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...
With headlines of economic downturn, health care reform, and decreased reimbursements, many physicians are asking the questions, “Is My Money Safe?” “Should I Change Banks?”The first step to take in answering these questions would be to determine your bank’s rating. To help educate the average depositor, we researched the methodology behind bank ratings. Bauer Financial is a nationally recognized independent bank rating firm. The information that Bauer uses to rate banks is obtained from an approximately 30 page report that each bank is required to file quarterly with government regulators. No bank with assets greater than $1.5 million can be excluded from this rating process nor does a bank pay to be rated or for the rating that it receives.There are a number of factors considered in the rating process including:Capital ratio;Number and value of delinquent loans;Number and value of charge offs;Repossessed assets;Profit/(loss) trends;Value of investment portfolio;Regulatory supervisory agreements;Community reinvestment rating;Historical...
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...
Last week saw the launch of the latest version of the iPad – and the beginning of the end, perhaps, of the IPAB.The Independent Payment Advisory Board (IPAB) was created by the Patient Protection and Affordable Care Act (ACA) in 2010. IPAB is responsible for recommending specific proposals to contain the growth rate of Medicare spending if spending per capita is projected to exceed targets also established by the ACA. From 2015 through 2019, that target is based on measures of inflation. Starting in 2020, the target is based on the growth of the gross domestic product plus one percentage point.Binding Recommendations and Other ReportsAt the start of every year, IPAB must submit recommendations to Congress to reduce spending if the targets are going to be exceeded. If IPAB fails to meet this deadline, the Secretary of Health and Human Services (HHS) must develop a proposal. Congress must consider the IPAB...
The average pre-deal predictors of anesthesia group merger or acquisition success are, well, average. Economies of scale, increased opportunities, greater profits! If life, even business life, were just so simple.Having worked with countless groups, both within and without the specialty of anesthesia practice, on mergers, acquisitions and other affiliations, it’s obvious that there are other key predictive indicators as well.This article focuses on one of the most important soft, that is, non-dollar, indicators: the impact group culture has on the likelihood of success of the combined venture. Any merger, acquisition or affiliation that does not take into account the variance between the cultures of the constituent groups is doomed, at a minimum, to trouble, and much more likely, to failure.It’s possible to discuss anesthesia group culture from several perspectives. For example, we might view group culture organizationally, socially, or psychologically.But if you allow me to assume that you’re like my clients,... 
When physicians, hospitals, home health agencies and other providers decide to create an Accountable Care Organization or other integrated delivery system, one major issue that will soon command attention is the distribution of patient care revenues. How will the various providers share the pie?One model comes from the PROMETHEUS® Payment allocation system.i PROMETHEUS, a methodology developed beginning in 2004 by a team led by Alice G. Gosfield, Esq. and François de Brantes, M.S., M.B.A. pays providers a single, risk-adjusted payment across inpatient and outpatient settings to care for a patient diagnosed with a specific condition. The payment is based on “evidence-informed case rates” (ECRs) and is theoretically equal to the resources required to provide care as recommended in well-accepted clinical guidelines. Thus the total payment for a typical episode of care, or the ECR, is equal to:Types of services typically involved in treating the condition* Frequency * Price per serviceA portion of... 
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...
Join Jody Locke, our Vice President of Anesthesia and Pain Practice Management, at his speaking engagement this month.Jody will be speaking on "Hospital Contracting: New Rules for a New Era" on March 17th at Washington State Society of Anesthesiologists Spring Scientific Meeting. The meeting will be held at the Bell Harbor International Conference Center in Seattle, Washington. The talk will be focused on the changing rules of negotiating a contract with your hospital. It is no longer a simple matter of calculating the amount of money needed in order to remain viable, but rather you must consider the fact that today’s hospital contract negotiations focus much more on a broader spectrum of business issues. It is not enough to simply provide a service. Hospitals today are looking for partners who bring added value to their institution.If you would like more details on how you can attend - please get in touch with us at info@anesthesiallc.com.
The Centers for Medicare and Medicaid Services (CMS) has just issued a proposed rule that will make it more difficult than ever for anesthesiologists and pain physicians to qualify for the Medicare or Medicaid electronic health records (EHR) incentive. There will be a 60-day comment period, after which CMS will review the feedback and publish a final rule this summer.BackgroundUnder the Health Information Technology for Economic and Clinical Health (HITECH) Act, enacted as part of the American Recovery and Reinvestment Act of 2009, eligible health care professionals and hospitals can qualify for Medicare and Medicaid incentive payments when they adopt certified EHR technology and use it in a meaningful way. What is considered “meaningful use” is evolving in three stages:Stage 1 (which began in 2011 and remains the starting point for all providers): “meaningful use” consists of transferring data to EHRs and being able to share information, including electronic copies and visit summaries for...
??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...
Every private anesthesia group in the United States knows that practice management companies (PMCs) in the business of acquiring and operating anesthesia practices are growing rapidly. This is part of a general acceleration in health care merger and acquisition activity driven by healthcare reform and by the economic uncertainty of the last few years. Physician practices have become one of the fastest-growing targets; larger entities such as health systems, insurance companies and PMCs are buying up hospital-based specialties with a view toward participating in accountable care organizations (ACOs) and receiving bonuses for improving quality and decreasing costs.Hospitalists, whose specialty barely existed twenty years ago, now number more than 30,000. Hospitalists attract the interest of venture capital and expanding corporations because of their role in managing acute inpatient care. Emergency medicine has a long history of PMC partnerships.Anesthesiologists, as specialists in the management of perioperative care, are likewise attractive candidates for acquisition. ...
From day to day, the great majority of anesthesiologists, nurse anesthetists, anesthesiologist assistants and their group practices provide excellent patient care. Most enjoy comfortable relationships with their hospitals and surgery centers, too. The world of health care is changing all around us, though. Every anesthesia practice needs to understand the more important changes and to adapt, or plan to adapt. In this issue of the Communiqué, you will find a number of articles that will help you prepare for the short-term and long-term future. We start with Mark Weiss, Esq.’s Protecting Your Exclusive Contract, Your Practice and Your Profits. Mr. Weiss aptly shows that the process of negotiating your next hospital contract starts the moment you have signed this one. The anecdote about Walt Disney’s arrival at Universal Pictures’ headquarters in New York to renegotiate the terms of their deal, only to find that Universal, not he, held the copyright in his cartoon character 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...