Quality & Value

False claims liability has typically turned on financial behaviors -- upcoding, submitting claims pursuant to Stark or anti-kickback violations, and other financial arrangements, activities and transactions. Rarely considered are the increasingly new liabilities associated with what Alice calls “quality fraud.” These are improper clinical behaviors including wasteful services, medical errors, over-use, under-use, failed medical necessity and violation of basic requirements for payment that turn on clinical compliance.  In addition, with the advent of value-based purchasing and significantly more reporting about quality, inaccurate or false reporting can create exposure as well. In “Quality Fraud: Gathering The Threads” Alice elucidates the multiple bases for quality fraud, what such fraud looks like as action, penalties associated with misbehaviors, the guidance the government has offered on point, and suggestions for avoiding these risks. Most providers-- including hospitals and physicians -- will have to update their compliance programs to address effectively these augmented perils.

Cancer care represents a major segment of health care expenditures in the USA and the payment to physicians has been perversely oriented around the drugs they administer rather than the services they perform in meeting the complex needs of their patients. Recent history has demonstrated multiple attempts at reforming this payment, including most recently in CMS’ Oncology Care Model which will become Oncology First Model after 2021. In “Paying Physicians for Cancer Care”, Alice explains the inception of this out of whack system, considers reform efforts in commercial payment, looks closely at the OCM and criticisms of it and then sets forth the principles which apply in a new design suggestion which has been presented to CMS. She also sets forth contractual issues to make cancer care payment viable. The new proposal, initially presented in a White Paper which set forth five principles for program design, also figured as the focus of a Health Affairs blog post and an interview with Alice and two other members of the design team.

Alice is continuing to expand the understanding of providers about the enormous utility of patient safety organizations in protecting sensitive decisions as providers improve their performance, value and clinical integration.  Alice has three additional published articles directed to diverse audiences.  For medical practice managers she authored "Using Patient Safety Organizations to Bolster Clinical Integration".  For lawyers she wrote, "Five Reasons Physicians Should Report to PSOs"; and for primary care physicians she wrote "Patient Safety Organizations can help providers improve performance and results." Several PSOs with whom she has spoken, seeking to spark their interest in directing their attention to physicians and their practices, have asked her "what's in this for you?"    Her answer has and continues to be that clinical integration of physicians is the most fundamental key to changing the health care value proposition. To do the hard work of making change entails riskThe PSO connection lowers that risk. She is interested both in stimulating PSOs to step up to help while she motivates physicians to demand to be served.  She hopes to help them contract with PSOs and establish their own patient safety evaluation systems.  The results cannot help but be better health care.

As a tiny, boutique law firm, we were delighted that Acquisition International, based in the UK, named us the Leading Boutique Personal Service Health Law Firm of the Year chose to profile us and our approach to work because of our dedication to excellence. We strive to provide stellar service to our clients and to have collaborative relationships with them, for which we are willing to be held accountable in Our Attorney Client Compact. We have also been recognized for ten consecutive years as a Best Law Firm by Best Lawyers.

The ever increasing consolidation among providers has taken the form of hospital and health system mergers and affiliations and above all, of much more employment by hospitals of physicians.  As we have written and have offered in teleconferences size does not guarantee value.  In fact, one of our critical complaints about all the employment and consolidation is that these relationships are predicated on mutual delusions among the physicians and the hospitals employing them. We have been ceaselessly banging the clinical integration drum, making the point that without real process and organizational change value cannot improve.  In CISAT v 2.0, we offer a tool to help physicians in relationships within their own groups as well as with hospitals, to move from where they are today.  In CISAT v 2.1, Alice created a version that can be used by otherwise independent practices coming together in order to clinically integrate, without merger or employment. Now we have evidence that small primary care physician practices have low rates of preventable hospital admissions. In a Commonwealth Fund report, researchers found that practices with one or two physicians had 33% fewer preventable hospital admissions than practices with 10-19 physicians, and practices with 3-9 physicians had 27% fewer admissions.  The researchers posit that independent practice associations (IPAs) may be a viable alternative to produce better results in the near term.

The Patient Safety and Quality Improvement Act was enacted in 2005. It was three years before any regulations were published regarding who would qualify as a Patient Safety Organization (PSO) to which providers could report safety and quality data which would be protected from discovery in almost any setting. In thinking about the type of work that real clinical integration entails, those who engage in the required intense self scrutiny that is essential to change clinical processes to deliver safer, better, more valuable health care will have to generate highly sensitive data about their own performance. To invoke the protections of the law, the data must be generated within a Patient Safety Evaluation System (PSES) which is specific to the reporting provider. Providers include any kind of health facility or practitioner licensed or authorized under state law to provide health care services. Interestingly, providers do not include IPAs, PHOs or ACOs which are rarely licensed or authorized under state law to deliver care. This does not mean they are outside the bounds of the law. This means good lawyers can be creative about how to structure relationships between providers and these new delivery vehicles so that data can be protected through a PSES for reporting to a PSO.

When sensitive data is managed within this system, it cannot be introduced, discovered or used by anyone else in any federal, state or tribal court or administrative setting, subject to very limited exceptions. The law provides both a privilege enforced by the courts as well as broad confidentiality, the breach of which is enforced by the Office of Civil Rights of DHHS. It is both flexible and potentially sweeping in its effects. The system is reminiscent of the principles for tort reform that Alice set forth in an article in 2000. In "Physicians and Patient Safety Organizations: Furthering Clinical Integration" Alice presents the context for PSOs, what the regulations require for reporting to a PSO, what caselaw teaches us and then explores some ways in which deploying this mechanism can protect the hard work physicians will have to do to make their care better. This is an opportunity all physician groups and facilities should explore. It has the potential to bring to smaller entities the experiences and learning from others, thereby multiplying the power of engagement with the PSO. We will be working with our clients to help them develop their Patient Safety Evaluation Systems and the contracts with the PSOs to which they will report.

The problem of overuse is getting more attention than ever in the move toward greater value in health care. But overuse is no longer just an issue of cost.  It is increasingly a fraud and abuse concern, and in sometimes surprising arenas. Cardiologists have been charged and convicted for over-stenting but over-stenting has been a dirty secret in cardiology for years. More surprising is that an oncologist in Michigan has been charged with administering medically unnecessary chemotherapy. In a whistleblower lawsuit in Georgia, a different spin on overuse was presented where both a physician and the medical center where he practiced were charged with false claims based on his incompetence to perform procedures for which, it is alleged, the hospital should never have granted him privileges. Now, the GAO has focused on the exponential increase in both radiation therapy for prostate cancer by urologists with a financial interest in the radiation therapy center as well as anatomic pathology services billed by urologists, dermatologists and gastroenterologists who had obtained the opportunity to self-refer. While the Stark statute was primarily aimed at overuse, self-referral and financial benefit are not the only motivators of overuse. Defensive medicine also makes the cut. As the house of medicine has, at long last, begun to address the problem of overuse in the Choosing Wisely campaign providers who do not make the value of care a core value in their efforts to confront the changing environment, do so at their own peril from expanding fronts.

The drumbeat for insurers to move to value-based payments cannot be ignored. However, both experience and expertise at the health plans which are touting their programs are widely variable. A recent survey reports that 82% of health plans consider the development of new payment models a major priority. They are, however, all over the ballpark in what they are doing. Many of the national plans now claim to have many ACO projects in the works, although these vary widely as well. Almost all of the new value payment propositions that are not mere pay-for-performance turn on some concepts of bundling budgets or bundling payments. Typically, providers are paid in the ordinary course, with a gainsharing bonus available based upon reconciliation at some pre-determined point in time. The contracts that create these arrangements are the most critical foundation of potential success. As Medicare moved into this arena with the Bundled Payment for Care Initiative (BPCI) they engaged consultants to provide contracting advice. Mitre and Brookings acknowledge in the Foreword to their material their extensive reliance on Alice's input and review of their document. The Manual is oriented around the Medicare program, but essentially highlights what is necessary to make one of these bundled payment contracts work.

The rapid rise in the employment of physicians by health systems has been repeatedly noted. A recent survey by yet another recruitment company found that 70% of health care leaders say physicians are approaching them for employment. Yet, the data has also consistently shown that this is a money losing proposition for the hospitals in many ways, in part because once employed, the hospitals do not facilitate the physicians' clinical integration or undertake any effort to actually improve value [See also issues: #1: 61, 55, 48]. In "Four Top Complaints of Employed Doctors", newly employed physicians complain about (1) being "bossed around by less educated administrators;" (2) not being able to make decisions about staff and personnel; (3) having less authority over billing and charge coding; and (4) being forced to use new equipment and technology. In addition to the efficiencies of many of the organizations now employing physicians, the consolidation in the industry is raising other concerns with respect to provider power and negotiating with plans. It is not hard to imagine that many of the employment strategies will unravel. Whether physicians have prepared well in their negotiations with the hospital in the first place for life after a failed transaction is something that needs to be dealt with in the first place. More to the point, in many instances, health systems and hospitals can get precisely the same impact that they seek from employment without the troubles while physicians can function more effectively in their own environments. We have repeatedly stated this ("Alignment Without Servitude: Leasing the Practice to the Hospital"), and have facilitated many practices in a wide variety of affiliation strategies with hospitals and health systems that fall short of employment and "avoid marriage." [See also issues: #1: 54, 52, 47]

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", Alice explores what we know about bundled payment, bringing to bear her experience with the PROMETHEUS Payment® model which is the most sophisticated of these programs. She describes Medicare's previous experience with bundled payment and presents some of the methodological problems with the way the new program is unfolding. Following on her previous work on contractual and governance issues in bundled payment, she addresses those and also issues in payor-provider contracts. There are ways to avoid trouble in these transactions; and bundles for the sake of bundles alone are not worth experimenting with if the bundles are not designed properly. Caveat emptor!
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", Dan Shay picks up a topic last considered by Alice in 1999. He describes the new pressures for physicians to focus closely on when and how to use non-physician practitioners to deliver care. He explains Medicare's rules with particular attention to nurse practitioners and physician assistants and reports on the positive impact that proper use of these ancillary personnel can have on the new mandates for improved performance.
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  and the other for group practices, organized medical staffs or newly coalescing ACO-type organizations; (2) our Three Tuesday Teleconferences addressing leasing the practice, co-management, and bundled payments; (3) our teleconference on compensating physicians for quality and value as well as our articles on the subject. Physicians can be far more proactive in designing their futures. The moment is now.

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" she elucidates the types of policy decisions that should be made today and documented governance documents and contracts among providers to avoid the problems of tomorrow. The third of our Three Tuesday Teleconferences addresses many of these issues with an opportunity for participants to ask questions.

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.
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 and Medical Economics exhort physicians to recognize their unique role and unique responsibilities.
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, we have a self-assessment tool for groups of otherwise independent physicians to use in coming together to meet the clinical integration demands of the new environment. Designed to help them envision what a desired end state, or at least more evolved organization, might look like, as with v.2.0, it provides three scenarios for each of the 17 attributes of a clinically integrated entity from barely started, to making some headway, to more evolved. We hope physicians find it helpful in repositioning themselves for new challenges.
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", she provides an initial report on the responses which came from three times as many organizations as four years earlier.  In 2008, in her longer Health Law Handbook chapter, Alice described the advent of Pay for Performance programs as the primary stimulus to these compensation models. Now, in "Bolstering Change: Physician Compensation for Quality and Value" she looks at the phenomenon of compensating physicians for quality performance and increasingly for value in cost effective approaches to care. In addition to setting the issue of physician compensation in the current enhanced value context, Alice also looks at data on how hospitals are dealing with their employed physicians on this front, and concludes that much like her observations with Jim Reinertsen of those hospital employment/integration strategies without content, she finds that many hospitals are missing a real alignment opportunity by focusing solely on wRVUs in compensating their employed physicians. And, more and more, attention will have to be paid to the cost effectiveness of physician behavior which drives the group's or hospital's revenues.
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 which elucidates 17 distinct attributes of clinically integrated programs, whether within a physician group, by a hospital with its newly employed physicians, within the organized medical staff, or in a newly coalescing ACO-like entity.  All ought to take into account the range of issues identified, but in slightly different ways.  We are also explicitly calling for those who may use the tool, to revise, refine and add to it.

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” Alice and Jim Reinertsen focus on the hospital-physician nexus of clinical integration.  Clinical integration of various kinds is going to be the sine qua non of health care delivery which will succeed in an environment of heightened quality expectations, the need for better patient safety, diminishing reimbursement, and pressure for contained costs.

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” Alice Gosfield and Jim Reinertsen elucidate the new basis for common cause, contrast the current environment with past clinical integration efforts, and offer a new definition of clinical integration

“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 image of a hospital cannot be overstated.  We are working with medical staffs around the country to revitalize their bylaws and their view of themselves.  Physicians can not be engaged with each other unless they meet with each other, so some organizations are changing their meeting requirements to a more traditional expectation that physicians appear at meetings. Of course, since time is the scarcest resource physicians have available, to get them to spend time working with the hospital, the work must be meaningful to them.  We have long taken the position that the best approach to engagement is to IHIEngagingPhysiciansWhitePaper2007. We think that the moment to revitalize the medical staff is even stronger than it has been.  We do not share the views of those who see the organized medical staff as obsolete.

Clinical integration has been a vaguely understood topic since the antitrust regulators introduced the concept in 1996. 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 Is Back”  she observes that the furtherance of clinical collaboration across the continuum of care will be essential to improve healthcare delivery. A broader understanding of clinical integration techniques can enhance physician performance and quality results both with hospitals and on their own.

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” , Alice and Jim describe specific points of evaluation, and offer good and bad answers to the tough questions. They raise issues that few of the consultants pushing these strategies are willing to address.

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”  Alice examines these issues in greater depth than was presented in her teleconference. She explores the phenomenon of enthusiasm for full merger business strategies and offers a range of other techniques by which physicians and hospitals may bond more tightly while physicians remain independent---all with particular emphasis on improving healthcare value and quality.

In his 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” looks at the diverse range of quality reports required of hospitals, health systems, and physicians. The fact of express and implied statements about quality can create false claims and other types of fraud. He suggests techniques in association with a formal compliance program by which risks might be avoided.

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. We do not believe gainsharing programs are about quality. They are about saving hospitals money. They have a short shelf life, distract physicians from work they should be doing, and are not sustainable as a business model. We do not comment on them to the government, although we do advise clients who choose to implement them. Most of the programs which have been greenlighted by the OIG are so overloaded with safeguards and protections that they have relatively little utility, other than to the consultants whom the OIG apparently thinks are a protection in their structuring and review of these programs. Unfortunately, in their proposed regulations, the government failed to understand the very significant policy and operational differences between programs that pay physicians a portion of shared savings and programs which pay physicians for contributing to improved hospital quality performance as measured on nationally recognized bases.

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 and this is one of them. Admitting their lack of familiarity with quality measurement or improvement techniques, they called for answers to their questions, leaving the comment period open another ninety days into February. Alice has provided a 16 page response addressing quality performance payment programs, setting forth the minimal regulation that is necessary here to safeguard patients and protect against rewarding referrals. The government has to stop using the Stark statute as a vehicle for basic regulation of issues that are highly regulated already in other contexts.

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.

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, and a major initiative on nursing home quality performance beginning with a joint publication with the Health Care Compliance Association the pace of the inexorable moves in this direction has quickened considerably. Those who ignore the risks do so at their own peril.

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” Alice explains the methodology of constructing the rates. First, she elucidates how the Design Team took into account its clear understanding that physicians would be suspicious of rates built on claims data. There are five specific financial cushions built into the rates. The result is that the care for a controlled non-insulin dependent diabetic, whose care comes primarily from a physician office, would be paid based just on the claims data at $311 a year; but, under the PROMETHEUS system, the same patient’s care would be eligible for $2329 to the physician!!! At the same time, what is most remarkable, is that this approach to the broad problem of delivering science based diabetes care would save the system represented in just the database we are using and this one condition, more than $340 million. This is a very powerful reason to move to the PROMETHEUS Payment® model. Similar results are emerging for the other conditions we will address initially as well. The more important hidden message in the article, though, is whether our specific program is implemented is not the issue. Throughout the American healthcare system, we are spending extraordinary amounts of money on potentially avoidable complications, while we are not paying providers enough to do what needs to be done to prevent those complications in the first place. Exploring which services the PROMETHEUS model considers to be potentially avoidable, and then analyzing how to avoid them, is a good way to think about how to organize clinical service delivery for better results with greater efficiency.

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”. Alice’s article with Jim Reinertsen in Trustee magazine is directed to hospital boards, but has meaning to everyone in health care. The increasing volume of quality data reporting, implied statements about quality in claims filed, and flat out false claims liability lurk. It is significant that hospital quality data reporting has been targeted by the OIG in the 2009 Work Plan as a topic of attention.
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”, she not only makes the point that quality will never reach optimal levels if physicians do not have consistent payment incentives within their groups, but she affirmatively calls for more information about organizations which do pay their physicians for quality. It is hard to believe that only 14 groups around the country, and most of them very large multi-specialty organizations, are experimenting with these efforts. If your group pays your physicians in any measure for their quality performance or based on their quality performance, please contact us at agosfield@gosfield.com with your story.
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”, Jim Reinertsen and Alice Gosfield dispute the metaphor offered by Jeff Goldsmith of the hospital-physician engagement continuum as a coral reef of predators and prey. From their continuing work with IHI and medical staffs and hospitals around the country, they continue to hold the firm belief that enormous strides can be made for better patient care and more activated physicians, when physicians are seen as the hospitals true partners and not mere customers.

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 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,” Alice looks at the data on P4P programs, the basics of traditional compensation within groups and then presents the findings from a unique survey which was sent out on her behalf by the AMGA producing responses from 14 groups around the country who are variably paying for quality as part of physician compensation. Some report significant improvement in quality performance too. Alice then looks at the payment reform models on the horizon and concludes that traditional notions of productivity, on which most current group compensation models turn, will not reward what the new systems, and most particularly the PROMETHEUS Payment® model (www.prometheuspayment.org) is designed to generate. She examines whether the Stark rules on compensation will be a barrier to changed, creative approaches, concludes that it will not, and then looks at what employment contracts will have to accommodate to make physician compensation for quality within groups real and of value to both patients and physicians.

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?”, Alice argues that unless the quality implications of hospital-physician ventures are their driving purpose, these transactions may generate short-term revenues, but they will not feed the core needs of their participants. Still, they may have an important role within the context of a well-thought out physician engagement strategy.

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 “A New Payment Model for Quality: Why Care Now?” Alice articulates some of the steps providers should be taking anyway to improve their care and their efficiency.

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", Alice elucidates the potential positive nexus between the new payment model and group configurations.

In a blog interview conducted by a surgeon who has been a client, Alice is questioned about how she became a health lawyer, her views on P4P, why she didn't become a physician and more. For a real change of pace go to http://insidesurgery.com/.

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" she articulates a perspective on how to consider a business case for quality, sets forth the quality demands on hospitals and health plans which cannot be met without full cooperation of physicians and debunks the myths that the law impedes collaboration which benefits any party economically. She then enumerates 10 specific strategies by which hospitals and health plans can advance the physician's business case for quality through activities with direct beneficial financial impact on those physicians. She also presents 6 additional strategies through which physicians can and will have to help hospitals to optimize their quality efforts.

In "Enhancing Oncology's Business Case: How the Hospital Can Help" she presents a crisper version of these arguments in terms of how oncologists can safely look to their hospitals to help them with their own quality demands.

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” Alice elucidates these connections in relationship to the application of UFT-A principles.

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"), the structure and operation of that program seemed sufficiently idiosyncratic as not to offer much by way of a model. Now the OIG has published six advisory opinions approving 'gainsharing' programs, where cardiologists and cardiac surgeons will be permitted to share in the savings hospitals generate by virtue of standardization of surgical supplies and their uses. As we note in our five principles for UFT-A, standardization for purposes of quality is important as an element of a business case for quality; but the advent of these gainsharing approvals further supports a business case for broad and deep standardization to the evidence. On the other hand, the gainsharing programs are time limited, appear to be predominately applicable in surgical contexts or analogous circumstances and hardly will serve to drive a sustainable business model for physicians.

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 they have adopted are a utilization review program, disease management and case management activities and an electronic medical record. This is meaningful because until this point there has been only one advisory opinion which addressed acceptable elements of clinical integration and now the B & T program is different. The FTC says it will review their actual implementation; but this action stands for the proposition that clinical integration is alive and well. It also means clinical integration does not require a uniform approach consistent in every respect with the hypothetical facts set forth when its permissibility was first published by the FTC in 1996. We think that UFT-A offers an option which will, by its implementation, create appropriate clinical integration to qualify for joint bargaining.

"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?" Alice Gosfield offers a view of the new Medicare Modernization Act initiatives which relate to measurement; explores why the explosion of interest in measurement and measures now; clarifies concepts around measurement; provides a snapshot of the major players and their approaches including CMS, NQF, JCAHO, AHRQ and IHI; considers the significant controversies surrounding measurement initiatives; and speculates on legal pitfalls in this essential component of quality improvement and a business case for quality.

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" Daniel Shay looks at what is proprietary to a provider, considers who is reporting data and why, and offering actual contract language as well as case law, addresses contractual protections providers should think about in entering into relationships with a range of other entities.

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”, Alice Gosfield elaborates on these themes and the legal predicates for improved physician as business case for quality.
“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” we explore the impetus for these programs, describe and analyze their principal manifestations and consider how they relate to the contractual context within which they arise, both for hospitals and physicians. We conclude that while pay for performance is an important development, it is, at best, transitional and, as we first discussed in our White Paper “Doing Well by Doing Good: Improving the Business Case for Quality” these initiatives do not make an adequate case for offering physicians improved financial margins despite increased revenue. In addition, because these are ‘add-ons’ to the existing contractual environment and the P4P programs often unfold with no supporting contract at all, they present real and unexplored challenges for the providers who participate. We continue to believe that payment systems that carve out a new approach with many of the same goals and features of these P4P programs are better.

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” Bob and his colleague Tracy Weir, acknowledge that the antitrust regulators have not seen much real clinical integration. We think that is probably true since much of what we are familiar with as purported to demonstrate clinical integration, in fact, does not go far enough. Still his article supports our case that doing what we suggest in our ‘unified field theory’ work would likely meet the regulators’ criteria.

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 in compliance can integrate its import into the fundamental mission of health care. The result can be to (1) enhance compliance itself by making it meaningful for those from whom compliance is sought, (2) save time for the clinicians, and (3) actually improve quality on an on-going basis.

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 as well as in the full version with footnotes and Appendices.Informed by the conference discussions, the paper considers

  • Current barriers to a physician business case for quality,
  • The limits of current attempts to address the business case,
  • The centrality of physicians to the American health care system,
  • Why physician time and touch with patients are essential quality problems,
  • Five principles for change which could revolutionize health care,
  • How clinical practice guidelines can provide a firm foundation for a unified system to reorder major aspects of health care delivery and accountability, not just for physicians but throughout health care; and
  • Implementation challenges that will have to be addressed to make the theory real.

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.

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.)