The attorney-client privilege seems like a simple enough concept, but it is full of complexities.  Anesthesiologists and administrators who handle communications with their groups’ lawyers need to know how to protect the privilege.  Ongoing whistleblower litigation, U.S. ex rel. Baklid-Kunz v. Halifax Hospital Medical Center, Case No: 6:09-cv-1002, 2012 U.S. Dist. LEXIS 158944 (M.D. Fla. Nov. 6, 2012), offers valuable guidance. The attorney-client privilege shields certain confidential information from discovery or from admission into evidence in a court proceeding.  The communication is protected so long as (1) it was between attorney and client, (2) it was made in confidence for the purpose of rendering legal advice and (3) it remains confidential.   Communications with outside counsel are presumed to be privileged, but the presumption is rebuttable.  The burden of proving that the privilege has been lost or waived is on the other party.   In the case of communications with in-house counsel, whose...

Anesthesia Business Consultants (ABC) announces today that the combination of its F1RSTUse technology with myAnesthesia from iMDsoft has produced the premiere offering for mobile EHR technology. ABC and iMDsoft offer anesthesia and pain management professionals the opportunity to maximize their EHR Incentive Payments while achieving complete and easy electronic anesthesia documentation at a new level of mobility. Completely independent of hospital IT infrastructure, this cloud-based service has no hardware or software requirements for hospitals or surgery centers other than the use of an iPad, and no technical knowledge is required for installation or use.Stanford R. Plavin, MD, President of Ambulatory Anesthesia of Atlanta (AAA), elaborates, “Ambulatory Anesthesia of Atlanta, LLC is a unique practice. We have a number of diverse outpatient clinical settings, while also supporting an established office-based anesthesia division called Mobile Anesthesiologists of Georgia. We work with practices and locations which have a variety of IT settings and infrastructures....

The New York Times has continued its assault on colonoscopies in its June 1st article entitled “The $2.7 Trillion Medical Bill:  Colonoscopies Explain why U.S. Leads the Work in Health Expenditures.” The Times’ charge that health care costs more in the U.S. is directed against medical services in general, with colonoscopy singled out as a “compelling case study.”  The article claims that they are the most expensive screening test that healthy Americans routinely undergo, with more than 10 million patients purportedly undergoing the procedures every year (a number ten times greater than a decade ago).  Moreover, as is true of many other health care services, screening colonoscopies vary considerably across the country in both the frequency with which they are performed and in pricing.  The Times included data from the Healthcare Blue Book showing that the cost of colonoscopy varied, in metropolitan areas across the U.S., from a low of...

The Sustainable Growth Rate (SGR) formula that constrains the annual update to the Medicare payment rate is projected to reduce physician payments by 24.4% in 2014, unless Congress intervenes. Congress—that is, the “committees of jurisdiction”—is considering sweeping changes to the payment system, including repeal of the SGR.  The legislators agree that the SGR is a flawed and unsustainable mechanism.  All three committees will have conducted hearings within the four-week period that began on May 7th, when the Health Subcommittee of the House Ways and Means Committee held its most recent hearing to discuss how the federal government, along with physicians, could develop new payment policy.  During a hearing before the Senate Finance Committee on May 14th, the first such hearing in six years, Chairman Max Baucus (D-MT) said that it is time “to repeal the SGR once and for all this year.” The House Energy and Commerce Committee’s Subcommittee on...

  It is a privilege to bring you another article from Michael R. Hicks, MD, MBA, this time on Successfully Competing in Anesthesia Services Today. Throughout his career as an anesthesiologist and executive, Dr. Hicks has developed unique insights into the qualities that make for success. As a physician, he writes for his peers honestly and without trepidation. Dr. Hicks’s wisdom is among the most valuable information we have published in the Communiqué. In the current issue, he addresses anew the concept of disruptive innovation in anesthesia practice—but as he notes, “successful companies within the anesthesia space are still focused on implementing and executing sustaining innovations” such as quality and process improvement and “better management practices built upon fiscal and behavioral discipline.” The needed innovations will come from five different strategies identified by Dr. Hicks: Actively manage the performance of the practice and its members, recognizing that neither the group nor...

In order to be their hospitals’ valued partners, anesthesiologists should understand the needs and forces driving the institutions’ leadership.  Some of the strongest of those forces today are creating a wave of merger and acquisition (M&A) activity. In 2012 there were more than 100 deals in the U.S., twice as many as three years earlier.  If the relationship dynamics do not encourage partnership between the group and the C-suite, it is nevertheless important to be able to gauge whether one’s hospital is going in the right direction (or staying in the right place).  A recent report from the  management consulting firm Strategy&, Succeeding in Hospital and Health Systems M&A: Why So Many Deals Have Failed, and How to Succeed in the Future, is instructive. In the first of a pair of studies, the authors found that the majority of hospital and health system mergers in the period 1998-2008 had failed to...

“The Competition” These days I hear that term from more and more anesthesia group leaders, and I’m sure that you’re thinking about it more than you’d like. From the Latin root competitionem, its meaning originated in the sense of rivalry, of a contest for something. Since at least the 1790s, it’s been used to describe rivalry in the marketplace. Ask yourself what “the competition” means to you. What comes to mind? In working with anesthesia group leaders across the country, my regular experience is that they envision the competition as another anesthesia group, whether from across the county or across the country. These days, the image that often first comes to mind is that of the predatory staffing-service model. I certainly can’t fault these group leaders because, especially these days, there is tremendous competitive pressure from outside entities coveting your facility contracts. So, for most group leaders protecting their practice from...

With remarkable timing, news of a lawsuit brought by the parents of a teenager left in a permanent vegetative state after a routine endoscopy coincides with the announcement that the Food and Drug Administration (FDA) has granted Premarket Approval for the SEDASYS® system, a computer-assisted personalized sedation system. The patient was not anesthetized using a SEDASYS machine or any other form of robo-anesthesia, of course.  According to the May 1st New York Daily News article, “The suit to be filed in Westchester Supreme Court alleges that doctors improperly administered anesthesia in failing to consider the patient’s height and weight; improperly monitored her vital signs; excessively inflated her abdomen, causing cardiac arrest, and removed a breathing tube prematurely.”  The point of the juxtaposition of the two news items is to highlight the inherent risks of routine anesthesia even when administered and monitored by experienced anesthesiologists. The SEDASYS manufacturer, Ethicon Endo-Surgery, Inc., a...

Anesthesia practices that accept Visa and MasterCard payments are among the “merchants” that may be able to collect a portion of the fees paid to the card issuers under the proposed settlement in the Payment Card Interchange Fee and Merchant Discount Antitrust Litigation pending in federal District Court in New York.  The class action lawsuit alleges that merchants paid excessive fees for accepting Visa and MasterCard because of an alleged antitrust conspiracy among the Defendant.  According to the complaint, Visa, MasterCard and more than a dozen of the nation's largest credit card issuers conspired to restrain competition by illegally charging higher interchange fees for credit card transactions.  The court granted preliminary approval to the proposed settlement agreement in November, 2012.  On April 11, 2013, the plaintiffs filed for final court approval of the settlement and for attorneys’ fees and expenses.  The court has scheduled a hearing for September 12, 2013 to...

Astonishingly, after decades of discussion, there is still a lot of uncertainty as to what the anesthesia medical direction rules mean by the requirement that the medically-directing anesthesiologist be “immediately available.”There has never been a numerical time or distance limit for “immediately available,” although there was a substantial debate about potential parameters with the American Society of Anesthesiologists in the 1990s. Thus, in investigating a False Claims Act whistleblower case that began in 2008, auditors from the Department of Health and Human Services Office of the Inspector General (OIG), acting with the Department of Justice, performed an on-site visit to the surgical facilities at the University of California-Irvine to see for themselves how long it would take a supervising anesthesiologist to travel between ORs, including ORs located in different buildings. An auditor from the San Diego OIG field office described the visit to UCI in a May 8, 2013 OIG podcast:Well, when...

  On January 25, 2013, the US Department of Health and Human Services (HHS) Office of Civil Rights (OCR) issued its long-awaited Health Insurance Portability and Accountability Act of 1996 (HIPAA) final omnibus regulations (Final Rule). The Final Rule modified the HIPAA Privacy, Security, Enforcement and Breach Notification Rules (HIPAA Rules) and is comprised of four sub-rules: Final modifications to the HIPAA Privacy, Security, and Enforcement Rules mandated by the Health Information Technology for Economic and Clinical Health (HITECH) Act; A final rule adopting changes to the HIPAA Enforcement Rule to incorporate the increased and tiered civil money penalty structure as set forth by HITECH; A final Breach Notification rule; and A final rule modifying the Privacy Rule as required by the Genetic Information Nondiscrimination Act (GINA). While the Final Rule is effective March 26, 2013, compliance with the provisions of the Final Rule is not required until September 23, 2013....

What do orthopedic surgery, cardiology, radiology, gastroenterology and urology have in common?  Compensation in all five specialties is higher, on average, than it is for anesthesiology, according to Medscape’s Physician Compensation Report: 2013. Anesthesiology has slipped from fourth place to sixth place among the most highly-compensated specialties since last year’s report.  Average compensation among full-time anesthesiologists as reported by Medscape is $317,000—a number that strikes us as rather low.  The explanation may lie partly in the fact that more respondents reported incomes of less than $200,000 per year than reported earnings in excess of $500,000.  The data apparently include compensation levels at implausibly low levels ($100,000 or less reported by 6% of the respondents).  The mode is $300,000 to $399,999, with 18% reporting compensation of $300,000 to $349,999 and 15% reporting $350,000 to $399,999. Medscape’s Anesthesiologist Compensation Report: 2013. Medscape defines compensation in the standard manner:  “For employed physicians, compensation includes...

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...

Physicians who refer or order services for Medicare patients must be enrolled in PECOS, the Medicare Provider Enrollment, Chain, and Ownership System database, and physicians who bill Medicare are required to list the name and National Provider Identifier (NPI) of the ordering/referring physician on their claims in order to be paid.  The source of these requirements is Section 6405 of the Affordable Care Act. CMS is about to implement an automatic edit so that claims submitted on or after May 1st for certain services ordered by a physician or healthcare provider who is not enrolled in PECOS, even if his or her name and National Provider Identifier (NPI) are on the claim, will be denied.  This change may affect a relatively small but important set of anesthesiologists, who have raised questions about the issue.  As part of the pre-operative evaluation of surgical patients, anesthesiologists may order clinical laboratory or even imaging...

Benjamin Franklin said, “An ounce of prevention is worth a pound of cure.” It is certain that Mr. Franklin was not speaking about the value of preemptive compliance work, yet the old adage aptly applies to the work done by physician groups to prevent allegations of fraud or abuse. The Office of Inspector General for the Department of Health and Human Services (“OIG”) recently reported that the government expected to set a record of $6.9 billion in recoveries from its investigations and enforcement actions for its fiscal year 2012.1 As the chart in Figure 1 shows2, this $6.9 billion is part of a trend of continuously increasing recoveries. For this reason, many physician groups have implemented compliance programs designed to minimize the chances that the group will commit what the government perceives to be fraud or abuse. One key to effective compliance is an understanding of those issues of particular importance...

The Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services Office of the Inspector General (OIG) last week published parallel proposed rules that would remove certain obstacles to hospitals’ paying for the electronic health record (EHR) technologies used by anesthesiologists, pain specialists and other physicians. When a hospital or other entity that may be seeking patient referrals, such as a medical device manufacturer, gives something of value to a physician, the gift potentially may violate both the anti-kickback statute and the physician self-referral statute. The anti-kickback statute (Section 1128B(b) of the Social Security Act) provides criminal penalties for individuals or parties that knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce or reward the referral of business reimbursable under Medicare or any other federal health care program.   In 1987 Congress passed legislation requiring the development and promulgation of regulations, the so-called...

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...

One of the Medicare Administrative Contractors (MACs), Noridian Administrative Services LLC, has published a proposed policy that would bar payment for peripheral nerve blocks placed pre-operatively for the management of post-operative pain.  According to the draft policy, entitled Nerve Blockade: Somatic, Selective Nerve Root, and Epidural,Reimbursement for the control or management of pain in the immediate postoperative period is bundled into the payment for the procedure, surgical or anesthetic—regardless of the method by which the care provider, including the anesthesiologist, decides to manage pain. Following discharge from the post-anesthesia care unit (PACU), the medically reasonable and necessary placement of regional or peripheral pain blocks or initiation of other new pain interventions or “top-up” dosing may be reimbursable. Providers should not expect separate payment for the establishment of epidural or other pain blocks unless the block is placed following discharge from PACU due to documented inadequate pain control.The last sentence of the...

ABC is receiving some very good questions from anesthesia and pain practices regarding more details on how the sequestration 2% Medicare payment cut will impact their reimbursement.  We are continuing to monitor various Medicare carriers’ websites, including Palmetto, CGS, Novitas, First Coast Service Options and NHIC. These Q&As can help you track and ensure proper payments.Question:Does the 2% payment reduction under sequestration apply to the payment rates reflected in Medicare fee-for-service fee schedules or does it only apply to the final payment amounts?Answer:Payment adjustments required under sequestration are applied to all claims after determining the Medicare payment including application of the current fee schedule, coinsurance, any applicable deductible, and any applicable Medicare Secondary Payment adjustments. All fee schedules, Pricers, etc., are unchanged by sequestration; it’s only the final payment amount that is reduced. Question:How is the 2% payment reduction under sequestration identified on the electronic remittance advice (ERA) and the standard paper...