Top Challenges for Anesthesia Practices in 2014 - ABC's Perceptions

 

Just like the physical universe, the anesthesia practice universe continues to expand with increasing speed—or at least that is how it seems.  The number and breadth of the challenges we face are larger than ever.  To the familiar concerns such as disappointing payment rates, declining hospital income support and growing service demands, we can add the confusion and worries created by Obamacare and explosion of work occasioned by information technology.  In most challenges, we know, there are also opportunities, some more accessible than others, of course.

ABC senior staff keep their eyes on practice management trends in order to help our clients (and our readers) understand and do well in the changing landscape.  The most important challenges and opportunities that we see for 2014 include the following:

1. Rollout of the Affordable Care Act (ACA).  Expect more business uncertainty.  Fifteen of the 16 key provisions of the ACA will take effect in 2014, most likely increasing the number of patients who will seek medical and surgical care.  As more people enroll in the health insurance exchanges, payments will tend to be lower and the payment process will likely be slower.  Sound planning can mitigate cash flow problems.
2. Consolidation and other structural changes.  Strategic positioning will be significant for many anesthesia practices and a key focus for some.  Everyone will need a strategy to identify reasonable and profitable expansion opportunities, as well as to evaluate, repeatedly if not continuously, whether it is time to expand, to merge or to sell out.  Anesthesia groups will also want to be among the first to know of hospital ownership and alignment shifts.
   • For some anesthesiologists, employment will look like a good solution to the uncertainties of the health care marketplace.
3. Anesthesia care team.  Personally performing all of one’s own cases will be an option for fewer and fewer anesthesiologists.  The greater efficiency derived from and value delivered through the care team, in the bulk of anesthesia cases, will make that model increasingly attractive.  Mid-level providers such as nurse anesthetists will continue to seek to broaden their scope of practice.
4. Hospital expectations.  Given shrinking resources, it will be ever harder to meet the expectations of hospital administrators with regard to:
   • Coverage requirements, especially anesthesia services outside the OR;
   • The implementation of Electronic Medical Records (EMRs);
   • Justification for income support, e.g., stipends.  Groups receiving stipends will be facing pressure to demonstrate their value or to accept a reduction, which may force them to review their delivery model or fend off external groups that want to take over the contract.
   • Reducing the cost of anesthesia care.
5. Payer efforts to control health care costs.  Fee-for-service payment is eroding and new models of outcomes-based compensation are coming closer for anesthesiologists.  These will include narrow networks, bundled payments, episodes of care and shared savings programs in which physicians split savings with the hospital or with the insurer.
   • High-deductible health plans: PriceWaterhouseCoopers estimates that employers offering high-deductible health plans as their only option have grown 31 percent since 2012.  The patient’s share of the allowable payment is much higher and tends to be difficult to collect.  Groups should develop methods to identify patients with these plans and establish processes to hold claims strategically so as to collect from the health plan after the deductible is satisfied.
6. Partnering with health systems.  On December 23, HHS announced the latest round of accountable care organization (ACO) contracts in the Medicare Shared Savings Program, adding 123 additional ACOs and reaching about 1.5 million more Medicare beneficiaries.  Anesthesia practices should consider knocking on the door of potential ACO partners—the partners are not likely to be looking for anesthesia in the early stages of formation.  Anesthesiologists will need to obtain data on how much of the total payment for one of the new units of service—an episode of care, or a time interval, or a surgical package, for instance—currently goes to each of the contributing providers providers.  They will then need to determine how much accountability (payment) risk to take on, and how to meet their performance goals.
7. Perioperative Surgical Home.  The American Society of Anesthesiologists is investing a great deal of energy and resources into developing the specialty’s answer to the Patient-Centered Medical Home that centers on primary care.  Will the PSH take off in 2014?  And how should an individual group work with the model?
8. Quality and Performance Measurement.  Selecting, documenting and reporting measures both for external agencies such as CMS and for internal benchmarking are becoming more complicated.  Just keeping track of the different requirements is a challenge.
   • PQRS:  Eligible professionals (EPs) including anesthesiologists and CRNAs risk a two-percent cut in their Medicare remittances in 2016 if they do not successfully report PQRS measures in 2014.  CMS increased the number of measures required for successful reporting starting next year and also warned that a zero-percent performance rate will not be counted.
   • Value-Based Purchasing Modifier:  Groups of 10 or more EPs run the risk of additional penalties if they do not participate in PQRS as a group (See the December 9, 2013 Alert Anesthesia and the Final Medicare Fee Schedule Rule for 2014.)
   • Patient Satisfaction:  In which of the multitude of surveys and assessment instruments, not least of which is the HHS HCAHPS, will the anesthesia group need to participate?
   • Administrative and Efficiency Metrics:  Pressure to produce data showing timely first-case starts and room turnover times will not let up.
   • AQI-NACOR:  Getting the most benefit out of reporting the group’s data to the Anesthesia Quality Institute’s National Anesthesia Clinical Outcomes Registry will take some time and careful thought.
9. ICD-10 coding.  Beginning on October 1, 2014, ICD-10 diagnosis codes will be required on all claims.  Preparing for the switch from ICD9—from a set of approximately 14,000 codes to a set of approximately 69,000 more specific and more flexible codes—will consume significant administrative resources and involve some critical changes in physicians’ documentation of their services.
10. Health Information Technology—Meaningful Use.  Physicians will need to begin participating in the Meaningful Use incentive program, if they have not already done so, to avoid financial penalties beginning in 2015.  Some anesthesiologists will still be playing catch-up to meet Stage 1 requirements, while others will embark on the more demanding Stage 2 requirements.  One of the biggest challenges in attesting to Stage 2 of the MU program is meeting the requirements for exchanging patient information electronically with other providers, many if not most of whom will be using different EHR systems.
11. HIPAA risk analysis.  More stringent HIPAA regulations require practices to conduct and document a risk analysis for their protected health information (PHI), to review their policies and procedures for mitigating damages when PHI is lost or stolen, to be able to send health information to patients electronically and to update their privacy notices.
12. Medical necessity scrutiny and audits of anesthesia providers.  Carriers will adopt new medical policies defining more narrowly “medical necessity” and other requirements for payment such as provider certification for transesophageal echocardiography.  The Recovery Audit Contractors as well as the OIG will target an increasing number of anesthesia issues including separate payment for pre-operative visits and post-operative pain management.

This list of top challenges is not exhaustive.  The issues we have identified are not new—and nor, in most cases, are the possible strategies for addressing the challenges and turning them into opportunities.  Other topics will certainly emerge in the coming year, including robotics in anesthesia and the application of new analytic tools to Big Data.  We look forward to helping prepare you—and ourselves—for all the developments ahead.