The American Hospital Association (AHA) has just released a report that describes the strategies that will help its nearly 5,000 member hospitals succeed in the value-based healthcare environment.  This report, Metrics for the Second Curve of Health Care, will be of interest to all anesthesiologists who want to understand and meet their hospitals’ needs—and that should include all anesthesiologists who work in a hospital.  Whether you have held the anesthesia franchise at your institution for decades with no competition, or whether you are seeking ways to improve or even launch a relationship with a hospital, you will benefit from knowing administration’s goals.The title of the new AHA report comes from futurist Ian Morrison’s “first curve,” the current volume-based healthcare payment environment, and “second curve,” the coming value-based market.  It is a sequel to the AHA’s 2011 synthesis of interviews with hospital and health system leaders entitled Hospitals and Care Systems of the Future. ...

The creation of the Medicare/Medicaid Electronic Health Record (EHR) Incentive Program (commonly known as the “Meaningful Use Program”) gave physicians and hospitals a strong incentive to integrate EHRs into their practices. (For more information regarding Meaningful Use, see “Proposed Meaningful Use Stage 2—What it Means to the Anesthesia and Pain Communities” published in the Spring 2012 issue of the Communiqué.) As part of their EHR system, many anesthesiologists have started using mobile devices such as laptops, tablets and smartphones. If used properly, these devices allow access to patients’ EHRs from anywhere that a WiFi connection (or cell phone signal) is available. This often results in quicker responses to questions from patients, families, and other providers. While the use of mobile technology has benefits, anesthesiologists choosing to utilize this technology must pay special attention to making sure they do so in a manner that conforms to their group’s or facility’s security policy...

There is no doubt that the emergence of the Electronic Health Record (EHR) program is changing the way providers capture documentation on the front end. According to the 2012 NCHS Data Brief, 55 percent of physician groups have already adopted an EHR. Among the 45 percent that have yet to implement an EHR system, nearly half plan to purchase or use a system already purchased this year.1 Hospitals are also purchasing and installing EHRs at a rapid rate. EHR templates are rapidly gaining footholds despite some growing pains. CMS has issued advice on the use of checkboxes and drop-down menus accommodating discrete data capture. Despite access to such “documentation tools” via point-and-click templates, most physicians are complaining that it takes longer to document an encounter in an EHR than to previously dictate it. The RAND Corporation released a paper describing the phenomenon that occurs when an industry’s technological capabilities improve at...

In last week’s Alert, we summarized the requirements for participating in Medicare’s Physician Quality Reporting System (PQRS) in 2013.  One of the major changes to the PQRS program—which we deferred until this week—is the implementation of the Value-Based Payment Modifier (VBM) for groups of 100 or more eligible professionals (EPs), consisting of physicians and CRNAs and others described in detail below.Groups of 100 or more EPs — Watch out for the Value-Based Payment ModifierThe Patient Protection and Affordable Care Act (ACA) requires that Medicare implement a Value-Based Payment Modifier (VBM) that would apply to Medicare fee-for-service payments beginning in 2015. The VBM is intended to pay physicians differentially based on the quality and cost of their care.While CMS must adhere to certain statutory requirements, such as using the modifier to promote shared responsibility and systems-based care, the ACA gives CMS considerable flexibility in terms of implementing the VBM. The 2013 Medicare...

The anesthesia business, regardless of whether one chooses to define it as the practice of medicine, nursing, or some hybrid, is in the midst of upheaval. Increasing market consolidation, mergers, acquisitions and introduction of private equity funding have made the business of managing anesthesia delivery services increasingly complex. Bear in mind that delivering anesthesia and managing the delivery of anesthesia services are two very different things. Our unparalleled improvements in patient safety, quality, and, ultimately, morbidity and mortality make us justifiably proud of the specialty’s success and the envy of the rest of health care. One would think that this remarkable history of clinical success would provide stability for the business side of anesthesia practice. After all, the clinical product that we provide is orders of magnitude safer than when I entered the specialty 25 years ago. If anything, however, I believe our advances have actually laid the foundation for the...

Participating in Medicare’s Physician Quality Reporting System (PQRS) has taken on a new flavor this year.  While until now participating has meant a potential annual bonus of several thousand dollars, not reporting in 2013 will entail a penalty in 2015.  Losing out on a bonus is less galling than forfeiting a percentage of each remittance.  No anesthesiologist, CRNA or pain physician is doomed to lose money for failing to report the applicable PQRS measure(s).  This Alert will provide a reminder of the steps you need to take to earn the bonus and to avoid future penalties. It is a testament to the undue complexity of the program that we are now in its seventh year, and yet uncertainty lingers.  As a reminder, the incentive payments and “payment adjustments” for each year are as follows: YearPayment/AdjustmentMadeReporting YearPayment or (Adjustment) 200820071.5%2009 20081.5% 201020092.0% 201120102.0% 201220111.0% 201320120.5% 201420130.5% 201520140.5% 20152013(1.5%) 2016 onward2014 onward(2.0%)  ...

Several recent publications have described strategies for hospitals and ambulatory surgical centers to improve their operational health—their profitability, to be blunt.  Anesthesiologists are well aware of the role that they can play in O.R. management and of the need to assume O.R. leadership responsibilities in order to remain competitive.  There are some valuable ideas to be gleaned from articles and presentations directed to O.R. managers.  Anesthesiologists can take charge of most, if not all, of the processes described below. Many ways to improve O.R. efficiency are already familiar.  The value of on-time starts, fast turnover times and block scheduling, to name but a few such ways, is a given.   Jeffry Peters’s February 28, 2013 webinar hosted by Becker’s Healthcare and entitled Managing Surgical Services Lines under Accountable Care and Value-Based Purchasing identified some additional operational changes that would help hospitals obtain a “sustainable competitive advantage.”  Peters is the president and CEO...

Over the New Year holiday, Congress finally passed legislation to stop the U.S. economy from going over the fiscal cliff. The new law included a temporary reprieve from the 26.5 percent cut provided for by the Medicare Sustainable Growth Rate (SGR) formula. There will be no SGR reduction throughout 2013—a development that lets us all breathe a deep sigh of relief, even though the formula itself, and its future depredations, are still in the law. Medicare payments to physicians and hospitals are not inviolate for the coming year, it must be noted: automatic two-percent reductions will hit Medicare as part of the “sequestration” process just two months from now if Congress and the White House do not reach another deal. For many anesthesia practices, the runup to negotiations with hospitals and payers is a cliffhanger—indeed, even contemplating future negotiations often feels precarious. Last year, one of the national anesthesia practice management...

In meetings and conferences where the presenter asks anesthesiologists and pain physicians whether they are participating in—or negotiating with—an Accountable Care Organization (ACO), very few, if any, of the doctors raise their hands.  Everyone is aware of the concept of ACOs, but almost no one has any experience with them yet.  Nevertheless, there are significant ACO developments across the country.Tens of millions of patients are already receiving medical services through ACOs. A year ago—even before the United States Supreme Court’s decision upholding most of the Affordable Care Act—32 ACOs were participating in the Medicare Pioneer demonstration program  and 27 more had signed up to become Medicare ACOs.  Becker’s Hospital Review briefly described 80 Accountable Care Organizations to Know, both commercial and Medicare, in an online article dated April 16, 2012.  Many of these ACOs were formed by hospitals and health systems in partnership with health plans.  They range in size from as...

I am an anesthesiologist. The leadership of my small group of 15 physicians has been negotiating a merger with the large group in a nearby city. They have made some compelling arguments for the strategic advantages of an affiliation with a larger entity. But as logical as the rationale for merging is, so are the concerns and the questions raised by detractors. It is just not clear that all the disruption of closing out our current entity and transitioning to employment status with the big group will result in a more favorable situation for us as individuals or even as a division of the new entity. I personally worry about losing control of my practice and the clinical autonomy that attracted me to this practice in the first place. The fact is that I am still unsure how I will vote when we all get together to make a final...

CMS’ Medicare Recovery Audit Contractor (RAC) Program has now been in effect in all 50 states for three years.  The RACs, readers will recall, are contractors who are compensated on a contingency fee basis for finding and recouping overpayments made by Medicare to physicians, hospitals and other providers.  Each of the four RACs is responsible for identifying overpayments—and underpayments—“in a geographically defined area that is roughly one-quarter of the country. In addition, [they] are responsible for highlighting to CMS common billing errors, trends, and other Medicare payment issues,” according to a report from CMS to Congress released earlier this month and entitled Recovery Auditing in the Medicare and Medicaid Programs.The RACs analyze Medicare FFS claims on a post-payment basis, using three different processes: (1) automated reviews of claims data, (2) semi-automated reviews where the RAC allows the provider to substantiate the claim with supporting documents and (3) complex reviews, where a qualified...

Part I of this survey (Alabama-Missouri) appeared in the Fall 2012 issue of the Communiqué. In Part II, we summarize the laws and regulations that require health plans to pay claims within a given period in the remaining states (Montana-Wyoming), as well as the penalties for violations.     ...

"Physicians’ relationships with the pharmaceutical industry should be transparent and focused on benefits to patients."  (Jeremy A. Lazarus, MD, President, American Medical Association, Statement on Final Physician Payment Sunshine Act Rule, February 1, 2013.)“You should know when your doctor has a financial relationship with the companies that manufacture or supply the medicines or medical devices you may need. Disclosure of these relationships allows patients to have more informed discussions with their doctors.” (Peter Budetti, MD, JD, CMS Deputy Administrator for Program Integrity, quoted in Rule Increases Transparency in Health Care, press release, February 1, 2013.)Have you ever received a consulting fee, a meal, a textbook, a mug or a pen set from a drug company or a device manufacturer?  If the value of the item was more than $10, it would likely be reportable to a new registry under the Physician Payment Sunshine Act and the final regulations (“Final Rule”) published by CMS on February...

The creation of Health Insurance Exchanges (HIEs) is among the most important changes to the health care system made by the Affordable Care Act (ACA).  The HIEs are marketplaces where consumers and small businesses can shop for private health insurance plans. Many anesthesia and pain medicine patients will be covered by health plans participating in HIEs beginning as soon as October 2013.  Payment rates under such plans have the potential to make or break providers.  Additionally, some group practices may choose to offer coverage through the HIEs.  A basic familiarity with HIE structure and operations is therefore in order. Who The ACA provides that effective January 1, 2014, there shall be at least one HIE in each of the fifty states.  States have the option of (1) setting up their own HIEs, (2) partnering with the federal government to run an exchange, or (3) opting out—in which case, the Department of...

The Anesthesia Quality Institute (AQI) is a non-profit corporation created to improve outcomes in anesthesia, based on aggregating, analyzing and reporting electronic data. Over the past three years AQI has recruited more than 220 anesthesia practices, from 44 states, to contribute data to the National Anesthesia Clinical Outcomes Registry (NACOR). The aggregate data has provided a unique and valuable perspective on the specialty of anesthesiology: What we do, what we know, and how we do it. At the same time, a picture is emerging of the other side of our national practice: What we don’t know and what we don’t do. The widest performance gap in anesthesia today is our collective lack of insight regarding outcomes of the care we provide. Even among the participating groups in NACOR—a self-selected ‘choir’ of early adapters—fewer than 1 in 5 have the infrastructure to recognize and respond to the following event: Mrs. Smith,...

Gastrointestinal endoscopy is one of the safest and most commonly performed adult procedures. The record of safety extends to the sedation or anesthesia for both upper and lower GI endoscopy.  Because of both the safety and the frequency of the procedure, anesthesia for GI endoscopy has been under scrutiny by health plans for a decade or more.  Lately, the number of claims denied for lack of “medical necessity” for endoscopic anesthesia services have once again been growing.  Without taking any position on the merits of anesthesia vs. moderate sedation in connection with endoscopies and especially colonoscopies, we would like to remind our audience of the principles followed by payers in evaluating the medical necessity of anesthesia for these procedures. The differences between anesthesia and moderate sedation Moderate sedation (aka “conscious sedation”) is a “drug-induced depression of consciousness during which patients respond purposefully to verbal commands, either alone or accompanied by light tactile...

Everyone involved in the healthcare industry will inevitably learn about the confusing aspects of medical health insurance. Just when you thought you had a grasp on the insurance marketplace another complexity presents itself.  Sometimes what you might have thought of as an insurance plan turns out not to be insurance at all. There is a variety of well-known insurance plans available in the market today. Some of these plans are government-run, starting with Medicare and Medicaid. Others are private or commercial managed care plans offered by entities that include Blue Cross and Blue Shield, United Healthcare or Aetna.  Then there is a less well known group of companies that market themselves as health benefit plans but that are in reality simply claims repricers, or discount brokers and vendors, i.e., “rental networks” or ”silent PPOs.” What is a “Rental Network PPO?” A rental network preferred provider organization or medical discount network or...

Memorial Hospital—a hypothetical “Memorial Hospital”—considers itself extremely fortunate to have renewed its contract with Associated Anesthesiologists—a hypothetical “Associated Anesthesiologists”—for another three years.   Although one newly-formed anesthesia management company (AMC) and one freshly-capitalized market leader among AMCs have approached Memorial, the hospital let the anesthesia group know that it would not be entertaining any proposal.  If Memorial were to enumerate the attributes of Associated Anesthesiologists for which it is so grateful, the list would be as follows:1. Associated Anesthesiologists keeps the surgeons happy.Surgical volume is up slightly and the trend line is positive.  The last surgeon to approach hospital administration with a complaint about OR time and the service provided by the anesthesiologists herself left the area several years ago.  The rumor about the orthopedic surgeons building their own ambulatory surgery center pops up every year, but the chief of the service is not interested.2. Associated Anesthesiologists no longer receives income supplementation.The...

There continues to be considerable confusion as to which post operative pain management services are reimbursable and the criteria for ensuring that payment for them can be consistently obtained. Part of the issue has to do with the different modes of acute pain management currently being used across the country, but another point of confusion pertains to the provider categories for each type of service. While individual payor policies may vary, the essential parameters are quite consistent across all jurisdictions.  Irrespective of what a particular group’s billing practices have been historically, it is a good time to reexamine previous assumptions and review current guidelines. The fact that a given payor has not questioned charges for a particular service historically is no guarantee that payments were received legitimately or that a subsequent audit might not uncover a significant overpayment. It should be noted that contract terms can be misleading; and all terms...

The most important event of the year to date, for anesthesiologists and for everyone involved in health care in any way, was of course the Supreme Court decision upholding the Affordable Care Act. Also of great consequence to the anesthesia community was the “company model” Advisory Opinion issued by the Office of the Inspector General on June 1, 2012. Mark Weiss, Esq., whose name is familiar to many readers and for whose frequent contributions to the Communique we are very grateful, describes the company model and the management fee model “other schemes” and explains why these are illegal if they represent payment to the ambulatory surgical center for giving physicians access to Medicare patients. Mr. Weiss’s article adds further clarity by placing the OIG’s June opinion in the context of earlier determinations.A set of other frequent contributors, Abby Pendleton, Esq., Carey Kalmowitz, Esq. and Adrienne Dresevic, Esq., all members of the...