care, (2) the burgeoning expectations that American health care should be provided at higher levels than it is, (3) increasing fraud and abuse liability for quality failures and (4) that malpractice caselaw which addresses the standard of care has imposed as the standard of care treatment regimens not widely applied, the Pinnacle case offers a tightening view of the quality imperative. Without a finding of malpractice, fraud, or a “never event” payment denial for failure to deliver services properly is a new reason to do the right thing at the right time in the right way. Pay for performance is sweeping the country. Despite equivocal data as to success and impact, most payors regard it as inevitable, and most physicians are resigned to its arrival soon at a theater near them, if they are not already confronting it. Medicare’s ‘pay for quality reporting’ initiative really is “pay for whatever I did” because it is the completion of the form, not the quality of the care, which gets the payment bonus. CMS was met with a tepid enrollment of 17% of potential participants. And that program is not limited to physicians, but includes other non-physician practitioners as well. While these initiatives continue to be touted as ‘payment reform,’ on the other side of the ledger, both CMS and many health insurance programs are adopting no pay for no performance programs by denying payment for never events -- mishaps of such an egregious nature that they never should have occurred in the first place. Hospital associations have stepped forward to say their members will not bill for such events including wrong site surgeries, retention of foreign objects after surgery, death or disability associated with wrong type blood transfusions. First promulgated by the National Quality Forum in 2002, the list of the initial 27 “never events” is not without controversy, since a range of the conditions cited include matters which may have been present on admission (decubitus ulcers). Medicare has proposed to add conditions to those it already requires to be reported and on which it will not pay for the care devoted to treatment of the event or complication. There is some question as to whether this approach will be applied to physicians. In the PROMETHEUS Payment® model, a readmission for something related to myocardial infarction within thirty days of discharge is considered a potentially avoidable complication for both the physician and hospital. In a very different spin on ‘quality’,
this year marks the 20th anniversary edition of the Health Law Handbook.
The book was identified as unique, even in the annals of Thomson
Publishing Company, the parent of WestGroup, which now publishes
the book – having been the purchaser of the big fish that ate
Clark Boardman which first put it out in 1989. WestGroup noted the
longevity of the book, and the challenge of having one author for
all 20 editions. When the privacy regulations were first adopted back in 2003, there was considerable anxiety among the provider community, and particularly physicians, with regard to the administrative burden of compliance and intrusion in the doctor-patient relationship that would come from the empowerment of patients to complain to the Office of Civil Rights regarding violation of their right to privacy. The OCR has now published data regarding enforcement of HIPAA privacy complaints and there can be no doubt that the number of complaints has indeed gone up substantially. In 2004, the first full year of the program, there were 6500 complaints filed. By 2007, that number had increased to more than 8100. But this is the grand total of all complaints received from all sources throughout the United States of America! Hardly a tsunami of privacy violations. The data on the website reports complaints filed by state and their resolutions. Although the ratios have changed slightly, more cases are determined to have no violation today, than four years ago. By far, most of the complaints are resolved on investigation and review and do not proceed further (69%). Of the cases that proceeded to investigation, last year produced almost 1500 ‘corrective actions’ (type unspecified) and a larger number (750) than before were found to have no violations. The ability to get proper on call coverage for the hospital emergency
department is a growing challenge for community hospitals as documented
by the Center for
Health System Change.
Specialist physicians have become increasingly fearful of serving
on the on-call rotation given increased liability and larger numbers
of indigent and uninsured patients. Medical staffs around the country
have reduced the requirements for physicians on the medical staff
to perform this function, which long was seen as the physician’s
professional responsibility, which in earlier times they fulfilled
without much complaint. To cope with this problem, hospitals have
developed a range of strategies which the center identifies in their
report. Now, for the first time, the OIG
has issued an advisory opinion Clinical integration is a technique
by which independent physicians and group practices can relate to
one another for quality
and still
bargain collectively over price with managed care plans. Cited by
the FTC in virtually every settlement with IPAs and combinations
that bargained collusively over fees, the indicia of proper clinical
integration have not been well defined. Some settlements and one
Advisory Opinion, now
almost six years old, have staked out some of the turf, but most
of what the government has reviewed, it has always seemed, were activities
that have been motivated more by price than quality improvement.
The lack of clear guidance has led the American
Hospital Association to call on the FTC and DOJ for greater specificity The change in the JCAHO Medical Staff Standard to require that the medical staff bylaws be an integrated document has created a firestorm of controversy that should be less than a tempest in a teapot. Prediction of expensive disasters in redrafting bylaws, and arguing over what is process versus what is procedure, is absurd and fomented by a cadre of law firms who have made significant income from advising medical staffs and hospitals that the bylaws should be divided up into five different sections so that they may be more easily amended. The Medical Staff Bylaws are the Constitution of the Medical Staff and should be amended about as easily as the US Constitution is amended. We have written and advised on medical staff bylaws for more than 100 medical staffs all around the country over the last 30 years, and this is not all we do, as it is for some firms. We have never advised a medical staff to disaggregate their bylaws. The other noteworthy change adopted by the Joint Commission for 2009 was that the medical staff should have the right to propose medical staff bylaws changes directly to the board. This should be non-threatening unless you have a renegade medical staff or a renegade medical executive committee where the representative function of the MEC has broken down. It would be the board’s responsibility to sort this out if the medical staff asked for changes, not recommended by the MEC, that were not in the best interests of the hospital. Everyone should calm down about these feared power struggles and focus on the real purpose of the medical staff, which is to be responsible for quality in the institution. When organizations do that effectively the medical staff can become more galvanized for a far better purpose than internal turf and power struggles. In October 2007, the US Attorney in New Jersey entered
into deferred prosecution as well as settlement agreements with six
device manufacturers
who had paid physicians purportedly to advise them regarding the
development
of new devices.
Unfortunately, many of these were apparently no show jobs. But in
reading the settlements and corporate integrity agreements, while
the manufacturers agreed to cease what the government found to be
illegitimate relationships with physicians, the government did recognize
that paying no more than $500 an hour to physicians to perform real
services advising these companies would be permitted. This specifically
acknowledges that device manufacturers do have a legitimate need
for input from practicing physicians who might use their products.
There are many myths about how device manufacturers and physicians
may relate to each other. In “Physician
Investment in Start-Up Device Companies: Debunking The Myths”, The last five years have heard
a relentless call for information technology dissemination to improve
quality and lower costs in health
care. Electronic health records (EHR) have been touted as the first
and most important step to a real technology revolution. For physicians,
though, the cost of EHR implementation has often proven prohibitive.
The Stark and anti-kickback protections for donated medical records
was expected to jumpstart this effort. Not so fast. In his consideration
of downstreamed
EHR licenses Alice Gosfield and James Reinertsen
MD have been working on techniques to help physicians and hospitals
work better together
to improve
quality. In their white
paper for IHI Pay for performance programs
show no signs of abating in popularity, yet their impact remains
equivocal. Whether quality would be better
if physicians within groups also paid themselves based on quality
performance is unknown. If the incentives of P4P are to have impact,
how are those monies distributed to the individual physicians once
the group gets paid? There is virtually nothing in the literature
on point. In “Physician
Compensation for Quality: Behind The Group’s Green Door On December 5, 2006, Health Affairs published a web exclusive series of articles offering some fascinating perspectives on hospital-physician relationships which are particularly relevant to physician engagement with hospitals around quality. Berenson, Ginsburg and May observe that physicians have increasingly become competitors of the hospitals which were formerly their most valued “significant others”. Fischer, et al. argue that hospital quality results should be measured to include the “extended hospital medical staff” which would take in physicians who refer to the facility but never set foot in it. Wilensky, Wolter, and Fischer present a new spin on gainsharing as a way to meet the ever elusive goal of “aligned incentives”. Smithson and Baker contend that the medical staff organization itself is a moribund anomaly and not worth accommodating at all. Goldsmith offers a view of the medical staff as a Darwinian coral reef with predators and prey; while Cortese and Smoldt claim that legally integrated hospital-physician entities are the only hope for the future. The provocative juxtaposition of these articles reflects the intensity of interest in the intersection of physicians’ economic behavior with the hospital’s status as an institution where most of the activities are driven by physician orders. All acknowledge that improved medical staff-hospital relationships are indispensable in today’s world. Our work takes the position that the structure of these relationships
is not the issue at all. Too much time of lawyers and accountants
is spent constructing financial transactions that will bond the physicians
to the hospital by generating revenue for them. There is no question
that paying them for some activities is useful. Rebuilding trust
where it has broken can sometimes begin with a good business deal.
But, from the IHI
program and white
paper The increasing emphasis on quality
as a basis for fraud and abuse enforcement is now clear. Yet many
compliance officers are not integrated
into the quality activities of the organizations they serve. In her
viewpoint on “Doing
What Really Matters: The Compliance Connection to Quality Among the many strategies for closer alignment between hospitals
and their physicians are the proliferating joint ventures and financially
driven exercises, including gainsharing, that are intended to capture
with more revenues the loyalty of the medical staff members who are
involved. In an editorial in a recent issue of the Journal of Oncology, “Physician-Hospital
Partnerships: What Really Counts? The PROMETHEUS Payment® model is designed
explicitly to reward clinical collaboration among otherwise independent
providers. Since 30% of
any provider’s scores will turn on the performance of all the
other providers treating the patient for that condition, and scores
determine the totality of the payment a provider can receive, there
is a real reason to pay attention to the web of referral relationships – from
whom you take referrals, to whom and where you refer. Even when the
optimal moment for referral occurs would be an important point for
agreement among clinicians – whether primary care to specialty,
vice versa or among specialists. In fact, much of what PROMETHEUS
Payment® would reward, providers should be doing anyway. In her article “ The Ventura County California hospital-medical staff case generated a firestorm of controversy regarding board involvement in medical staff governance before it was eventually settled. The parties had very intense views regarding the matters at hand. (See the views expressed by the the attorneys representing the physicians). Subject to significant physician advocacy, the California legislature enacted a law establishing the medical staff’s right of self-governance in the most explicit terms ever . Specific topics statutorily reserved to the medical staff include selection of clinical criteria and standards to oversee and manage quality assurance and other medical staff activities, selection and removal of medical staff officers, and the right to retain and be represented by independent legal counsel. In case of any dispute on these issues, the medical staff and hospital governing board are obligated to meet and confer in good faith to resolve the dispute. Astonishingly, though, the statute says that when any person or entity is even about to engage in acts or practices that hinder, restrict or obstruct the ability of the medical staff to exercise its rights, the superior court “on application of the medical staff” may issue an injunction. (West’s Ann. Cal. Bus. & Prof Code §2282.5). While acknowledging the ultimate authority of the hospital board to protect the quality of medical care and competency of its medical staff, the legislature explicitly stated that their final authority may only be exercised with a reasonable and good faith belief that the medical staff has failed to fulfill a substantive duty pertaining to quality of patient care. Many commentators have characterized this legislation as establishing
that the medical staff must be considered an independent legal entity.
For many reasons this would be a disaster, although there are physician
advocates that have long called for this approach in the form of
incorporating the medical staff. Certainly the medical staff counsel
in the Ventura case makes that argument. We do not read the statute
as requiring that the medical staff be seen as an independent entity
and will be keenly interested in how it is interpreted by the courts.
The new possibilities for liability where a medical staff is separately
incorporated are significant: If it will then be able to conspire
with the hospital board under antitrust principles pertaining to
credentialing. It will have its own separate malpractice liability
for negligent credentialing. It would not be protected under the
hospital’s own director and officer’s liability insurance
but rather would have to obtain its own. The full interpretation
of the statutory provision is not yet known; but for medical staffs
which act responsibly to surveil the quality of care in the organizations
to which they direct their attention, the decision to incorporate
should not be lightly taken. While ‘bad cases make bad law’,
the essence of this law is not bad. It’s interpretation in
already difficult circumstances could create serious consequences.
In the last analysis, the extremely critical role of the organized
medical staff for quality assurance and particularly among their
peers, is strongly supported here. How to change the way medical
staffs and hospitals interact around quality is the key challenge
for hospitals of the future and a substantial theme in our work.
(See “In
Common Cause for Quality”, “Engaging
Physicians in a Shared Quality Agenda”, “W(h)ither
Medical Staffs?” The issue of how physicians can collaborate effectively
when two specialties seek to perform the same services has presented
increasing
challenges in many contexts. A classic problem area with regard to
this is the advent of coronary computerized tomographic angiography
(CTAs) performed by cardiologists who generally do not read the full
chest cavity. In contrast, radiologists frequently hold exclusive
privileges at the hospitals at which they practice and are not as
intensely focused on cardiac organs. The American College of Radiology
asked us to provide them with a white paper elucidating potential
reimbursement liabilities associated with splitting these interpretations.
That white
paper Hospitals and physicians have tried to collaborate more effectively through bonding, purchasing, owning and managing. Virtually none of these initiatives has improved quality of care. In addition, the rise in economic credentialing, conflicts of interest policies and disclosure of ‘competing investments’ further entrenches the parties as disparate stakeholders. In her work with hospitals and physicians in common cause for quality, Alice Gosfield has focused on the negative effect of these initiatives. Frequently, overly conservative attorneys contribute to mythologies pertaining to the impact of Stark and the anti-kickback statute on these issues. In an article jointly written with Jim Reinertsen, M.D., for Hospitals & Health Networks Online, they debunk these myths and offer strategies for more collaborative, quality-enhancing relationships. The second part of the presentation describes how PROMETHEUS Payment® can further these relationships by supporting with a different payment system efforts that hospitals and physicians ought to be involved in any way. In the 2007 Medicare Fee Schedule, the interrelationship between the Stark in-office ancillary services exception and the Medicare reassignment rule has been elucidated where the government has emphasized and focused attention on fragmented joint ventures (e.g. “pod” clinical laboratories) structured by attorneys who have not understood that the Stark rules trump the reassignment liberalizations. For any Stark designated health service, no matter what the other reimbursement rules, the Stark rules are the first hurdle for compliance. Consequently, independent contractor relationships that are generally allowed under the liberalized reassignment rules will not meet the definition of in-office ancillary services since an independent contractor is only in the group that is billing when he uses their premises (e.g. radiologists reading off-site from the group providing the technical component). We were not surprised by this position since we believe that is what the rules have said all along. However, the attention to these arrangements in the preface to the Fee Schedule means that the government is becoming increasingly aware of non-compliant creative solutions. Sometimes the answer is “you just can’t do that”. Pay for performance, while
a positive development in terms of focusing attention on the relationship
between quality
results and payment systems, cannot sustain itself as a business
model. How PROMETHEUS Payment® addresses the shortcomings of
P4P is important to understand. In addition, group practices are
ideally suited to take on PROMETHEUS Payment®, but only if
they also change their systems to be more efficient with measurable
quality. In "Getting
Beyond P4P: PROMETHEUS Payment® and
Group Practice", The need for broader implementation of electronic health records
(EHR) In a blog interview conducted by a surgeon who has
been a client, The impetus for quality comes in many forms. Alice has co-authored an article with James L. Reinertsen, MD in the November/December 2005 issue of Health Affairs, "The 100,000 Lives Campaign: Crystallizing Standards of Care for Hospitals", which makes the case that IHI's 100,000 Lives Campaign has changed overnight the legal standard of care for hospitals throughout this country --- whether they enrolled in the campaign or not. We elucidate why. We speculate on the kinds of cases which failure to implement the six planks of the campaign will generate. We look at the top ten reasons hospitals get sued and place the planks in that context. Risk avoidance certainly adds to the business case for quality. And then we say why fear of malpractice liability is not the real reason to implement the six planks. Moral reasons and a call to the true mission of health care enterprises are the real motivations to prevent preventable deaths. As health plans and health systems have
consolidated and fraud and abuse enforcement has intensified throughout
healthcare,
the natural
business tendencies in any other industry for business partners
to find ways to benefit each other economically in win-win strategies
has been stifled in health care. Anxiety over fraud and abuse and
antitrust risks, has gotten in the way of hospitals and physicians
on one hand and health plans and physicians on the other working
together for their mutual economic benefit with the purpose
of improving
quality. In a new chapter in the Health Law Handbook, Alice
makes the argument that until the three principal drivers of the
care
that patients receive in this country take common ownership of
the quality
mission and stop thinking of themselves as disparate, adversarial
stakeholders, quality will never advance to the levels we would
like. "In
Common Cause for Quality" In "Enhancing Oncology's Business
Case: How the Hospital Can Help For quality to advance in
this country, it is becoming increasingly clear that universal electronic
medical records will
be necessary. Proposed regulations to permit hospitals to provide
record systems to their physicians have been published under Stark.
Many physician practices are looking to obtain these programs. Whatever
the source of an electronic health record system, it is
certain there will have to be a license agreement by which the practice
obtains access to the software, unless they build their own. In "A
Primer on Electronic Health Records License Agreements", While quality performance measurement initiatives have received considerable attention and are rising to the fore as a significant force in the healthcare market place, less appreciated is the sub-rosa use of “efficiency measures” by health plans to evaluate resource consumption (i.e., costliness) by providers. While health plans have been using these proprietary software measurement programs for some time, there is now an increasing appreciation that making efficiency information available can serve a variety of useful purposes other than simply excluding providers from networks. In California and Washington new programs to inform physicians as to their relative efficiency evaluations are being touted as important developments to facilitate delivery of appropriate quality care. In Tennessee, the hospital association has joined with a local Blue Cross/Blue Shield plan to publish report cards on efficiency performance. Bridges to Excellence has issued a white paper addressing principles associated with equitable efficiency measurement. The
rise of quality performance measurement and public reporting, controversies
associated with these activities, and potential legal
liabilities are addressed in the new AGG Note, “Performance
and Efficiency Measurement: Implications for Provider Positioning CMS has finally issued its first Stark
advisory opinion Congress has stepped into the debate regarding protection of potentially
negative quality information in the interest of improving quality
with the Patient Safety and Quality
Improvement Act of 2005 “Patient safety activities” are broadly inclusive and go well beyond strict patient safety. Any organization seeking to be recognized as a patient safety organization must be involved in: efforts to improve patient safety and quality of healthcare delivery; collection and analysis of patient safety work product; development and dissemination of information to improve patient safety such as recommendations, protocols, or information regarding best practices; utilization of patient safety work product for the purpose of encouraging a culture of safety and providing feedback and assistance to minimize patient risk; maintaining procedures to preserve confidentiality with respect to the work product; providing appropriate security measures for the work product; using qualified staff and engaging in other activities related to the operating of a patient safety evaluation system to provide feedback to the participants. A “patient safety evaluation system” means collection, management or analysis of information for reporting to or by a patient safety organization. The data protected includes written materials, reports, records, memoranda, and analyses as well as oral statements. The statute provides for the creation of a network of patient safety databases. Moreover, patient safety organizations self-nominate and attest to their certification that they qualify. The statute is self-executing and effective upon enactment. Obviously some administrative mechanisms will be necessary for PSOs to list themselves. And the Secretary does have authority to issue regulations, which may clarify the import of this statute. Nonetheless, this law has the potential to facilitate robust quality relevant activities and provider groups would do well to consider taking advantage of whatever protections it does offer. The Stark statute and regulations present a host of structuring
and operational challenges for most physicians. Radiologists have
often believed that they are immune from the implications of Stark
since their ordering of diagnostics studies pursuant to a consultation
is excluded from the definition of an implicated referral under Stark.
However, this does not mean radiologists need not pay attention to
the Stark statute. Moreover, many other types of physicians are seeking
to engage radiologists in concert with them to deliver imaging services
to their patients. Liabilities lurk everywhere. In “Radiologists
and Their Business Significant Others: Underappreciated Traps in
Stark Physicians and their practice managers frequently consider contracts
to be overly burdensome, too detailed, and too expensive to create.
Paradoxically, though, they similarly want assurances that when they
do create a contract that it will be “iron-clad”. These
are naïve misunderstandings of the enormous power and value
that contracts have in the modern business environment. As physicians
relate to others in a wide variety of ways, whether in employment,
joint ventures, vendor relationships or otherwise, contracts define
their business context. By the same token, a contract is only as
good as the will of the parties to abide by it, so a clear and common
understanding of the goals and intentions is essential. In “Understanding
Contracts: The Glue of Modern Business Relationships In an article in Community Oncology, Alice makes the argument that
because of the perverse impact of the Medicare drug payment model
on oncology practices, they have neglected to focus on their own
business case for some time. When much of your income is driven by
profits made on the provision of pharmaceuticals to patients, a reduction
in that payment can result in significant practice dislocation. For
oncologists, the moment may well be optimal to really consider clinical
integration. In “Better
Quality, Better Margins: Seizing the Moment As is often the case when the government breaks new ground, egregious fact patterns make for important precedents. On the other hand, the real message in the government's recent CMP settlements on kickbacks is that fair market value is a real basis for enforcement and it is not what the parties negotiate between them. It is determined by reference to the general market and is best established by a third party valuation. A third party valuation, however, is not by itself a silver bullet. These valuations are subject to manipulation and can be supported by financial analyses that otherwise run counter to the statute. For example, in a case handled by this office regarding a payment associated with the valuation of a physician practice, the valuator returned a statement that the practice was worth between $23,000 and $2,000,000. This is not only worthless, it creates increased potential liability by forcing the parties to shop for another opinion. Similarly, a valuation methodology that takes into account continued referrals can be problematic if not constructed appropriately. Third party valuations, like requests for compliance-oriented audits of claims, are best conducted when the question posed is very carefully crafted with legal guidance. In its Jan/Feb 2005 issue, Health Affairs offered a range of articles confronting issues in evidence based medicine. One of them, by Timmermans and Mauck, cited a number of barriers to widespread physician adoption of clinical practice guidelines. Alice Gosfield and Jim Reinertsen noted that where guidelines are nothing but an add on to a system which imposes unmanageable administrative burdens already, there is little to motivate physicians to use them. Our letter to the editor, published in the May/June 2005 issue of Health Affairs, points out that to use CPGs as the foundation for all processes, both administrative and clinical, makes a far better business case for their use. Since the inception of the DRG
program in 1982, hospitals have been trying to find a way to motivate
the physicians on their
staffs to
work with them to lower expenses by sharing savings generated. These
'gainsharing' notions had been virtually precluded to them going
back as far as a Paracelsus hospital company program in 1983, and
then in more modern iterations, by virtue of the OIG's Special Advisory
Bulletin on Gainsharing
Arrangements
in 1999. Although the OIG approved one gainsharing program 18 months
after the Bulletin (see discussion in Alice Gosfield's article on "Making
Quality Happen: In Search of Legal Weightlessness" Clinical integration has been held
out by the FTC in every physician network settlement into which they
have entered in the last few years. "You
can't do this, but if you were clinically integrated you could." Some
have questioned whether clinical integration is really available
as an option to facilitate providers bargaining with payors. Brown
and Toland in California was the subject of an FTC enforcement action
in 2003 for their PPO
bargaining activities.
When they eventually settled, they agreed not to undertake any PPO
bargaining unless the FTC prior approved what they were doing as
sufficient clinical integration. The FTC has now reviewed Brown and
Toland's ( B & T) approach and has said it represents enough
clinical integration to permit negotiations, but they will still
be subject to review for conformity with the integration principles.
B& T says that the elements
of integration "You cannot improve what you cannot measure". "What
gets measured, gets done." These truisms about quality improvement
reflect the importance of performance measurement which is being
used not only for P4P but also for network selection, reorganizing
care delivery processes, and transforming the culture of health care
organizations. For all of the policy interest in core data sets and
standardization of measures, the current context offers anything
but. The varieties of measures and measurers seems to be proliferating
rather than consolidating. There are controversies and quandaries
in performance measurement, as well as lurking legal liabilities
both for those who would select and use measures as well as those
who do not or do so ineffectively. In "The
Performance Measures Ball: Too Many Tunes, Too Many Dancers?" With the reemphasis on 'transparency' in health care
quality policy, more and more quality information about providers
will be made available.
The commercial value of provider data is also increasing. Providers
enter into many contractual relationships where data about them may
be in play, even if that is not the focus of the relationship. For
example, a managed care contract, a practice management company relationship,
obtaining an electronic medical record from a software vendor, or
hiring a billing company are all relationships where significant
provider data will be at issue. In "Commerce
in Provider Data: What, Why and Provider Contractual Controls" The implications of the Stark Phase II regulations when considered in light of Medicare reimbursement restrictions merit a new look.. In our AGG Note "Medicare Reimbursement Through The Stark Looking Glass", we elucidate some of the contradictions and unappreciated pitfalls lurking in issues pertaining to physician-to-physician referrals, in-office ancillary services, incident to billing, reassignment, and diagnostic testing. Unlike our previous AGG Notes, “Stark II, Phase II: The Interim Final Story”, (May 2004) and “Much Better Late Than We Thought: Stark II Final Regulations”, (February 2001) rather than reporting on the contents of the Stark regulations, this new AGG Note is more analytical. It should be read with the other two for a complete understanding of the internecine workings of Stark. Even as Joint Commission has expanded its attention on quality improvement activities in the hospital, hospitals that do not rely on “deemed status” based on their Joint Commission survey will have to meet the CMS conditions of participation which now require the hospital to develop, implement and maintain a data driven quality assessment and performance improvement program (42 CFR § 482.21) which must rely on quality indicator data. The Board itself is held accountable for the operation of the program. (42 CFR § 482.21(e)). This reemphasis should further propel hospital boards in stewarding the data driven quality improvement of their organizations. Regarding Stark, there remain considerable confusions about this badly drafted and misguidedly conceived piece of legislation. The fundamental concerns that motivated the legislation are legitimate: (1) Will physician investment motivate referral to poor quality, financially related entities; (2) Will Medicare overpay entities which create specious joint ventures just to investor physician referrals; (3) Will tainted referrals yield medically unnecessary care for financial return? The statute does precious little to address these core questions. Over the years we have addressed many of the misconceptions and myths about the law and regulations in addition to our two AGG Notes, two part article in Family Practice Management (Part I, Part II) and Ten Myths About the Stark Statute Debunked. The essential nature of the transaction that
takes place between physician and patient, as first articulated by
Jim Reinertsen in
1997, in “Health Care: Past, Present and Future” (Group
Practice Journal, March/April 1997—Vol. 46, No. 2) is the
critical touchstone for UFT-A
principles. It has also been acknowledged in the Crossing the
Quality Chasm statement that “Transferring
knowledge is care.” High quality care, therefore, is care that
occurs when the conditions permitting the most effective transfer
of knowledge have been optimized. In her article, “The
Doctor-Patient Relationship as The Business Case for Quality”, Interim
Final Stark Regulations have
now been published addressing the remaining statutory exceptions
that were unaddressed under Phase II and creating a host of new regulatory
exceptions. From recruitment subsidies from hospitals, to in office
ancillary services, to professional courtesy, the Stark regulations
reach into transactions large and small. The legislation is misguided,
badly drafted, and unnecessarily complex. It may be the worst piece
of legislation in thirty years of health care enactments, but it
is law and the regulators have done the best they can to make it
livable in the real world. Our AGG
Note, ”Stark
II, Phase II: The Interim Final Story,” explores in real life
scenarios some of the most commonly applicable issues and expounds
on the implications
of some others. It should be read in conjunction with our 2001 AGG
Note, “Better Late Than We Thought: Final Stark Regulations”.
There will be a Phase III though which will surely clarify some of
these matters. You can also read our comments on three issues which
we have raised in response to the open
call for comments. “Pay for Performance”(P4P) is a new phenomenon
intended to incentivize physicians and hospitals to render high quality
by paying them differently if they perform in accordance with criteria.
From Leapfrog, to CMS, to the Bridges to Excellence program and the
activities of the Integrated Health Association in California, there
are many variations on this theme. That the government is in this
game can also be seen in a little noted provision in HR 1 that the
formerly ‘voluntary’ hospital quality reporting initiative
is now not quite so voluntary since hospitals that do not report
their data to CMS will experience a .4% reduction in their Medicare
payment, each year they do not report. In “Contracting
for Quality: Then, Now and P4P” One of the major thorns
in the side of physicians confronting managed care payors has been
their antitrust risk if they bargain for fees
collectively. We have posited that ‘clinical integration’,
which the antitrust regulators have said can permit otherwise collusive
bargaining among competing physicians, is part of the business
case for quality. In
each of the physician and hospital network settlements in
the last months, the FTC has noted that the physician groups were
not sufficiently integrated financially or
clinically. In the settlement with Brown and Toland, the FTC imposed
a new requirement that if they chose to bargain based on clinical
integration they would have to submit their approach to the FTC before
implementation. Given the dearth of regulatory guidance on point,
and only one advisory opinion to
date, it is with great pleasure that we are able to make available
an important
article from our 2004 HEALTH LAW HANDBOOK by Bob Leibenluft who was
the head of the health care division of the FTC when the clinical
integration opportunity was made available. In “Clinical
Integration: Assessing the Antitrust Issues” Prosecutors are becoming increasingly interested in how quality implicates the fraud and abuse statutes. From understaffing in hospitals, to care which does not meet professionally recognized standards, to over-utilization, new theories of false claims and flat out fraud based on the clinical care rendered are emerging. Initially used to force some 40 or more false claims settlements around the country with nursing homes, prosecutors have now made it clear they intend to use similar theories to prosecute hospitals. In the current environment of diminishing reimbursement and heightened attention to quality, the fraud and abuse risks from less than optimal clinical behavior can no longer be ignored. Unless these issues are addressed in compliance programs, those initiatives will remain mired in the narrow focus of the administrative minutiae of billing problems, leaving the health care enterprise vulnerable and their compliance staff isolated from the principal focus of the organization – delivering high quality care. At the same time, how to set priorities for compliance activities
is beginning to stymie those compliance programs that addressed initial,
low hanging fruit with corrective, voluntary actions. Some of our
clients are struggling with where to go next. Many of them seem to
believe that the role of compliance is to forever search out errors
to report and repay. We do not share this view. We believe compliance
is about doing it right in the first place and cleaning up problems
found. It is not about eternal internal inspection. Our new AGG
Note, “The
Quality/Compliance Nexus: Moving to Programmatic Integration”
examines the developing enforcement environment, sets forth liabilities
already on the books, and then discusses how using clinical
practice guidelines |
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The FTC is on the march against physician networks. In five recent enforcement actions -- against an IPA in Dallas (http://www.ftc.gov/opa/2003/06/sourthwestphys.htm), the Washington University Physician Network for boycotts (http://www.ftc.gov/opa/2003/07/wupn.htm), a Baton Rouge orthopedic network for a failed messenger model attempt at negotiations (http://www.ftc.gov/opa/2003/07/pnc.htm), a joint bargaining mechanism between a hospital and its physicians in Maine (http://www.ftc.gov/opa/2003/07/maine.htm), and against Brown and Toland in California for their handling of their PPO contract negotiations as distinct from their HMO contracts (http://www.ftc.gov/opa/2003/07/browntoland.htm), the FTC has made it clear that it will not tolerate collusive bargaining among otherwise competitive physicians. Throughout, the FTC continues to hold out clinical integration as a bulwark against per se antitrust violations. To date, there has been only one advisory opinion dealing with clinical integration. Despite its insistence that it would fight the government, the Brown and Toland medical group eventually did sign a consent order in which they agreed, among other things, to notify the FTC 60 days in advance if they plan to enter into a contract which they believe will meet the standards for either financial integration or, more significantly for us, clinical integration. That the government still believes clinical integration can be meaningful is evident from its orders in these cases. We think their approach is consistent with our ‘unified field theory applied'. We are not antitrust lawyers, but the appeal of clinical integration is enormous as a quality propelling adjunctive mechanism. While many antitrust lawyers are skeptical of the extent to which the FTC will endorse real clinical integration, we, frankly, share the view that the FTC likely hasn’t seen much real clinical integration, since most IPAs don’t provide it nor even understand it. Moreover, the FTC has made it abundantly clear that the fee agreements that will not be considered per se violative must be necessary to fulfill the clinical integration functions. The MedSouth opinion describes an unwieldy, overly complex system of managing care which is not the only approach to these issues which we think the FTC would approve. In fact, we are eagerly awaiting the battle which Brown & Toland says it will mount, to see how the developing boundaries of clinical integration square with our Unified Field Theory---Applied. (Go to www.uft-a.com for more discussion of this proposal). |
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The need to advance a quality agenda in the American health care system has never been more urgent. Yet current initiatives, including "pay for performance" programs, are not generating desired improvement in health care. A major reason is the failure of policy, markets and regulation to engage physicians, arguably the most significant drivers of what care is delivered. On March 28, 2003 in Chicago, Alice G. Gosfield and James L. Reinertsen, MD, FACP, convened, with the generous support of Sanofi-Synthelabo, a unique meeting of 30 senior leaders (CEOs, CMOs, Senior VPs) from a variety of leading institutions around the country including Intermountain Health, Pacificare, Sutter, Scripps, Massachusetts General Hospital, CareGroup's Provider Service Network, HealthTexas (Baylor), Hackensack University Medical Center, Catholic Healthcare Partners, Mayo, EBM Solutions, Anthem, Institute for Clinical Systems Improvement, Oregon Health and Sciences University and others to consider, react to and develop further ideas first expounded in the AGG Note on 'Gosfield's Unified Field Theory'. This theory, which Reinertsen and Gosfield now seek to move to practice and application ("the Unified Field Theory-Applied ["UFT-A"]) posits how to use clinical practice guidelines to drive physician payment and many other aspects of the health care system. The purpose of such an approach is to (1) give physicians back more time to develop healing relationships with their patients; (2) improve quality; (3) standardize, simplify and make more clinically relevant the physician work environment; and (4) thereby make the entire health care system more consistent with overarching quality driven principles that speak to physicians the way they think. The discussion was met with significant enthusiasm. Gosfield and
Reinertsen have now written a white paper, "Doing Well
by Doing Good: Improving the Business Case for Quality" which
is available in both an Executive
Summary
The goal of the paper is to stimulate rapid-fire trials in multiple venues. The conference attendees were interested in remaining in contact regarding initiatives, experiments and experiences with these ideas. We have now established a listserve at www.uft-a.com for those who seek to communicate in an on-going way on these issues. We are hopeful this will be the beginning for broader initiatives that will expand to others. |
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The HIPAA Privacy Rule became enforceable on April 14, 2003 and on April 17, 2003, the Office of Civil Rights of DHHS published regulations addressing how it intends to enforce the Privacy Rule, so compliance is more important than ever. Many providers, still struggling with the compliance process, have found our Physician and Medical Practice HIPAA Privacy Compliance Protocol to be a useful tool. Like our Fraud and Abuse Compliance Protocol it is for sale to clients for $75 and to non-clients prepaid for $125. If you would like it provided to you electronically, let us know. Additional practical guidance can be found in The HIPAA Privacy Rule: Answers to Frequently Asked Questions by Alice G. Gosfield. We are working with our clients to help them develop their privacy
compliance plans. Like fraud and abuse compliance programs, we do
not believe that these plans should be purchased off the shelf,
even from
us. Rather they must reflect the specific demands of each practice
and these will vary considerably. We are helping our clients who
are Covered Entities develop (1) their own notices of their privacy
practices,
authorizations, and business associate contracts as well as (2) policies
and procedures to assure they comply with the rules and appropriately
safeguard the rights of those whose protected health information
(PHI) will be shared. We are also helping our clients who are Business
Associates
evaluate the contracts they are offered and develop complying policies
and practices they accept as obligations. |
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| In addition to the annual Health Law Handbook, which Alice Gosfield has been editing and contributing to since 1989, since 2003, we have taken over the authorship of Medicare and Medicaid Fraud and Abuse, another WestGroup single volume, soft-back publication, which, updated annually, eliminates the nightmare of inserting and removing pages to stay current. This book has been completely revamped to make it far more practical for practicing lawyers since it was originally conceived and authored by Tim Jost and Sharon Davies. Kevin Raphael, a nationally renowned white-collar defense counsel and plaintiff whistleblower counsel authors the chapter on Investigations. This book has six chapters which provide a comprehensive review and practical guidance with respect to 1. Medicare and Medicaid Fraud and Abuse Generally; 2. The Anti-kickback Statute and Safe Harbors; 3. The Stark Statute and Regulations; 4. Exclusion and Civil Money Penalty Authorities; 5. False Claims including Whistleblower Cases; and 6. Investigations. We believe its handy one volume format will be a useful resource for practitioners in the field. We expect to continue to refine its approach in the coming years. |
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As physicians have become more interested in receiving the full economic value of the
work they produce, and they have sought increased control over their work environment,
more and more often they have created and financed health care enterprises which may
compete with the hospitals at which they have traditionally maintained medical staff
privileges. Some hospitals have reacted with restrictive medical staff policies, intrusive
inquiries into staff members’ financial relationships with other health care
enterprises, controls over who may be a medical staff officer and a variety of other
defensive behaviors. Some restrictions or threshold criteria for privileges reflect a real
effort to safeguard quality in the hospital and are quite legitimate. Others really
implicate the federal anti-kickback statute. The OIG has called for comments on how economic
credentialing by hospitals may violate the anti-kickback statute. We are making
available our comments to the OIG
on these points. |
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Economic credentialing is only one of a number of sources of tension between medical
staffs and the hospitals to which they relate, which tensions are growing as the dynamics
of health care change. In many ways, it is not unreasonable to ask ‘what is the value
of the organized medical staff?’ in the current hospital environment. In our AGG Note, "The
Organized Medical Staff: Should Anyone Care Any More?" we present information
regarding the genesis and legal basis for the medical staff, how bylaws relate to the new
environment, typical bylaws contents and typical bylaws mindsets. We offer 7 principles of
interaction to improve and make more meaningful for physicians and hospitals their
interactions in the interests of patient care quality along with 5 suggestions regarding
how to revitalize and make easier certain key medical staff functions. We also review 5 of
the hot potatoes in medical staff-hospital relationships including economic credentialing,
EMTALA obligations, and cross-department privileging, among others. For a more
extensive consideration of these issues see Alice Gosfield's article "Whither Medical
Staffs?: Rethinking the Role of the Staff in the New Quality Era.". For related information see our discussion of our monograph for the AMA "Quality and Clinical Culture" below, and our work on the AMA's model medical staff bylaws, below. |
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Alice Gosfield is delighted to announce
a unique affiliation with James L. Reinertsen,
MD, FACP, an
internationally recognized expert on quality improvement, health care
leadership and evidence based medicine, and the head of the The Reinertsen Group,
are speaking (see
Available Speeches and Presentations) and writing together about advancing
the quality agenda by
focusing simultaneously on both the critical role of the doctor-patient relationship and the real world application of evidence-based
medicine throughout the health care system. We believe that to
really make change that will be meaningful to patients, physicians and
payors it is necessary to rethink basic issues in payment,
reporting, performance
measurement, organizational and clinical process design and even liability.
To make this happen, there is a profound need to standardize, simplify
and make clinically relevant
these core elements of the system in accordance with clinical
practice guidelines.
In particular, we believe that physician groups will want to move in
these directions with or without other collaborating stakeholders. To
read more about our approach,
particularly in the hospital context, read their two companion pieces
(1) Reinertsen, "It’s
About Time: What CEO’s and Boards Can Do For Doctors, Nurses and
Other Healthcare Professionals";
The Federal Trade Commission has issued its first Advisory Opinion in which it approved as not a per se violation of the antitrust laws a Denver physician network of otherwise competing doctors engaged in clinical integration, even though they would negotiate collectively for fee for service payments from payers. The essential activities were proposed to be the use of clinical practice guidelines to drive their behavior, monitoring of their activities in accordance with the guidelines, changing behavior of those who could not comply and reporting of detailed data to payors. The Advisory Opinion was issued in response to the description of a program not yet in place. It represents an extremely important development in the business case for quality to motivate physicians to undertake on their own increased standardization and quality improvement for many reasons including false claims avoidance, risk management, internal cost control and efficiencies, and potential elimination of intrusive external medical management programs. This Opinion is the first enforcement validation of Gosfield’s Unified Field Theory and should be considered closely by anyone – including IPAs, PHOs, integrated delivery systems, and MCOs – looking for a business case for quality. Alice Gosfield's monograph for the American
Medical Association, "Quality and Clinical Culture: The Critical Role of Physicians
in Accountable Health Care Organizations" (Go
To Article ) Alice Gosfield worked with the AMA at their request to update their Model Medical Staff Bylaws. The current AMA guide is "Physician's Guide to Medical Staff Organization Bylaws (2nd edition) OMSS Website Resources." Final regulations under Stark II have been issued; but extending the torture even longer, HCFA is issuing them in two phases. Phase I deals with essential issues such as physician compensation methodologies, definitions of designated health services and referrals. It qualifies the functional realities of the group practice definition. In office ancillary services and prepaid plan exceptions are also addressed. Several new exceptions have been created including one for fair market value arrangements. On the other hand, all the other exceptions including for leases, personal services and recruitment among others are addressed in Phase II. Because of the overall complexities of the statute, the regulations and preface to them are equally as complex and comprise more than 100 pages in the Federal Register. Link to the Federal Register Here. See our AGG Note on the Final Regulations. The good news is that some of the changes have brought Stark far more in line with general Medicare reimbursement principles. On the other hand, other changes manifest a continuing attempt to control utilization and structure relationships through these mechanisms. We are assisting clients in reevaluating their relationships in light of these rules. |
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Health care report cards
are a burgeoning phenomenon on the health care landscape. Comparative
data on health plans, hospitals and physician groups are being
published by increasingly diverse sources, on the Internet and
otherwise.
Customer/patient satisfaction data has dominated much of the field,
but more and more, clinical quality comparisons are being offered. There
are legal implications for the publishers of this data - whether third
parties or self-reported. NCQA's HEDIS data
is a major feature in the world of managed care. Although HEDIS
data reports on managed care plans its power influences how plans relate
to providers. Where a plan
contracts with a physician group, for example, how that group will
impact on their performance scores is a competitive issue with legal
overtones for the physician
group. We are helping clients understand the legal and strategic
pitfalls and opportunities in responding to the comparative data demands
of the new environment. (See
our article, "Health Care Report Cards": Quality in
the Public's Cross-Hairs.) |
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Physicians and health care businesses to which they relate are
struggling to determine their appropriate roles. Traditional organized medical
staffs have not fared well in the new environment. At the request
of the American Medical Association, Alice Gosfield prepared a white
paper/advocacy document which
articulates why, at this moment in the history of health care, the unique values
physicians bring to bear are essential to the management of any organization which seeks
to position itself as an accountable health care organization. The paper
lays out a continuum of issues to which physicians should direct their attention,
articulates principles of engagement for effective collaboration between business and
clinical leaders and describes how physicians have in the past undermined their
effectiveness in these undertakings. We are presenting this discussion in various
settings throughout the country to integrated delivery systems, medical staffs, physician
groups, managed care organizations and others. See, "Quality and Clinical
Culture: The Critical Role of Physicians in Accountable Health Care
Organizations". (Go To Article)
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Demands placed on physicians to respond to multiple forces in the health care marketplace are daunting and often in conflict. From risk management to avoid malpractice liability, to continuous quality improvement and managed care efficiencies, too often physicians and their managers approach these themes as disparate, unrelated activities. In the AGG Note, "Gosfield's Unified Field Theory of Health Care Management" Alice Gosfield discusses a technique grounded in clinical practice guidelines as the basis for business processes. The approach can provide a single organized pathway to respond to these multiple demands. Practical and focused, it speaks to physicians the way they think. This work was the foundation for our more recent efforts on the business case for quality, “Doing Well By Doing Good: Improving the Business Case for Quality” and the dialogue at www.uft-a.com. |
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was surprisingly light on issues that affect physicians. Although attention to specific diagnostic testing including sleep studies, high end imaging, and electrodiagnostic testing were called out for attention, there were four critical areas that include several concerns on which we have long provided guidance and one new problem particularly for physicians.
Further exploration appears in the new article
Alice
Gosfield elaborates on these themes and the legal predicates for
improved physician as business case for quality.
Our
other publications on point include our two articles in Family Practice
Management, “The
Stark Truth About Stark” (
