CMS has announced the selection of the first 27 Accountable Care Organizations (ACOs) to participate in the Medicare Shared Saving Program.  The 27 organizations have agreed to be responsible for improving care for nearly 375,000 beneficiaries in 18 states through better coordination of services among hospitals, physicians and other providers. ACOs organize to achieve quality improvement and greater efficiency, with a goal of ensuring “that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. … When an ACO succeeds both in both delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program.” (from the CMS ACO web page). The ACOs selected will involve more than 10,000 physicians, 10 hospitals and 13 smaller physician-led organizations.  More than half of the ACOs are being led by physicians,...

Virtually all large anesthesiology practices have a corporate website. Some are quite detailed and complex. Fewer medium and small practices maintain a web presence. Should every practice consider creating a practice website or upgrading its current site?After examining a number of anesthesia practice websites, one can see that most have common elements and purposes. Before considering website design, the practice should seriously consider the purpose of the website and its intended effects.The reasons given by anesthesia practices for expending the time and money needed to produce an effective website are to implement one or more of the following:Establish a “web presence”Recruit anesthesia personnel via the websiteProvide patient informationAssist in the patient billing processSchedule anesthesiologists via surgeon preferenceInternal uses such as maintaining call schedules, document retrieval and communications.Marketing to patients, surgeons and facilities seeking anesthesia coverage.WEB PRESENCECurrently, almost every business has a website, so anesthesiology practices may believe that they too should...

Consolidation in the hospital sector has proceeded at a rapid pace in the last few years.  Hospitals, like anesthesiologists and other health care professionals and organizations, are seeking the advantages of combined size to secure their future in a marketplace undergoing a revolution with an unknown outcome.  Oral argument before the Supreme Court on the constitutionality of the Affordable Care Act, discussed in our Alert of April 2nd, did nothing to mitigate the uncertainty. The Federal Trade Commission (FTC) scored a significant victory last week when a federal District Court judge in Rockford, Illinois halted the acquisition of Rockford Health System by a competitor, OSF Healthcare System, until the FTC can conclude an administrative review of the deal (including all appeals, which means a delay of at least a year even if the hospitals ultimately prevail). According to the FTC, the acquisition would violate antitrust law by reducing competition in...

The variety of commonly used modalities for the management of post-operative surgical pain makes it imperative that practitioners understand the specific documentation and billing requirements of each option. Listed below are the five most common approaches and their corresponding claims submission guidelines. As is always the case, reimbursement will vary by payer.Intravenous Patient-Controlled Analgesia Management (IV PCA) – Surgeons are reimbursed for routine post-operative pain management as part of their global fee. Due to this fact, Medicare does not allow anesthesiologists to bill for this service. However, many non-Medicare payers do. The physician must see the patient on a post-operative day and document a progress note to include a problem focused history and exam with straightforward medical decision making. The typical code billed for this service is “subsequent inpatient visit” code 99231 (2 units).Patient-Controlled Epidural Analgesia (PCEA) – If an epidural is placed for post-op pain and is not the...

The United States Supreme Court allocated more time to oral argument on the constitutionality of the Affordable Care Act (ACA) last week than it had to any other case in the past 50 years.  Four distinct questions were before the Court during six hours of argument spread over three days.  In chronological order of consideration, these questions were: Does the 1867 Anti-Injunction Act, which bars pre-enforcement litigation over a tax, prevent the Court from hearing the challenge to the insurance mandate? Can Congress compel individuals to buy insurance or pay a penalty (the “individual mandate”)? Can the rest of the ACA survive if the individual mandate is struck down? Can Congress pressure states to expand Medicaid coverage by threatening to withhold funds?The Individual MandateThe room was packed and buzzing with excitement.  Some people clearly had slept outside last night.  Even some of the attorneys general from the challenger states had to...

From time to time anesthesia groups find that they need to reassess their administration or decision-making processes. This can involve everything from tinkering with how routine day-to-day administrative activities are carried out, to totally revamping the group’s governance structure.Reassessments can come about for a variety of reasons. There may have been a significant growth in the number of physicians or CRNAs, or an increase in the number of practice locations. The group may have encountered internal strife without adequate governance systems in place. The group may find itself incapable of making decisions or reaching consensus in a timely or efficient manner. A group may have relied too heavily upon busy physicians to carry out non-clinical duties, or one physician may (by choice or otherwise) be overburdened with administrative responsibilities.Issues in a Small Group. One of the assumed advantages of a smaller group is that it can function in a “more efficient” manner....

Opportunity and risk. Risk and opportunity. Janus-like sides of the same coin. Of course, the greater the opportunity, the greater the risk. In a medical practice sense, anesthesiologists are surrounded by risk and are supremely aware of its existence. On a daily basis, you administer drugs that under other circumstances would be deadly. You’re also cognizant of the risk-reward analysis made by your patients in undergoing surgical procedures, as well as your own need to obtain informed consent from them. But many anesthesiologists are oblivious, or even averse, to the risk-reward duality in a business sense as it impacts their anesthesia group. In the group business context, success, that is, opportunity, is associated with the income side of the equation: increasing realized income per unit, increasing the number of well-reimbursed units generated, and increasing the amount of hospital stipend dollars received. Anesthesia groups are generally less impacted by the risk, or expense, side of the equation. But note the...

Another dragon is slinking away, although it isn’t yet slain.  On February 15, 2012, Health and Human Services Secretary Kathleen G. Sebelius announced that “HHS will initiate a process to postpone the date by which certain health care entities have to comply with International Classification of Diseases, 10th Edition diagnosis and procedure codes (ICD-10).” In other words, medical practices no longer need to ensure that they will be ready for ICD-10 by October 2013. The press release noted that the final regulation adopting ICD-10 as a standard was published in January 2009, and that it set a compliance date of October 1, 2013 (itself a delay of two years from the compliance date initially specified in the 2008 proposed rule).  HHS has not given any hint regarding a new compliance deadline.  ICD-10 is a set of codes used to identify and describe diagnoses (ICD-10-CM) and procedures (ICD-10-PCS), replacing ICD-9. It will...

Please take a moment to participate in the second annual ASA nationwide survey on anesthesia drug shortages. This brief survey will help ASA continue to work with legislative and regulatory policymakers to develop policies that help to avert drug shortages, provide advanced notification and mitigate the effects of drug shortages. Data from last year's survey was instrumental to ASA in demonstrating the urgency of addressing drug shortages.      For this survey to be successful, ASA will again need a high participation rate of members.  Please complete this survey and encourage other ASA members to do so as well. http://www.surveymonkey.com/s/asadrugshortagesurvey I. Revised Anesthesia Conversion Factors CMS has just updated the Medicare conversion factors (CFs) for anesthesia services.  The new national, unadjusted CF is $21.52, up from $21.41 for the first two months of 2012.  Download the list of locality-adjusted CFs here. As noted on the CMS website, “Medicare payment rates under...

For the last several months the literature on Accountable Care Organizations (ACOs) has flourished. So has the volume of workshops, seminars and webinars, all with the intent of educating providers on what the future will look like, and many addressing how physicians might participate. Independent anesthesia groups are trying to not only understand the ACO rules but are also working hard to determine how they will function in any of the possible structures that emerge in their communities.There are various traditional obstacles to the formation of multispecialty groups, such as those posed by the antitrust and antikickback laws.    The Patient Protection and Affordable Health Care Act calls upon the Secretary of Health and Human Services (HHS) to adopt regulations that will foster the development of ACOs, and that includes resolving potential conflicts between the antitrust, antikickback and Stark laws and the efficiencies expected to result from the formation of ACOs.Given that...

??When asked why he robbed banks, Willie Sutton responded, “Because that’s where the money is.”Ambulatory surgery center (“ASC”) owners, often surgeons, seek to obtain a share of anesthesia fees for the same reason. But instead of a gun, many are turning to a new model of money extraction, the so-called “company model.”The abrupt bank robber approach to demanding a kickback is clearly illegal: “Bob, if you want to provide anesthesia at Greenacres ASC, you’ve got to pay us thirty cents on the referred dollar”.Although there are far more ASC owners willing to take the bank robber approach than the industry likely will admit, some ASCs are choosing a slightly softer approach — forcing the anesthesiologists working independently at the ASC to instead work for an ASC affiliated entity that distributes a share of the anesthesia fees back to the ASC owners.“Bob, if you want to provide anesthesia at Greenacres ASC, you’ve...

In these turbulent times for the business of anesthesia groups, in which the pace of, to use Joseph Schumpeter's term, creative destruction, is quickening, it is more important than ever to take a strategic approach to the way in which exclusive contracting and group structure and group functions are intertwined. To simply keep on keeping on with a pure focus on patient care, thinking business success, or even business survival, will follow, is folly.Consider this very instructive example:In the late 1920s, Walt Disney had his first big commercial success with a cartoon character named Oswald the Lucky Rabbit. Disney had an exclusive contract with Universal Pictures for the distribution of Oswald cartoons.  It paid Disney a tidy cut, but not nearly enough. So Disney, based in Burbank, set off on the train for Universal’s headquarters in New York City to renegotiate the terms of the deal. But Universal knew he was coming. And...

There are many forces affecting anesthesia groups today such as the pending Supreme Court ruling on the Patient Protection and Affordable Care Act, high unemployment, pending cuts in Medicare, and a very slow economy.  Regardless of what one believes, strategically addressing these issues is paramount in providing the necessary road map for the future.  Otherwise, a group may find itself in an unfavorable position.  This article seeks to explore the benefits of strategy for anesthesia groups. By definition, strategy[1] is “a plan, method, or series of maneuvers or stratagems for obtaining a specific goal or result: a strategy for getting ahead in the world.”  Clearly, developing strategy positions a group for success.  Furthermore, Sun Tzu describes the importance of thinking through strategy as such, “the general who wins a battle makes many calculations in his temple ere the battle is fought. The general who loses a battle makes but few calculations beforehand. Thus do many...

Have you heard about the federal privacy and security compliance audit pilot program?  The Health Information Technology for Economic and Clinical Health (HITECH) Act, passed as part of the 2009 stimulus package, requires the Department of Health and Human Services (HHS) to conduct periodic audits to ensure covered entities and business associates are complying with the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules and Breach Notification standards.  To implement this mandate, the HHS Office of Civil Rights (OCR) is piloting a program to perform up to 150 audits of covered entities to assess privacy and security compliance. The pilot phase began in November 2011 and will conclude by December 2012. The HITECH Act enhances HIPAA’s privacy and security provisions by requiring “covered entities” such as physicians and their business associates to provide for notification in the case of breaches of unsecured protected health information (PHI).  The breach...

Written by: Neda Mirafzali, Esq. and Kathryn Hickner-Cruz, Esq.The Health Law Partners, P.C., Southfield, MIIn the Summer 2011 issue of the Communique, we analyzed the then-new Medicare Shared Savings Program (“MSSP”) accountable care organization (“ACO”) proposed rule (“Proposed Rule”) (issued by the Centers for Medicare and Medicaid Services (“CMS”) on April 7, 2011) as it related to anesthesiologists. At that time, physicians’ desire for involvement in the MSSP (which was born as part  of President Obama’s healthcare reform law) was bleak, at best.  The Proposed Rule introduced barrier after barrier after barrier that left the medical community disappointed and angry.  Anesthesiologists were left with no clear understanding of the role they would play in the new push for better care for individuals, better health for populations, and lower growth in expenditures—CMS’ three-part aim for ACOs.  Anesthesiologists were dubious as to whether they would actually enjoy a piece of the Medicare shared savings...

Anesthesia is the quintessential service specialty. Establishing and maintaining a consistently strong  relationship with a hospital, a clinic or an ASC is no easier for an anesthesia group practice than for any other type of service provider, be it car mechanic, internet provider or hair stylist; today’s medical consumers know they have options that give them leverage in demanding services and loyalty. For too many anesthesia practices this is a relatively new and somewhat disconcerting state of affairs. Anesthesia vulnerability to replacement has grown in direct proportion to the amount of financial support provided by the facility; practices that receive no subsidy support clearly have the strongest support, at least to the extent that they provide quality care. Competition for anesthesia contracts has ushered in a new era of service expectations and changed the perception of the role of the specialty in the facility. Quite simply consistently good outcomes are simply...

In any financial transaction, the person holding the money is at an advantage.  Getting money back from someone who should not have been paid is harder than not making the payment in the first place.   CMS knows this, and that is why it is placing a new emphasis on prepayment review of claims.  Originally slated to begin on January 1, 2012 the prepayment review initiative will now formally launch in June.  The number of prepayment reviews is going to increase from 1.2 million to 2.7 million claims per year. There is a large amount of taxpayer dollars at stake.  In 2011, the Medicare fee-for-service improper payment rate was 8.6 percent, or $28.8 billion in estimated erroneous claims payments.  Medicaid adds another $21.9 billion.  During 2011, CMS recovered $5.6 billion in fraudulent payments, an increase of 167 percent over 2008. The increase in recoveries is attributable in major part to the $350...

WHY FEDERAL INSURANCE REGULATION?Normally, insurance companies are regulated by the states. As a result there are hundreds of statutes and rules affecting companies that operate in multiple states. The National Association of Insurance ComNAIC, missioners (NAIC) issues guidance to standardize insurance laws, but states are not required to follow its recommendations. As might be expected this results in increased costs as companies design multiple products to comply with diverse and sometimes conflicting state regulations and formalities.For the most part the Federal Government has not interfered in state insurance laws, leaving the regulation of the industry to state regulators. Non interference has worked adequately during soft markets in which insurance is easy to find.IMPACT OF A “HARD MARKET”During “hard” markets in which insurance coverage is difficult to obtain, the federal government has stepped in to allow an insurance company to operate in many states as long as one state agrees to license...

 Last week we discussed the growing trend toward including performance measures in contracts between hospitals and anesthesia groups.  We identified clinical quality, efficiency and patient satisfaction measures developed by the Surgical Care Improvement Project (SCIP), the Medicare Physician Quality Reporting System (PQRS), the American Society of Anesthesiologists (ASA), the Anesthesia Quality Institute (AQI), Press-Ganey and the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS).  All of these measures can be the basis of hospital or ambulatory surgery center contracts for performance-based payment.Many contracts set forth the quality, efficiency and customer satisfaction activities that are part of the anesthesia group’s quid pro quo for their hospital compensation package without explicitly linking performance rates to payment.  Increasingly, though, the anesthesiologists must meet or exceed agreed-upon benchmarks to earn their payment.Choosing BenchmarksThe benchmarks can be external or internal.  External benchmarks allow for comparison to similar institutions or providers – or to national or...

Health information technology has become the colossus of high quality, high- efficiency medical practice. Anesthesia Business Consultants continues to expand our resources in the area of HIT – as do all of you. With the lead article in this issue of the Communiqué, we introduce to you a major new resource: Bryan Sullivan, Director, EMR and Clinical Integration. Bryan’s article on cloud computing explains an important direction in which HIT is moving.Anesthesiology is on its way to becoming a complete perioperative discipline – as it must, in an environment that will be dominated by integrated, accountable healthcare delivery systems. Richard P. Dutton, MD, MBA, Executive Director of the Anesthesia Quality Institute, describes the role of the AQI in pre- and post-anesthesia assessment in his latest article. In the write-up of his interview with Parish Management Consultants’ Al Patin, “Anesthesia Leadership in the Preoperative Clinic,” ABC Vice President of Client Services Bart...