November 1, 2010

Contact Congress to Stop the Massive Medicare Cuts Now

Dear [Senator or Representative’s Name]:

My practice will experience devastating cuts in our Medicare payments if Congress does not intervene before November 30. Payments for physician and nurse anesthetist services will be slashed 23.6 percent on December 1 followed by an additional cut of 6.5 percent on January 1, 2011.

To date, Congress’s efforts to address temporarily the repeated cuts to Medicare physician payments have increased both the size of future cuts and the cost of repealing the discredited SGR payment formula. Last minute legislation that momentarily prevents the cuts jeopardizes the financial management of medical practices, forcing anesthesia groups like mine to make disruptive operational and billing system changes that cannot but affect our patients, again and again.

I urge you to take immediate action and comprehensively address the Medicare physician payment cuts in an update that lasts at least through the end of 2011. This will provide time for Congress and the medical community to develop a long term approach to replacing the destructive SGR formula with a fair and reasonable method of updating payments to anesthesiologists and other physicians.

Sincerely,

James Madison, M.D.

The elections will at last be over tomorrow, but that does not mean that any member of the anesthesia community should cease his or her efforts to move Congress to avert a catastrophe in physicians’ continued participation in the Medicare program. The ASA, MGMA and more than 60 other medical organizations are pushing Congress to take action during the first week of the lame-duck session – i.e., before November 30th -- to prevent the 23.6 percent and 6.5 percent cuts from taking effect. Please consider lending your voice to the urgent request for a 13 month fix to provide time for Congress and the medical community to develop long-term livable solutions.

The sample language above, on which you may wish to base your own letters, is adapted from both the MGMA and ASA models. Members of these two organizations can obtain information on their legislators’ mailing addresses at http://www.congressweb.com/cweb2/index.cfm/siteid/MGMA and http://capwiz.com/asa/issues/ respectively.

Private Sector Accountable Care Organizations (ACOs)

When we summarized the basics of Medicare ACOs in the October 11 Alert, we promised readers a future item on ACOs in the private sector. The future of Medicare ACOs is rather unsettled as we wait to see whether implementation of the Affordable Care Act (ACA) will continue in the next Congress. One of the first steps will be the publication of regulations creating safe harbors from enforcement of the anti-kickback and physician self-referral laws.

Integrated healthcare delivery systems with at least some characteristics of ACOs have already appeared in the commercial marketplace (where compliance with the anti-kickback laws is less of an issue). Those characteristics were summarized thus in the Wikipedia entry for “accountable care organization:”

While experts still have not reached a consensus on the exact components of an ACO, health services and policy literature generally describe them as structures dedicated to quality and efficiency with the mission and the authority to impose practice, reporting, and compensation standards (including penalties and rewards) across a group of physicians on behalf of the patient population. These features have been identified as carrying certain advantages including fostering quality through the greater clinical integration of care across health care settings, greater financial efficiency, and increased transparency and information about the process, costs, and outcomes of health care.

CIGNA has been experimenting with accountable care models in pilot studies with physicians in Connecticut, New Hampshire and Texas for the past two years. Last July, CIGNA started a new pilot with a 100-physician primary care practice that is part of Atlanta-based Piedmont Healthcare, which runs five hospitals. The primary care physicians will receive their usual fee-for-service payments, plus an additional amount for care coordination and other extra services. They will also be rewarded for meeting higher quality and lower cost targets.

According to its national medical director, Dick Salmon, MD, the insurer hopes to partner with more primary care practices, multispecialty groups and integrated health systems. Providers who might be interested should note that the enhanced payment incentives are temporary by intent. Dr. Salmon has indicated that CIGNA eventually plans to introduce a penalty for ACOs that do not meet targets.

The Piedmont physicians are receiving significantly more detailed data on affordability, process-of-care measures, and “efficiency” in the form of greater use of generic medications. CIGNA itself is paying for nurses who maintain contact with patients likely to benefit from enhanced care coordination, e.g., patients with chronic conditions or at risk for readmission.

Anesthesiologists should note the warning that insurers do not see ACOs as large systems with the heft to negotiate high levels of payment. Dr. Salmon warned that “if separate groups come together in a single negotiating unit, they would have to add value,” meaning efficiencies or other savings. Of course, independent entities already have to integrate some functions or share risk in order to come within the antitrust “safety zones” promulgated jointly by the Federal Trade Commission and the Department of Justice.

We are recommending that anesthesia groups devote some effort to determining prospective partners in ACOs. If you wait for the hospital, the surgery center, or the surgeons who have already made deals with the health plans and/or with the primary care physicians who will always play a central role, participation in the ACO or similar entity is unlikely to be to your advantage. There is, right now, an “ACO feeding frenzy” going on, in the words of David Harlow, who maintains one of the most highly regarded health care law blogs. Anesthesiologists who are going to come out ahead are already preparing to negotiate their roles in ACOs, by:

1. Determining which of their hospitals or health systems are in – or circling – the ACO feeding frenzy;
2. Developing alliances with the right surgeons and other physicians, and considering their relationships to the surge of hospitalists and “nocturnists” (!) being heavily recruited;
3. Thinking about how the payment pie could be divided. Is the current proportion of patient revenues attributable to anesthesia/critical care/pain medicine a possible starting point? Or the proportion of patients who receive those services? Finding the data may be more complicated than calling the hospital’s CFO, but a combination of public and private data may bring you close enough to command the administration’s attention;
4. Identifying quantifiable new cost savings and quality improvements that you can leverage for your fair share of the performance bonus. Can you work with the surgeons to schedule OR time more efficiently? Can you take steps to reduce the incidence of adverse patient events? We draw your attention to ePREOP™, the electronic preoperative anesthesia record that can coordinate patient testing and records between the surgeon’s office, the facility and the anesthesia department. ABC is partnering with ePREOP’s developers to bring this tool to the broader market.

In its annual Data Book for 2010, the Medicare Payment Advisory Commission (MedPAC) showed that hospital safety was still an issue ripe for improvement:

The above chart may suggest some performance improvement projects for which the anesthesiologists assume the lead.

As yet another part of your preparation to initiate discussions with your future ACO partners, you should know that the National Committee for Quality Assurance (NCQA), the organization that accredits managed care plans, recently published its 2011 Draft Accountable Care Organizations Criteria – on which the NCQA is seeking public comments, through November 19. This 80-page document, created by a task force comprising representatives from large integrated health care systems, academia and the insurance industry, can serve as an early guide to the infrastructure, information systems and care management processes that thought leaders are considering key to an ACO’s success.

We would point out that the Draft proposes to rate ACOs on its providing for primary care, specialty care, urgent and emergency care and inpatient care and on its ensuring the availability of adequate numbers and types of practitioners, without mentioning anesthesia at all. We hope that representatives of the specialty will take the opportunity to comment on a significant omission.

Finally, we note that ASA has established a task force on ACOs and what they might mean for anesthesiology. This is a subject that we expect to continue studying and reviewing for our readers, whose questions and comments are always welcome.

With best wishes,

Tony Mira
President and CEO