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Medical Economics D ECE M B E R 25, 2014 CH RON IC CAR E MANAG E M E NT DECEMEBER 25, 2014 VOL. 91 NO. 24 Maximize patient collections with online billing 25 How facility fees impact physicians 32 The keys to building a strategic plan 38 Transitional care management 101 49 ICD-10 costs: Are they overblown? ■ 23 TH E FACI LITY FE E DI LE M MA ■ A DE BATE OVE R ICD-10 COSTS magenta cyan yellow black Getting paid for NEW FOR 2015 CHRONIC CARE How you can meet Medicare’s complex requirements PAGE 17 ES540491_ME122514_cv1.pgs 12.04.2014 16:48 ADV Advertisement not available for this issue Advertisement notdigital available for this issue of the edition of the digital edition www.medicaleconomics.com/resourcecenterindex MedicalEconomics.com Facebook Twitter www.MedicalEconomics.com/HIMSS2012 www.MedicalEconomics.com/ACA MedicalEconomics.com Facebook Twitter See medicaleconomics.modernmedicine.com/himss2012 resource centers related to our Business of Health series You’ve gotYquestions about the Affordable ou've got technology questions. Care Act. as well as topics such as Patient-Centered Medical Homes, accountable We’ve got answers. answers. We've got care organizations, and our EHR Best Practices Study at the above link. Advertisement not available for this issue Advertisement notdigital available for this issue of the edition of the digital edition www.medicaleconomics.com/resourcecenterindex MedicalEconomics.com Facebook Twitter www.MedicalEconomics.com/HIMSS2012 www.MedicalEconomics.com/ACA MedicalEconomics.com Facebook Twitter See medicaleconomics.modernmedicine.com/himss2012 resource centers related to our Business of Health series You’ve gotYquestions about the Affordable ou've got technology questions. Care Act. as well as topics such as Patient-Centered Medical Homes, accountable We’ve got answers. answers. 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Medical econoMics ❚ December 25, 2014 magenta cyan yellow black MedicalEconomics. com ES538525_ME122514_006.pgs 12.02.2014 21:43 ADV Referenced in MedLine® DECEMBER 25, 2014 COLUMNS PA G E 23 FINANCIAL S T R AT E G I E S Robert C. Scroggins Improving collections IN DEPTH CHRONIC CARE STARTS ON PAGE 23 IMPROVE PATIENT COLLECTIONS WITH ONLINE BILLING How to capture more revenue internally before using a collection agency. 17 PA G E 25 PHYSICIANS AND THE FACILITY FEE DILEMMA 38 How rising and unexpected healthcare costs are forcing physicians to talk about money with patients. CODING I N S I G HT S Renee Dowling 30 THE IMPORTANCE OF PATIENT ENGAGEMENT Using transitional care management codes 8 10 11 14 48 49 ME ONLINE EDITORIAL BOARD FROM THE TRENCHES VITALS ADVERTISER INDEX THE LAST WORD A new study takes aim at previous high estimates for how much ICD-10 will cost practices. Cover: Getty Images/iStock/360/mon5ter M I S S I O N S TATE M E NT Medical Economics is the leading business resource for ofce-based physicians, providing the expert advice and shared experiences doctors need to successfully meet today’s challenges in practice management, patient relations, malpractice, electronic health records, career, and personal fnance. Medical Economics provides the nonclinical education doctors didn’t get in medical school. Why true engagement will improve outcomes and beneft physicians and patients. C O V E R STO R Y | M O N EY magenta cyan yellow black 32 BETTER BUSINESS PLANNING THROUGH STRATEGY How to chart a course for the future of your practice. How you can meet Medicare’s complex requirements 37 THE IMPORTANCE OF AN EMPLOYEE MANUAL starts on page 17 38 USING TRANSITIONAL CARE MANAGEMENT CODES Understanding the requirements ❚ How to bill for chronic care ❚ Convincing your patients to sign up ❚ A guide for employees can reduce costs and minimize liability. Why billing for transitional care is worth the efort. 40 THE FUTURE OF MEDICAL MALPRACTICE REFORM Traditional reform options are not cutting it, so what’s next? 49 ARE ICD-10 COSTS OVERBLOWN? MEDICAL ECONOMICS (USPS 337-480) (Print ISSN: 0025-7206, Digital ISSN: 2150-7155) is published semimonthly (24 times a year) by Advanstar Communications Inc., 131 W. First St., Duluth, MN 55802-2065. Subscription rates: one year $95, two years $180 in the United States & Possessions, $150 for one year in Canada and Mexico, all other countries $150 for one year. Singles copies (prepaid only): $18 in US, $22 in Canada & Mexico, and $24 in all other countries. Include $6.50 for U.S. shipping and handling. Periodicals postage paid at Duluth, MN 55806 and at additional mailing ofces. Postmaster: Send address changes to Medical Economics, PO Box 6085, Duluth, MN 55806-6085. Canadian GST Number: R-124213133RT001 Publications Mail Agreement number 40612608. Return undeliverable Canadian addresses to: IMEX Global Solutions, PO Box 25542 London, ON N6C 6B2 CANADA. Printed in the USA. MedicalEconomics. com Volume 91 Issue 24 A new study takes aim at previous high estimates for how much the transition will cost practices. MEDICAL ECONOMICS ❚ DECEMBER 25, 2014 ES539000_ME122514_007.pgs 12.03.2014 02:16 7 ADV online MedicaleconoMics.coM Smarter BuSineSS. Better Patient Care. exCluSive online Content and newS. o n li n e exc lu s ive Study: PhySicianS find little value in MOc Most doctors think that maintenance of certifcation (MOC) requirements are cumbersome and not relevant to their day-to-day needs, according to a recent study in JAMA Internal Medicine. The report fnds that changes in the programs’s requirements result in anxiety and confusion among physicians. It recommends that more be done to show physicians the tangible benefts of participating in MOC. See additional details at http://bit.ly/1sYCkrP Twitter Talk Follow us on Twitter to receive the latest news and participate in the discussion. Practice Productivity Get your money’s worth out of technology in your practice! Learn 5 key factors in our eBook. http://bit.ly/1y9iS0M telehealth Telehealth reimbursement is a barrier to adoption http://ow.ly/ENEyI Prior authorizations Top Headlines Now @MEonline costs discourage Patients from seeking care Me app. download free today. Get access to all the benefts Medical Economics ofers at your fngertips. The Medical Economics app for iPad and iPhone is now available for free in the iTunes store. MedicalEconomics.com/app Meaningful Use 2 resource center Find tools and strategies for complying with with phase 2 of the Meaningful Use program at http://bit.ly/1y5vAuc As incomes stagnate, copays and deductibles are becoming a larger burden for many families. Read the full story at http://bit.ly/1uyrOfr #2 telemedicine to see slow growth: study Doctors cite inadequate reimbursement as barrier. See more at http://bit.ly/1CyUGJO #3 quality of care toP concern to Patients A new study looks at patients’ online ratings of phyisicians. Find additional details at http://bit.ly/1vcwh7I Pa r t o f th e Medical econoMics ❚ December 25, 2014 magenta cyan yellow black skin cancer Not only is #skincancer a growing issue in the US, but costs for treating it are rising relative to other #cancers http://ow.ly/ER4oy billing and coding Practices Learn to code with confidence and boost practice revenue in our 11/25 issue http://ow.ly/i/7H82T http://ow.ly/ENwhr heart failure treatment “The findings of this study will ultimately change the way we treat patients with #heartfailure” http://ow.ly/EBai7 join us online facebook.com/MedicalEconomics Medical Economics is part of the ModernMedicine Network, a Web-based portal for health professionals ofering best-in-class content and tools in a rewarding and easy-to-use environment for knowledge-sharing among members of our community. 8 Prior auths and narrow networks...why physicians must fight for clinical control http://ow.ly/ENxoO twitter.com/MedEconomics MedicalEconomics. com ES539210_ME122514_008.pgs 12.03.2014 04:51 ADV INSTANT PHARMACY SAVINGS AVAILABLE FOR * CO-PAY $15 MOST ELIGIBLE INSURED PATIENTS PAY $15* FOR THEIR COLCRYS PRESCRIPTION HASSLE-FREE INSTANT SAVINGS AT THE RETAIL PHARMACY—NO CARD OR REGISTRATION PROCESS REQUIRED *This offer covers out-of-pocket expenses greater than $15, up to a maximum benefit of $75 per prescription. Must meet eligibility requirements and be commercially insured. This offer cannot be used if patient is a beneficiary of, or any part of his or her prescription is covered by: (1) any federal or state healthcare program (Medicare, Medicaid, TRICARE, etc.), including a state pharmaceutical assistance program, (2) the Medicare Prescription Drug Program (Part D), or if a patient is currently in the coverage gap, or (3) insurance that is paying the entire cost of the prescription. This offer may be rescinded, revoked, or amended without notice. FOR MORE INFORMATION, VISIT COLCRYS.COM COLCRYS is a trademark of Takeda Pharmaceuticals U.S.A., Inc., registered with the U.S. Patent and Trademark Offce and used under license by Takeda Pharmaceuticals America, Inc. ©2014 Takeda Pharmaceuticals U.S.A., Inc. USD/COL/14/0055 Printed in U.S.A. 11/14 magenta cyan yellow black ES539589_ME122514_009_FP.pgs 12.03.2014 23:07 ADV the Advisers The board members and consultants contribute expertise and analysis that help shape the content of Medical Economics. PAGE 38 Medicare reimbursement makes it worth it to bill transitional care management codes” —Renee Dowling CODING CONSULTANT EDITORIAL CONSULTANTS PRACTICE MANAGEMENT Judy Bee www.ppgconsulting.com La Jolla, CA Keith Borglum, CHBC Professional Management and Marketing Santa Rosa, CA Kenneth Bowden, CHBC Berkshire Professional Management Pittsfeld, MA Michael D. Brown, CHBC EDITORIAL BOARD Health Care Economics Indianapolis, IN Frank Cohen, MPA www.frankcohengroup.com Clearwater, FL Virginia Martin, CMA, CPC, CHCO, CHBC Mary Ann Bauman, MD Elizabeth A. Pector, MD Healthcare Consulting Associates of N.W. Ohio Inc. Waterville, OH Internal Medicine Oklahoma City, OK Family Medicine Naperville, IL Rosemarie Nelson MGMA Healthcare Consultant Syracuse, NY Mark D. Scroggins, CPA, CHBC Clayton L. Scroggins Associates Inc. Cincinnati, OH Gray Tuttle Jr., CHBC John L. Bender, MD, MBA Patricia J. Roy, DO The Rehmann Group Lansing, MI Family Medicine Ft. Collins, CO Family Medicine Muskegon, MI Healthcare Management and Consulting Services Bay Shore, NY Michael J. Wiley, CHBC H. Christopher Zaenger, CHBC Z Management Group Barrington, IL Karen Zupko Karen Zupko & Associates Chicago, IL Maria Y. Chandler, MD, MBA Joseph E. Scherger, MD Business of Medicine, Pediatrics Irvine, CA Family Medicine La Quinta, CA TAXES & PERSONAL FINANCE Lewis J. Altfest, CFP, CPA Altfest Personal Wealth Management New York City Robert G. Baldassari, CPA Matthews, Carter and Boyce Fairfax, VA Todd D. Bramson, CFP George G. Ellis Jr., MD Salvatore S. Volpe, MD North Star Resource Group Madison, WI Internal Medicine Youngstown, OH Internal Medicine-Pediatrics Staten Island, NY Insurance consultant New York City Glenn S. Daily, CFP Barry Oliver, CPA, PFS Thomas, Wirig, Doll & Co. Capital Performance Advisors Walnut Creek, CA Gary H. Schatsky, JD David C. Judge, MD Craig M. Wax, DO IFC Personal Money Managers New York City Internal Medicine Cambridge, MA Family Medicine Mullica Hill, NJ Schiller Law Associates Norristown, PA David J. Schiller, JD Edward A. Slott, CPA E. Slott & Co. Rockville Centre, NY HEALTH LAW & MALPRACTICE Barry B. Cepelewicz, MD, JD Jeffrey M. Kagan, MD Garfunkel Wild, PC Stamford, CT Internal Medicine Newington, CT Wheeler Trigg Kennedy, LLP Denver, CO John M. Fitzpatrick, JD Alice G. Gosfield, JD Alice G. Gosfeld and Associates Philadelphia, PA James Lewis Griffith Sr., JD Fox Rothschild Philadelphia, PA Lee J. Johnson, JD ask us 10 Mount Kisco, NY Lawrence W. Vernaglia, JD, MPH Have a question for our advisers? Email your question to [email protected]. MEDICAL ECONOMICS ❚ DECEMBER 25, 2014 magenta cyan yellow black Foley & Lardner, LLP Boston, MA MedicalEconomics. com ES538526_ME122514_010.pgs 12.02.2014 21:43 ADV from the Trenches Because primary care has devolved into a coordinative activity, many physicians no longer treat the severity of diseases that they had in the past. Many no longer treat hospital or nursing home patients. Many refer out patients to specialists that they may have treated in the past. And burnout is high among primary care doctors.” Edward Volpintesta, MD, Bethel, ConneCtiCut Primary care Practice now brings little joy Re your article, “Primary care physicians seeing fewer patients” (Special Report, November 10, 2014): You were correct to point out that the numerous non-medical tasks that have insinuated themselves into the practice of medicine have made primary care doctors much less efective and at the same time have robbed many of them of the joy and satisfaction of practice. Tis in not just a common complaint but a serious and growing problem that is changing the identity of primary care and how and who practices it. Because primary care has devolved into a coordinative activity, many physicians no longer treat the severity of diseases that they had in the past. Many no longer treat hospital patients or nursing home patients. Many refer out patients to specialists that they may have treated in the past. And burnout is high among many primary care doctors. Add to this that a primary care physician has existed for years and will exist into the future because it takes about 11 years to train a primary care doctor and it is clear that the primary care workforce of the future will look very little like it does today. Te training programs for primary care will be shortened by at least three or more years and made more practical. Advanced practice nurses will be playing an impor- MedicalEconomics. com magenta cyan yellow black tant role in providing primary care services. Already they have the right to practice independently in over 20 states. Perhaps the severest and saddest comment that can be made about primary care in its current form is that I have yet to hear a colleague say that he has recommended that his son or daughter enter it as a profession. Edward Volpintesta, MD Bethel, ConneCtiCut moc requirements don’t benefit medicine Tank you for publishing Rachael Zimlich’s article in Medical Economics (“MOC needs revision before physicians will recognize value,” eConsult, November 17.) As you know, many practicing physicians are becoming angered over MOC and fnd it not benefcial to their individual practices and quite burdensome. Properly done scientifc studies have never proven MOC to improve the quality of care. Shouldn’t MOC have been scientifcally tested prior to its mandate? I am quite worried that MOC is damaging camaraderie in the House of Medicine especially in my feld of OB/GYN. In Los Angeles we are seeing dramatic dropofs in attendance to our grand rounds, local meetings and academic symposia. Te hours that the non- grandfathered physi- Medical econoMics ❚ December 25, 2014 ES538702_ME122514_011.pgs 12.02.2014 23:20 11 ADV from the Trenches Clearly, MOC has devolved into a costly burden to physicians, patients, and healthcare. The boards and their MOC program have become a profteering juggernaut without any reasonable proof of beneft, effcacy, or patient protection, and compliance is slowly being tied to the privilege of practicing medicine.” Howard C. Mandel, MD, FACOG, loS AnGeleS, CAliFoRniA TELL US [email protected] Or mail to: Letters Editor, Medical Economics, 24950 Country Club Boulevard, Suite 200, North Olmsted, Ohio 44070. Include your address and daytime phone number. Letters may be edited for length and style. Unless you specify otherwise, we’ll assume your letter is for publication. Submission of a letter or e-mail constitutes permission for Medical Economics, its licensees, and its assignees to use it in the journal’s various print and electronic publications and in collections, revisions, and any other form of media. 12 cians have to spend to meet MOC requirements, meet all their needs for CME and given the hours that we all work, limits the extra hours available for us to partake in what were once very well attended, high-quality educational meetings and forums. Analysis of attendance data from American Congress of Obstetricians and Gynecologists national and regional meetings show dramatic dropofs. My hypothesis is that the drop in actual numbers, as well as percentage of Fellows attending, is mostly due to MOC. Membership in our organizations has also markedly decreased. In your issue of February 10, 2012, I wrote, “Clearly, MOC has evolved into a costly burden to physicians, patients, and healthcare. Te boards and their MOC program have become a profteering juggernaut without any reasonable proof of beneft, efficacy, or patient protection, and compliance is slowly being tied to the privilege of practicing medicine. As physicians, we should demand evidence-based analysis of strategies proposed to improve our ability to practice, just as we do our research. We should not give in to potential threats of government mandates.” Just like the response to the death of Libby Zion, well-meaning people often institute change that actually is more harmful than benefcial. MOC is one of the ideas that need to be put on hold and further evaluated academi- Medical econoMics ❚ December 25, 2014 magenta cyan yellow black SIGN UP To subscribe to eConsult go to medicaleconomics.modernmedicine.com/ medical-economics/enewssignup cally. How many of our departments at our leading teaching hospitals are having a hard time dealing with work hour limits of their resident staf ? How many people have been injured by handofs that would not have occurred if not for work hour limits? How do we justify damaging physician collegiality, damaging camaraderie, wasting limited valuable hours, the creation of an excessive “teach for the test” mentality without evidence that MOC improves the quality of health care? Everyone agrees that physicians must continue their education. We are never done learning. Te debate is about whether physicians should determine how and what they learn, or some outside, self-appointed as well as self-serving, board? No other profession mandates MOC. Not lawyers, not accountants, not dentists, not architects, not engineers, not airline pilots and not nurses or nurse practitioners. Our courts, teeth, buildings and bridges are not falling apart. Half of the counties in America do not have one obstetrician to deliver a baby. Perhaps those OBs who are being paid almost $600,000 annually— not including other benefts and compensation—to create and administer MOC should leave their ivory tower and actually practice medicine. Howard C. Mandel, MD, FACOG loS AnGeleS, CAliFoRniA MedicalEconomics. com ES538701_ME122514_012.pgs 12.02.2014 23:20 ADV Renew online to ensure continued delivery Don’t miss out. Renew today! Don’t miss in Medical Economics: ✔ Coding tips for better reimbursements ✔ Malpractice advice from the experts ✔ Practice management Q&As ✔ Strategies for optimal patient flow ✔ Operational efficiency practice makeovers To ensure continued delivery of your issues, renew your subscription online at www.MedicalEconomics.com/subscribe and enter priority code 11HAW at the prompt. A minute of your time is all it takes. Medical Economics is the leading practice management source for office-based physicians, offering credible, relevant and timely reporting on the latest trends. We provide the business education you didn’t receive in medical school or residency. magenta cyan yellow black ES539615_ME122514_B13_FP.pgs 12.03.2014 23:09 ADV theVitals Physician indePendence threatened by rising cost, survey says An increase in operational costs and a decrease in reimbursements are causing independent physicians to sell their practices, according to a survey. Though 73% of physicians say they prefer to keep their practices independent, 44% say they will likely sell their practices in the next 10 years, according to the 2015 Independent Physician Outlook Survey by ProCare Systems, a medical management consultant company. About 55% of surveyed physicians owned a practice with one to fve doctors. Nearly half of those surveyed say that decreases in reimbursement and an increase in operational costs are the most difcult aspects of owning an independent practice. “Given the staggering majority of physicians that desire continued independence, the fndings in this survey indicate that we cannot continue with ‘business as usual’ in our standard practice models,” says Fred Davis, MD, cofounder and president of ProCare Systems. 14 AMA: HAlt MeAningful use 2 penAlties in 2015 The majority of physicians could face penalties next year for not meeting meaningful use 2 (MU2) requirements for electronic health records (EHRs), and the American Medical Association (AMA) says those penalties should be removed. Eligible providers (EPs) have until February 2015 to attest to MU2, or face a 1% reduction in Medicare reimbursements. Only 11,478 EPs have attested to MU2 as of November, which accounts for about 2% of healthcare providers. AMA President-elect Steven J. Stack, MD, says that without interoperability between EHRs, it will be impossible for providers to successfully attest to MU2. “Te AMA has been calling for policymakers to refocus the meaningful use program on interoperability for quite some time,” Stack said in a press release. “Te whole point of the meaningful use incentive program was to allow for the secure exchange of information across settings and providers and right now that type of sharing and coordination is not happening on a wide scale for reasons outside physicians’ control. Physicians want to improve the quality of care and usable, interoperable electronic health records are a pathway to achieving that goal.” Meaningful use 2 attestion By the numbers 44,000 Number of meaningful use headship applications from providers since July 1% Penalty reduction in Medicare reimbursement for providers who don’t attest to MU2 in 2015. 17% Percentage of hospitals that have attested to MU2. 11,478 Number of eligible providers who have attested to meaningful use 2 (MU2) as of November, or 2% of providers. Source: Centers for Medicare and Medicaid Services Medical econoMics ❚ December 25, 2014 magenta cyan yellow black Examining the News Affecting the Business of Medicine Te Vitals is continued on page 16 MedicalEconomics. com ES538951_ME122514_014.pgs 12.03.2014 01:51 ADV Call for SubmiSSionS 2015 AnnuAl PhysiciAn Writing contest t hi S y e a r ’S t op ic: “Connecting Care” We are seeking your real-life stories that can move, teach, and inspire other physicians. Your StorY Could Win $5,000… Maybe in providing care you connected with a patient in a unique and meaningful way. Maybe you actively engaged a patient in their own care and/or successfully involved their family. Maybe you efectively coordinated care across settings or collaborated as a care team with powerful results. Share your story of how you or others on your care team provided a more connected care experience for your patients. First Prize $5,000 gift card second Prize $2,500 gift card third Prize $1,000 gift card Winning entries will also be published in the March 25th, 2015 issue of Medical Economics and featured on the Modern Medicine Network. Here are some suggested story ideas to get the creative juices fowing (but don’t let these limit your thinking). Consider a time when you: Connected with a patient as a provider in a unique and meaningful way Incorporated successful health team strategies for providing seamlessly coordinated care Efectively integrated your patient portal Used communication methods or skills Leveraged technology for a more connected care experience Involved a family in patient care How to Enter Send us your story in 800 to 1,200 words Submissions must include name, contact email, address, and telephone number Submissions can be sent to MedEc@ Advanstar.com or by mail to: Medical Economics Writing Contest 24950 Country Club Blvd. North Olmsted, OH 44070 Deadline for Submissions All entries must be received by January 31st, 2015 for consideration. S u ppo rte d by Medical Economics Writing Contest Ofcial Rules (NO PURCHASE IS NECESSARY TO ENTER OR WIN) The Medical Economics Writing Contest (the “Contest”) starts on December 18, 2014 at 12:00 a.m. Eastern Time (“ET”) and ends on January 31, 2015 at 11:59 p.m. ET (“Contest Period”). ELIGIBILITY: The Contest is open to licensed physicians who are legal residents of the ffty (50) United States or the District of Columbia, of legal age of majority in their jurisdictions of residence (and at least 18). Employees, temporary workers, freelancers and independent contractors, and their immediate families (spouse and parents, children, siblings and their respective spouses, regardless of where they reside) and those persons living in their same households, whether or not related, of Medical Economics (“Sponsor”) and athenahealth (“Supporter”) and their respective parents, afliates, subsidiaries, participating vendors, promotion or advertising agencies are ineligible to enter or win the Contest. By participating, entrants agree to be bound by these Ofcial Rules and the decisions of the judges and/or Sponsor, which are binding and fnal on matters relating to this Contest. Void where prohibited by law. Contest is subject to all applicable federal, state and local laws. HOW TO ENTER: During the Contest Period, write an 800 to 1,200 word essay that shares your successful strategies, approaches, and/or experiences to providing a more connected health care experience for patients and/or actively involving patients in their own care and send to [email protected] or Medical Economics Writing Contest, 24950 Country Club Blvd., North Olmsted, OH 44070, along with your full name, contact email address, mailing address and telephone number (collectively, an “Entry”). All Entries must be received on or before January 31, 2015. Limit one (1) Entry per person. Entries received in excess of the stated limitation will be void. If handwritten, Entries must be legible. All Entries become the sole property of the Sponsor and will not be returned. Entry must (i) be your own original work, (ii) be in English, (iii) cannot be previously published or submitted in connection with any other contest, (iv) be in keeping with the Sponsor’s and Supporter’s image and (v) not be ofensive or inappropriate, as determined by the Sponsor in its sole discretion, nor can it defame or invade publicity rights or privacy of any person, living or deceased, or otherwise infringe upon any person’s personal or property rights or any other third party rights (including, without limitation, copyright). Without limiting the foregoing, Entries must not contain any confdential or personally-identifying patient information. Sponsor reserves the right to disqualify any Entry that it determines, in its sole discretion, does not comply with the above requirements or that is otherwise not in compliance with these Ofcial Rules. 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Sponsor reserves the right in its sole discretion to cancel or suspend any portion of the Contest for any reason. REQUEST FOR WINNERS LIST: For the names of the Winners (available after March 2015), send a self-addressed, stamped, envelope to: Attn: David A. DePinho, Advanstar Communications, 24950 Country Club Blvd., North Olmsted, OH 44070. ES540495_ME122514_015.pgs 12.04.2014 17:46 ADV theVitals HealtH It leaders call for new onc leadersHIp Can Karen DeSalvo, MD, MPH, MSc, juggle two positions within the U.S. Department of Health and Human Services (HHS)? Leaders of some of the top health IT organizations say no, and have asked that she be replaced with a full-time director. With interoperability between electronic health records systems, meaningful use and healthcare data security at the top of IT concerns, leaders from the College of Healthcare Information Management Executives (CHIME) and Healthcare Information Management Systems Society (HIMSS) wrote a letter to HHS Secretary Sylvia Mathews Burwell requesting immediate action in the Ofce of the National Coordinator for Health Information Technology (ONC). “If Dr. DeSalvo is going to remain as the acting assistant secretary for health with part-time duties in health IT, we emphasize the need to appoint new ONC leadership immediately that can lead the agency on the host of critical issues that must be addressed,” the health IT leaders wrote. The health IT suggest that the ONC employ steady leadership for the next two years. 16 Study: Referral process needs standardizations, new protocols priMAry cAre physicians make millions of referrals to specialists each year, yet there is little protocol to follow and few tools to rely on when determining who will take their patient’s care to the next level. In 2009, there were more than 100 million referrals made during ambulatory visits—that’s roughly 1 in 10 visits resulting in referrals. Tere is a lot of variation in how and when physicians seek specialist intervention—physician training and expertise, as well as the severity of the patient’s illness and their expectations for care, all factor into referral decisions. Yet when physicians make the call to send a patient to a specialist, there is no standard practice for evaluating the ft between the patient and the referred physician. Niteesh K. Choudhry, MD, PhD, and Joshua M. Liao, MD, both of Brigham and Women’s Hospital and Harvard Medical School in Boston; and Allan S. Detsky, MD, PhD of the University of Toronto, Mount Sinai Hospital and University Health Network made the case in a recent issue of the Journal of the American Medical Association (JAMA) for standardizing the referral process. Medical econoMics ❚ December 25, 2014 magenta cyan yellow black “Physicians must often base their referral recommendations on little or no objective information,” the authors write. “Physicians have few mechanisms for personal performance feedback and little or no training in how to evaluate the quality of care that their peers provide.” Standardization could afect both the cost and quality of care, they argue, due to the fact that there is currently little consistency across the profession, with a variation of up to fvefold. Te issue is even more apparent in the inpatient setting, when everchanging on-call specialists are used. Even in ambulatory settings, the authors argue that patients are often referred to generic clinics or departments, with little consideration made by the referring physician as to which particular specialist would best suit the needs of the patient. Of course, authors note, there is a another end of the spectrum where physicians practice much more control over the referral process, but often availability of appointments, who works within certain networks, geographic locations, and the patients’ ability to pay are key factors in the referral process as well. In terms of patient preference, physicians may be apt to refer patients who value thoroughness to specialists who are “liberal” with diagnostic testing, or to those who have similar cultural beliefs as the patient. Te authors suggest that some of the metrics currently reported for various industry initiatives, such as payfor-performance or other federal programs, could also be used to help physicians select specialists for their patients. But that system would still have drawbacks, the authors note. “Although acquiring more granular and detailed data about physician performance maybe helpful, it alone will be insufcient for improving crucial aspects of the referral and recommendation process,” they write. “Knowing that a consultant’s patients generally achieve good glycemic control also does not indicate how easy it is for patients to have their blood drawn, how efectively results are communicated to patients, or how collegial or collaborative consultants and their staf are in comanagement along with referring physicians.” MedicalEconomics. com ES538950_ME122514_016.pgs 12.03.2014 01:51 ADV PATIENT COLLECTIONS IN DEPTH How to maximize collections using online payment systems [23] Cover Story neW for 2015 getting paid for ChroniC Care Managing patients under Medicare’s new payment program by J E FFR EY B E N D IX, MA, Senior Editor Beginning January 1, 2015, medical practices can, for the frst time, bill Medicare for the non face-to-face time spent managing care for patients with multiple chronic diseases. But doing so may prove challenging for many practices, at least at frst. hIghlIghts 01 a challenge for physicians in using the chronic care management codes is persuading patients to participate and pay the required copay. Getty Images/iStock/360/mon5ter MedicalEconomics. com magenta cyan yellow black THE 2015 MEDICARE Physician Fee Schedule includes a Current Procedural Terminology (CPT) Code—99490—that pays for clinical staf time, directed by a physician or other qualifed healthcare professional, in “developing and implementing a care plan for a patient with at least two chronic conditions that are expected to last at least 12 months or until the death of the patient; or that place the patient at signifcant risk of death, acute exacerbation/decompensation, or functional decline,” according to the Center for Medicare and Medicaid Services. Payment is $42.60 for 20 minutes of staf time. Te code can be billed once per patient per calendar month. “Tis is in response to concerns from primary care physicians that they spend a lot of time trying to coordinate care to manage all the diferent healthcare contacts the patient has,” says Cindy Hughes, CPC, CSBC, principal of Cindy Hughes Consulting and a former coding and compliance consultant for the American Academy of Family Physicians. “Te code was developed especially to address staf time spent on those activities, as well as the physician’s time coordinating that work and supervising the staf.” “Very rarely do you have people with just one chronic illness that’s easily handled,” Medical econoMics ❚ December 25, 2014 ES539035_ME122514_017.pgs 12.03.2014 02:29 17 ADV Chronic care management CHRONIC CARE MANAGEMENT Scope-of-service requirements The services a practice must provide in order to bill Medicare for chronic care management (CCM) services under CPT code 99490 are: providing patients with access to care management services 24 hours a day, 7 days a week, which means providing benefciaries with a way to make timely contact with the practice’s healthcare providers to address the patient’s urgent chronic care needs regardless of the time of day or day of the week, inform the benefciary of the availability of CCM services and obtain his or her written agreement to have the services provided, including authorization for the electronic communication of his or her medical information with other treating providers, ensuring continuity of care with a designated practitioner or member of the care team with whom the patient is able to get successive routine appointments, document in the patient’s record that all of the CCM services were explained and offered, and note the patient’s decision whether to accept or decline the services; and providing care management for chronic conditions including systematic assessment of the patient’s medical, functional, and psychosocial needs; system-based approaches to ensure timely receipt of all recommended preventive care services; medication reconciliation with review of adherence and potential interactions; and oversight of patient self-management of medications, creating a patient-centered care plan document to assure that care is provided in a way that is congruent with the patient’s choices and values. The plan must be based on a physical, mental, cognitive, psychosocial, functional, and environmental assessment and an inventory of patient resources and supports, ensuring management of care transitions between and among healthcare providers and settings, including referrals to other clinicians, follow-up after a benefciary visit to an emergency department, and follow-up after discharges from hospitals, skilled nursing facilities, or other healthcare facilities, providing the patient a written or electronic copy of the care plan, and documenting in the EHR that the care plan was provided In addition, when any of the CCM scopeof-service elements refers to a health or medical record, the practice must use an electronic health record that meets either the 2011- or 2014-level certifcation criteria and includes: a full list of problems, medications and medication allergies, which must also guide the care plan, care coordination and any ongoing clinical care, and communication to and from home-and community-based providers regarding the patient’s psychosocial needs and functional defcits, all of which must be documented in the patient’s record Sources: American Academy of Family Physicians, CMS 18 Medical econoMics ❚ December 25, 2014 magenta cyan yellow black MedicalEconomics. com ES539034_ME122514_018.pgs 12.03.2014 02:29 ADV Chronic care management adds David Ellington, MD, FAAFP, a member of the American Medical Association panel that develops the CPT codes. “You fnd chronic medical illness associated with psychiatric illness and developmental problems, and these require a great deal of time to coordinate the care that falls outside the time constraints of the normal evaluation and management codes. Medicare recognized this a couple of years ago and the CPT editorial panel has been trying to refne the codes so as to refect the spectrum of clinical staf time required to take care of these folks.” the biggest obstacle many practices could face may be in obtaining patients’ consent to provide chronic care services, and to pay the required $8 monthly copay. “It’s going to be a very tough thing to get across.” —gEorgE g. EllIs, Jr., Md, FacP, INtErNIst, youNgstoWN, ohIo conTinuaTion of a TrenD Approval of the code is signifcant for two other reasons as well, explains Shari Erickson, MPH, vice president of government and regulatory afairs for the American College of Physicians. First, because it continues the trend of Medicare paying for non face-to-face care it began last year with approval of the transitional care management codes. Second, because it acknowledges and starts to address the large and growing share of the nation’s healthcare spending devoted to people with multiple chronic conditions. A 2013 study by U.S. Department of Health and Human Services found that about 25% of the nation’s adult population has multiple chronic conditions, the care of which accounts for 66% of the nation’s overall healthcare spending. Te twothirds of Medicare benefciaries with two or more chronic conditions accounted for a whopping 93% of that program’s spending, according to another study from 2013 by the Centers for Disease Control and Prevention. Using the CCM code, Erickson says, will give researchers data with which to begin analyzing the care provided to patients with multiple chronic diseases and fnd out what works in reducing high-cost outcomes such as hospital admissions and emergency department visits. requiremenTs coulD limiT use While the new code could result in an income boost for some primary care practices, especially those with large Medicare populations, it also comes with scope-ofservice and billing requirements that could limit its use. (See accompanying sidebars, MedicalEconomics. com magenta cyan yellow black Chronic care management services BILLING REQUIREMENTS The billing requirements for CPT code 99490 include: Informing the benefciary about the availability of the CCM services from the practitioner, including the benefciary’s authorization for the electronic communication of the patient’s medical information with other treating providers as part of care coordination, documenting in the benefciary’s medical record that all elements of the CCM service were explained and offered to the benefciary, and noting the benefciary’s decision to accept or decline the service, providing the benefciary a written or electronic copy of the care plan and documenting in the electronic health record that the care plan was provided to the benefciary, informing the benefciary of the right to stop the CCM services at any time (effective at the end of a calendar month) and the effect of a revocation of the agreement to receive CCM services, and informing the benefciary that only one practitioner can furnish and be paid for these services during the calendar month service period Source: CMS Medical econoMics ❚ December 25, 2014 ES539037_ME122514_019.pgs 12.03.2014 02:29 19 ADV Chronic care management It’s going to involve pulling clinical staff into a process that’s not tracked very well, because it doesn’t involve face-to-face care. It means documenting who they talked to, what they did, why they did it through the course of the month.” —NaNcy ENos, FacMPE, PrINcIPal, ENos MEdIcal codINg, WarWIck, rhodE IslaNd. “Chronic care management: Scope-of-service requirements” and “Chronic care management: billing requirements” for additional details.) Tree in particular will present challenges to many practices. First is the requirement that all CCMrelated services be performed using 2011or 2014-certifed electronic health record (EHR) systems, and that patient records be accessible to other members of the patient’s care team. (See “Chronic care management, scope-of-service requirements.”) Tat means practices not using EHRs, or using older systems are not eligible to bill the code. In addition, the lack of interoperability among EHR systems could make it difcult to share patient information among care providers in diferent locations. “Tere will defnitely need to be some workarounds, given that most EHRs aren’t capable of doing all the moving parts required in the code,” says Erickson. “Tat may be easier for larger practices but it will be a real challenge for smaller ones.” Time-Tracking A second challenge will be tracking the time spent on the activities covered under the code, says Nancy Enos, FACMPE, principal of Enos Medical Coding in Warwick, Rhode Island. “It’s going to involve pulling some of the clinical staf into a process that’s not usually 20 Medical econoMics ❚ December 25, 2014 magenta cyan yellow black tracked very well, because it doesn’t involve face-to-face care,” says Enos. “It means documenting who they talked to, what they did, why they did it through the course of the month.” Enos and other coding experts recommend that practices develop a “fow sheet” for use in tracking and documenting the time spent on each patient’s CCM-related services, then tallying the time at the end of each month to see if it reaches the 20-minute threshold. But doing so will probably require a paper-based process, at least at frst, because EHR systems aren’t set up to capture time in that way, notes Terry Mills, MD, FAAFP, director of patient care systems for Via Christi Health in Newton, Kansas. “No EHR system that I’m aware of now logs time in that way and will automatically calculate it and give you a report,” he says. “If you’re doing it for a small number of patients you can keep paper logs and track all the minutes. But then, frankly, the return probably isn’t worth the hassle.” And while customizing an EHR to capture the time may be technically possible, “it may be too expensive for practices to engage their vendors to do this,” says Erickson. Who qualifies for coverage? A related challenge may be just deciding who qualifes for coverage under the code, Mills adds. “Any 70-year-old with hypertension or diabetes is at risk of decompensation or death within the next year,” Mills says. “So is that the type of patient they mean, or is it someone who’s sicker than that? Our compliance department is unwilling to let us build a system to bill for that population until that population is better defned.” But the biggest obstacle many practices could face may be in obtaining patients’ consent to provide chronic care services, and to pay the required $8 monthly copay. “It’s going to be a very tough thing to get across,” says George G. Ellis, Jr., an internist in Youngstown, Ohio, and Medical Economics’ chief medical adviser. Ellis says he will explain it to patients as “an attempt to control your disease process, and enable you to connect with your care team 24/7, 365 days a year to reduce or eliminate emergency 22 MedicalEconomics. com ES539038_ME122514_020.pgs 12.03.2014 02:29 ADV magenta cyan yellow black ES539590_ME122514_021_FP.pgs 12.03.2014 23:07 ADV Chronic care management … We are concerned that patient consent puts physicians in the position of having to sell this service to their patients in a way that may be uncomfortable because perhaps they have been providing these services already but not in a way that’s transparent to the patient.” —sharI ErIcksoN, MPh, VIcE PrEsIdENt, goVErNMENt aNd rEgulatory aFFaIrs, acP 20 department visits and hospitalizations.” Related to that, Ellis notes, is the question of what happens if the patient doesn’t provide his or her consent, especially since the physician almost certainly is already performing many of the services covered in the code. Doctors won’t stop monitoring the patient’s health or responding to his or her needs, but “it’s long overdue that we get paid for the services we provide,” Ellis says. (A request to CMS for comment had not been answered at press time.) Te patient consent requirement was included so as to encourage “patient engage- ment and shared decision-making around care, because there’s an evidence base around its benefts in terms of patient outcomes and savings,” says the ACP’s Erickson. “But we are concerned that patient consent puts physicians in the position of having to sell this service to their patients in a way that may be uncomfortable because perhaps they have been providing these services already but not in a way that’s transparent to the patient. “We’re hoping that as more patients and clinicians become familiar with these services it’s not such an issue,” she adds. “But it will defnitely be a learning curve on both sides.” ChroniC Care management of three ailments Could save mediCare billions Study fnds heart failure, COPD, and diabetes management could save $1.5 billion By Jeffrey Bendix, MA Senior Editor A new study provides further evidence that improving patient care coordination can result in better outcomes and lower healthcare costs, especially among patients with chronic diseases. A team of researchers followed approximately 296,000 Medicare patients with congestive heart failure, chronic obstructive pulmonary disease, or diabetes for a 12-month period spanning 2008 and 2009. Their objective was to measure costs differences associated with care continuity during episodes of care. 22 Using a tool known as the Bice-Boxerman continuity of care index, which determines how well a patient’s care is coordinated among different providers, the researchers found that even modest improvements in continuity of care resulted in fewer emergency department visits, lower rates of complications, and reduced overall costs for episodes of care. Peter Hussey, PhD, the study’s lead researcher and a senior policy researcher at Rand Corporation, estimates that Medicare could save $1.5 billion annually if patients with the three conditions received at least the median level of care Medical econoMics ❚ December 25, 2014 magenta cyan yellow black continuity observed in the study. “Improving the coordination of care for patients with chronic illnesses can be difficult to achieve, but our findings suggest that it can have benefits for patients and the healthcare system,” Hussey says in a RAND press release. Care coordination has been identified as a priority area by the Institute of Medicine, and many of the new payment and patient care models, such as the Patientcentered Medical Home, are premised on close care coordination. Earlier studies have shown that patients who had a close, continuous relationship with a physician were more likely to receive recommended medical care. Many programs designed to improve care coordination have not lowered costs or improved outcomes, however. Results of the study were published by JAMA Internal Medicine. MedicalEconomics. com ES539036_ME122514_022.pgs 12.03.2014 02:29 ADV F i nan c ial advi c e F r o m th e e x p e rts Financial Strategies MaxiMize patient collections with online capabilities by Rob e Rt C. SCRogg i n S, J D, CPA, CH bC Contributing author With the addition of electronic health record (EHR) systems and patient portals, many medical practices today are better positioned to incorporate modern processes and procedures with which to manage their accounts receivables more effectively, particularly by improving collections from patients. In addItIon to using the EHR or patient portal, practices can fnd standalone services that can facilitate patient payments via the Internet or telephone. We have found with our clients that practices incorporating these payment options have been able to reduce their outstanding accounts receivable. The reason for this is simple: Accessing fnancial information and paying bills online is now commonplace, and in many respects an expectation of the customer—in this case, your patient. Since there are many ways to establish an online payment system, there is not much value in discussing the particulars of any one system, but MedicalEconomics. com magenta cyan yellow black rather focusing on how to efectively convince your patients to engage with the online process. In order to do this, specifc protocols to communicate with each patient must be established when your staf has the opportunity to do so faceto-face. We fnd that many practices have not updated their fnancial policies and processes to communicate with patients regarding the availability and benefts of online payment options. Instead, the fnancial policy is often several years out of date and are from the time when options for payment were in person or through the mail. We recommend that practices use the following strategy to help achieve patient compliance with payment policies. Establish a point person Identify a specifc individual or team in your practice who will be responsible for communicating with your patients about your practice’s fnancial policies. This may be employees at the front desk or in the billing department, or in a larger practice perhaps even a specifc person whose jobs consists solely of discussing fnancial arrangements with patients. If this task is not assigned to anyone specifcally, it becomes no one’s responsibility. The fnancial policy simply becomes another page or two given to patients when they arrive, posted on the wall and on your practices’s website. Given the amount of money at stake with high-deductible insurance coverage, a few minutes of face-to-face communication with each patient regarding how the practice handles the portion of charges that is the patient’s responsibility will go a long way. Discuss with patients The discussion with each patient regarding the practice’s fnancial policies and procedures need not be lengthy. It is a good idea to determine in advance the realistic amount of time staf will be able to spend with each patient. By doing so, the conversation can focus on the most important aspects of what each patient needs to know. For example, if there is only time to spend a minute or so with each patient, the goal is twofold: ❚ highlight the most important information by circling or highlighting specifc items in the policy, and ❚ develop rapport between your staf member and the patient. If the patient indicates a preference for making payments online, Medical econoMics ❚ December 25, 2014 ES538923_ME122514_023.pgs 12.03.2014 01:37 23 ADV F i nan c ial advi c e F r o m th e e x p e rts Financial Strategies focusing on the method for doing so should be a priority. Gather patient information The practice should determine and record the following information for each patient, to help direct the conversation: ❚ The patient’s email address, ❚ The patient’s referred method of communication (home phone, cell phone, e-mail), and ❚ the patient’s preferred method of payment. Note: The Health Insurance Privacy and Accountability Act and related privacy regulations must be followed. So long as appropriate patient authorizations are obtained and communications are handled properly, having a record of the best way to communicate with each patient will be helpful in building an efficient process going forward. What to review The following information from the fnancial policy should be reviewed with each patient: MEtHodS A description of how the practice handles statements for the patient’s responsibility portion of care. 24 MANY PRACTICES HAVE NOT UPDATED FINANCIAL POLICIES AND PROCESSES TO EFFECTIVELY COMMUNICATE WITH PATIENTS REGARDING THE BENEFITS OF ONLINE PAYMENT. For example, if statements are sent while insurance is pending prior to the patient’s responsibility being determined, or if statements are sent only after insurance is resolved. Basically, the patient needs to know (and the billing statements should explain) whether the patient’s balance has been determined and should be paid upon receipt of the statement. This information should be provided in any case, but particularly when the patient has the option of making a payment online, because many patients will Medical econoMics ❚ December 25, 2014 magenta cyan yellow black pay an invoice through an online system quicker than they will by check or credit card via ordinary mail. If it is unclear if a balance is due, the statement will most likely be put aside. a StatEMEnt SaMPLE The fnancial policy should include a sample of the statement the patient will receive. The sample statement should use highlighting and notations to direct the patient to the instructions for making payments online or by telephone. dEVELoP RaPPoRt The practice representative who discusses the procedures with the patient should provide his or her business card and contact information as a means of developing rapport. The established rapport resulting from the face-toface meeting will be helpful in the future if your staf fnds it necessary to contact patients with delinquent balances. For example: “Hello Mrs. Jones, this is Amy from Dr. Smith’s office. I helped you understand the payment options at the time of your appointment. You indicated a preference to make your payments online. Hopefully, you have retained the instructions we went over or are able to determine how to make an online payment based on the instructions appearing on your most recent statement. If you need any assistance, please do not hesitate to call me. I enjoyed meeting you and am always here to help.” This kind of relationship-building will likely pay dividends going forward as your practice works with patients to ensure the best care and timely payment. MORE ONLINE 8 tips for reducing collection agency referrals http://bit.ly/1xTKs3H Collecting patient bills: When to use a collection agency http://bit.ly/1zk4alW Patient portals help improve communication and build efeciency for patients http://bit.ly/1xM11NL How to optimize your patient portal http://bit.ly/1uwjg3N Robert C. Scroggins, JD, CPA, CHBC, is a management consultant and principal with ScrogginsGreat, Inc., in Cincinnati, Ohio. Send your fnancial management questions to [email protected]. MedicalEconomics. com ES538926_ME122514_024.pgs 12.03.2014 01:37 ADV ImprovIng patIent engagement In Depth How personalized medical care can improve the physician-patient relationship, patient outcomes and physician well-being. [30] Physicians and the facility fee dilemma The rising price of healthcare and the increasing use of facility fees is forcing physicians to confront costs when treating and referring patients by Char lotte h u ff Contributing author HIGHLIGHTS 01 More states are requiring healthcare providers to disclose pricing information when patients request it. 02 Physicians should consider costs when treating and referring patients to specialists. Te growing national scrutiny of facility fees charged by hospitals is placing many physicians in the difcult position of factoring costs into treatment decisions, and prompting a debate on whether physicians have a responsibility to engage patients on the fnancial side-efects of recommended treatments. SInce october, hospital-owned physician practices in Connecticut that charge facility fees have been legally required to notify patients of the fees in advance, one of the latest developments in the ongoing contentious fee debate as more physicians nationwide opt for employment over independent practice. Te Connecticut law, believed to be the frst according to that state’s attorney general ofce, builds on other recent scrutiny MedicalEconomics. com magenta cyan yellow black of facility fees, which are sometimes added on top of the physician’s professional fee. In nearby Rhode Island, the attorney general’s ofce also is monitoring fees, with the possibility of fling legislation to shed better light on medical pricing, according to a spokesperson there. Earlier this year, the Medicare Payment Advisory Commission (MEDPAC) recommended adjusting the rates for some medical services provided in hospital outpatient Medical econoMics ❚ December 25, 2014 ES539061_ME122514_025.pgs 12.03.2014 02:57 25 ADV Facility fees Should physicians treat cost as a side effect? By Chris Mazzolini, MS s the prices of healthcare procedures and treatments rise, physicians are increasingly being forced to grapple with how these runaway costs are impacting their patients. Should physicians, who are entreated to “do no harm,” consider costs when recommending treatment? Increasingly, many physicians and healthcare advocates say they should. Indeed, a commentary published in the New England Journal of Medicine in october 2013 argued that physicians should approach treatment costs as a side effect they must consider as part of the calculus of making a medical decision. the authors, Peter a. ubel, MD, amy P. abernethy, MD, PhD, and S. Yousuf Zafar, MD, MhS, say that physicians can’t ignore that “healthcare costs have risen faster than the Consumer Price Index for most of the past 40 years.” “Since healthcare providers don’t often discuss potential costs before ordering diagnostic tests or making treatment decisions, patients may unknowingly face daunting and potentially avoidable healthcare bills,” the authors write. “Because treatment can be ‘financially toxic,’ imposing out-of-pocket costs that may impair patients’ well-being, we contend that physicians need to disclose the financial consequences of treatment alternatives just as they inform patients about treatments’ side effects.” elisabeth rosenthal, MD, a nonpracticing physician and a reporter for the New York Times, has argued 26 that physicians must better engage patients on costs. rosenthal’s ongoing series, “Paying till It hurts,” highlighted the rising cost of healthcare in the united States and the increasing burden being shouldered by patients. her coverage focused on the cost of common procedures and treatments, including child birth, colonoscopies, asthma medication, joint replacements, and stitches. During a keynote address at the american College of Physicians annual conference in april 2014, rosenthal said she has spoken to hundreds of patients who told her that initiating cost discussions with physicians often feels embarrassing and off-putting. So physicians must take the lead, she said. “Doctors are not bringing up the issue, and patients are embarrassed to bring it up,” rosenthal said. Physicians have to lead the way to make it something that’s not unmentionable. Physicians are the point of contact with these patients, and patients feel their relationship with physicians is being eroded. “Most of these people really love their doctors, they just don’t love their bills. these bills are seen as coming from the doctor. You guys have the ability to push back on that and have an immediate effect,” she added. rosenthal said that physicians becoming more involved in these cost issues as patient advocates is key, and she noted that there has been movement in that direction. She pointed to the New England Journal of Medicine. “If their hip is better, but they’re losing their house, that’s not a good outcome,” rosenthal said. Medical econoMics ❚ December 25, 2014 magenta cyan yellow black departments “so they more closely align with the rates paid in freestanding physician offces.” Te American Hospital Association says the higher rates are needed to cover all of the additional facility and patient care requirements stipulated by the Centers for Medicare & Medicaid Services (CMS) and numerous other entities, once a physician practice bills under the umbrella of a hospital system. “All of those requirements that are on a hospital outpatient department— that’s why CMS pays at the higher outpatient rate rather than the physician fee schedule,” says Erik Rasmussen, AHA’s vice president of legislative afairs. Meanwhile, hospital employment is becoming increasingly common among physicians. In 2012, 29% of doctors worked directly for a hospital or for a practice that was at least partially hospital owned, compared with 16.3% in 2007, according to the most recent survey data from the American Medical Association. For doctors practicing on both sides of the fee divide, the costs and growing public discussion holds the potential to alter the competitive landscape as they jockey for patients. Te higher price tag increasingly is being shouldered by patients, a result of the proliferation of high-deductible plans among both employer-funded policies and those sold through the health exchanges established by the Afordable Care Act. Among the emerging conundrums: When doctors who don’t charge a facility fee refer a patient, should they tell them which physicians do and which ones don’t? Another practical dilemma: How should newly-employed doctors educate patients about the additional billing cost? Doug Gerard, MD, a general internist in New Hartford, Connecticut, who submitted written testimony supporting the state law, says that now he avoids referring patients to employed doctors in his local community. At the same time, he sympathizes with those doctors who, he says, pursued employment to avoid the overhead, regulatory and other headaches of independent practice, and fnd themselves “stuck in this quandary,” as Gerard describes it. “Now the patients are showing up in their ofces, and poor old Dr. Jones looks like a mercenary when they see this extra bill that comes by,” Gerard says. “But it’s not him MedicalEconomics. com ES539062_ME122514_026.pgs 12.03.2014 02:57 ADV Facility fees PaTIenTS are SHowInG uP In THe offIce, and [THe PHySIcIan] LookS LIke a Mercenary wHen THey See THIS exTra bILL. buT ... IT’S THe HoSPITaL THaT’S cHarGInG IT.” —douG Gerard, Md, InTernIST, new HarTford, connecTIcuT that’s getting the money. It’s the hospital that’s charging it. Tey [the employed doctors] are as upset about it as I am.” LegisLative action Te Connecticut law, which grew out of complaints and a report compiled by the state attorney general’s ofce, mandates that patients receiving non-emergency outpatient services must be notifed in advance about the fee, including an estimate of how much they will be charged. Depending on when the appointment is made, the notifcation must either be sent in advance, or provided at the time of the appointment. Te fee details also must be posted in the practice, including the patient waiting areas. Te Connecticut attorney general’s offce, which requested data on fees from the state’s 29 acute care hospitals, found that 22 charged a facility fee, according to its April 2014 report, with fees ranging from $100 to more than $1,000. A common theme among the complaints was that the patient was only charged the physician fee at the time of the appointment, and thus was surprised by receiving a separate facility bill later. Tose fndings mirror similar fnancial concerns raised in the 2014 MEDPAC report, in which the commission recommended that “if patient severity is similar and a service can be provided in a lower cost setting without a reduction in quality or safety, Medicare should pay a rate based on the cost of the more efcient setting.” As one example of the current cost diferential, the commission detailed how Medicare’s 2014 reimbursement would be $228.02 to cover a Level II echocardiogram without contrast in a free-standing physician ofce. If the same service were to be provided in a hospital outpatient department, the total MedicalEconomics. com magenta cyan yellow black reimbursement including the facility fee would total $492.22. In its report, the Connecticut Attorney General’s ofce cites fnancial incentives under the Afordable Care Act to create accountable care organizations, with the longterm goal of better care and lower costs, as one factor driving the hospital acquisition of physician practices. Others take a more pessimistic view. “Tey are basically buying referrals by purchasing physician practices,” says Steven Lester, MD, a radiation oncologist and board member of the Association of Independent Doctors (AID), a trade group created in 2013 in Winter Park, Florida. Given the increase in high-deductible plans, many of these higher costs are coming straight out of patients’ pockets. In 2014, 20% of privately insured employees had that form of coverage versus 8% in 2009, according to an annual health benefts survey conducted by the Kaiser Family Foundation and the Health Research & Educational Trust. Gerard had already heard some patient complaints about the added fees when he consulted a dermatologist in 2013 for a simple skin biopsy. Gerard received two bills— $132 for the physician’s work and $213 for the hospital facility fee. Because his own coverage was through a high-deductible plan, he had to pay the additional cost. Gerard has since changed his referral patterns, largely steering clear of employed doctors in his community. Along with larger bills for patients, the costlier referrals to those hospital-owned practices could afect his practice’s bottom line, as insurers increasingly monitor a physician’s total cost of care, he says. Te Connecticut law, which went into efect in October, was endorsed by the Connecticut State Medical Society. Te society believes all pricing should be open, includ- Medical econoMics ❚ December 25, 2014 ES539060_ME122514_027.pgs 12.03.2014 02:57 27 ADV Facility fees HeaLTHcare ProvIderS and PrIce TranSParency: a Survey of STaTe ruLeS Some states require healthcare providers to provide patients with pricing information, but the method and timing of price disclosure requirements vary from state to state. NH WA MT OR ND ID WY NV CA UT AZ VT MA WI SD IA NE CO IL KS AR IN OH KY RI PA CT VA NC DE WV TN MS AL TX NY MI MO OK NM ME MN NJ MD SC GA DC LA FL AK HI No law requiring disclosure of charge data Charge data must be provided to patients when requested Source: George Washington University’s Hirsh Health Law and Policy Program and Robert Wood Johnson Foundation ing facility fees, says Robert Russo, MD, the society’s president. AHA’s Rasmussen declined to comment on the law, saying that the national organization doesn’t weigh in on state legislation. As of early October, Gerard said it was unclear if the prior written fee notifcation had resulted in patients choosing other doctors. If a similar law were passed in Florida, AID’s Lester think it would infuence patients “initially” to opt for doctors that weren’t employed by hospitals. “But I think in the end it would probably balance out,” he says, “because the hospitals would quit charging these exorbitant facility fees once it was published.” Fee-reLateD coMMUnication A physician practice that’s considering possible hospital employment should discuss any additional fees early on in the negotiations so it’s not a surprise for them or their patients once the deal has been completed, says Anders Gilberg, senior vice president of 28 Medical econoMics ❚ December 25, 2014 magenta cyan yellow black government afairs for the Medical Group Management Association (MGMA). In some health systems, the fee is not charged for hospital-owned practices, he says. “From an ethical or patient-centered standpoint, they choose not to, because they don’t feel comfortable with the double bill,” Gilberg explains. MGMA also is advising primary care physicians who don’t charge fees to keep a close eye on where they refer, because accountable care organizations and other new payer models increasingly are tracking the total cost of care, Gilberg says. “If you’re referring into a system that is twice as expensive as an independent practice, those costs will be attributed to you under these attribution models for value-based care, and you could potentially be dinged or face a penalty as a result,” Gilberg says. While cost is important, it’s far from the only factor that infuences a patient’s perception of their doctor, says Meryl Luallin, chief executive ofcer of the consulting frm SullivanLuallin Group in San Diego, California. “If the physician is inexpensive but at the same time is brusque and rough, cost is only one small element of how the patient feels about their experience,” she says. Still, if a doctor’s practice becomes hospital owned, it’s important not to surprise existing patients with any related fees, she says. One of Luallin’s clients encountered precisely this scenario when a practice that delivered chemotherapy in the same ofce suite was now billing patients roughly double after a hospital acquisition. Among the measures Luallin suggests is that the practice provides current patients with written details about the acquisition, either at the time of the visit or mailed a few days before. Tat letter, while referencing that there may be a diference in fees, should outline the patient care benefts of practicing within a larger hospital system. “If you are educated ahead of time as to what to expect, you’re not likely to complain,” she says. Doctors who continue to practice independently also can position themselves competitively by compiling a short summary of what that practice model can ofer, says Judy Bee, president of Practice Performance Group in La Jolla, California, and an editorial consultant for Medical Economics. Keep the writing concise and frame the points in MedicalEconomics. com ES539058_ME122514_028.pgs 12.03.2014 02:57 ADV Facility fees MoST PaTIenTS wILL Say, ‘If IT’S equIvaLenT quaLITy, THen I wILL Go wHere IT’S LeSS exPenSIve.’ ” —STeven LeSTer, Md, board MeMber, THe aSSocIaTIon of IndePendenT docTorS a positive tone, she says. “It’s always in the vein that it’s in the patient’s best interest to get all of the facts.” Te fact sheet can describe how one fee will be charged for an ofce visit at that practice, whereas some practices will charge two, Bee says. Perhaps incorporate an example to illustrate the diference, she says. It can explain that referrals to specialists will be made “to specialists that we know and we trust,” she says. “Specialists that we think would be a good ft for you. We don’t care what system they belong to.” In the Orlando area, Lester’s radiation oncology practice encloses a similar letter with its information package to new patients. “We would like to reassure our patients that we have not been acquired, nor do we have any intention of being acquired, by a hospital system,” the letter states at the outset. Te letter goes on to explain that hospitalowned practices charge higher costs that are passed along to insurers and patients. In contrast, “Te only partnership we seek is with our patients and with our goal of the best care possible for each individual,” it says. When making referrals, Lester doesn’t finch from discussing cost diferences. For example, if a patient needs a colonoscopy, he will spell out several physician options, and that the total cost likely will be higher when one of the doctors is employed. “Most patients will say,`If it’s equivalent quality, then I will go where it’s less expensive,’” Lester says. DiviDing coLLegiaL reLationships Tose higher costs, though, aren’t billed in a vacuum, AHA’s Rasmussen points out. “We have to be able to have an emergency department and ambulances and surgical suites and doctors on call,” he says. “Tere is a reason why people run to hospitals in times of emergencies and aren’t running to a physician’s ofce. And all of those capabili- MedicalEconomics. com magenta cyan yellow black ties need to be paid for.” For their part, doctors describe the resulting strain on referral relationships and friendships. “Say you have worked with another doctor for 20 years,” Lester says. “Say that you’ve even cared for their family members, and then suddenly you get no more referrals when that doctor is employed by the hospital.” Russo, the Connecticut medical society’s president, instead views employment as “kind of a box that doctors were squeezed into.” In his own specialty of radiology, a series of Medicare fee cuts since 2006 have resulted in 70% of the state’s radiologists either shutting down their practice or moving to hospital employment, Russo says. Along with the cuts, the costs related to implementing electronic health record systems, complying with regulations and administrative overhead continue to accumulate. Tat costly overhead is what the facility fee is covering, when physicians move to hospital employment, Russo says. “Te devil isn’t the facility fee,” he says. “Te truth is, it’s the cost to do business. It’s the cost of the doctor’s ofce.” Nevertheless, employed physicians feel as though they are caught in the cross hairs of patient anger where these fees are involved, Russo says. “Tey say,`I’m the only one the patient has a relationship with, so they blame me for the fact that I couldn’t survive in the environment that the government and the insurance companies set up.’ ” More online Hospital consolidation trend leads to rise in facility fees http://bit.ly/1AIo7ap Costs may give independent doctors an edge http://bit.ly/1AIo7ap Medical econoMics ❚ December 25, 2014 ES539059_ME122514_029.pgs 12.03.2014 02:57 29 ADV Engaging patients FIGHTING BACK SERIES W I N N E R How engaging patients improves health outcomes Why the solution to the challenges of healthcare can be found in the exam room of a primary care physician by AN D R EA B ETH KLE M E S, DO, FACE Contributing author Physicians are operating their practices in midst of monumental change. And it signals the need for useful, practical and thoughtful solutions. The winners and honorable mentions in this year’s writing contest delivered just that. Medical Economics unveiled the previous winners in our print and mobile editions between August and November. Many of the entries in this year’s contest will be featured on medicaleconomics. com to offer even more great ideas from your colleagues in practice and academia. 30 T he woman in the examining room was suffering from several chronic conditions that she and her primary care doctor had difcultly managing. Te doctor thought these illnesses should be under control and wanted to get to the core of the problem. So during a follow-up visit, they just talked. Over the next 30 minutes—a visit duration unheard of in most medical practices—the patient opened up. “I’m going to tell you something I’ve never told anyone, even my husband,” the woman confded. She recounted a violent sexual assault on her when she was a child in Europe during World War II. She had repressed the memory for almost 70 years. Yet, it apparently lurked in the background, becoming the source of ongoing struggles. With this door opened, the woman and her doctor together were able to start on the path to recovery. Today, her difculties are behind her. Teir shared tale serves as an example of how improved doctor-patient engagement can lead to the best possible outcomes. As practitioners, politicians, executives and consumers seek ways Medical econoMics ❚ December 25, 2014 magenta cyan yellow black to improve healthcare outcomes and the patient experience, the model for many doctors is found in the place where it all begins: Te doctor’s ofce. Practicing medicine today, though, is not the same as when most of us left medical school. We graduated with dreams of preventing disease, helping people and making a difference in their lives. We know the key to improving health and wellness is creating an engaging experience that invites open dialogue between patient and practitioner. Tis encourages improved patient compliance and delivers more positive results at a lower long-term cost to the individual and the nation’s healthcare delivery system. Tis way of practicing medicine is no longer possible for most physicians. With the daily demands and overhead of primary care, we must see more patients just to keep our doors open. Health executives call this increasing mean throughput; physicians call it burnout. Over 77% of physicians are pessimistic about the future of the medical profession and 58% would not recommend medicine as a career. It’s no secret patients are increasingly frustrated. Tey talk about the “rule of threes— three months to get an appointment, three hours in the MedicalEconomics. com ES538937_ME122514_030.pgs 12.03.2014 01:37 ADV Engaging patients waiting room and three minutes with the doctor. Tis is only slightly exaggerated. Te average ofce visit is only about eight minutes. You can’t delve into chronic conditions and prevention in eight minutes, much less explain cardiac infammation, fat grams or carbs. Disease prevention is a whimsical fancy. It’s no secret either that medical outcomes are worsening. Most of our healthcare costs come from preventable, chronic disease. But who has the time to coach patients and work with them to focus on healthy eating and exercise? We have all the latest tools, but can’t deliver the most basic care. As some have said, “We’re in the Golden Age of technology, but the Dark Ages of delivery.” We have all these resources, but no time to utilize them to their highest and best use. Many physicians have the desire to deliver improved care, but don’t know how to manage the conficting demands of delivering patient-centered care in what’s become a time-starved schedule. Te solution for many is personalized medicine. In this model, doctors partner with patients to keep them healthy. We spend time discussing prevention and wellness, not just putting Band-Aids on chronic conditions or referring out to specialists. By creating a practice model built on the physician-patient relationship and greater in-ofce coordination and collaboration across the healthcare continuum, practice innovators have witnessed increased patient engagement and compliance and reduced costs to patients, insurers and government providers alike. For an annual fee that ranges from $1,500 to $2,200, depending on the provider, patients receive a set of non-covered services, screenings and interventions designed to identify risk, prevent events, encourage change of detrimental lifestyle habits and improve quality of life. To be able to practice in this fashion, the patient roster is limited to a maximum of 600 patients. Each patient enjoys a 90- to 120-minute annual wellness visit similar to an executive style physical. Tis includes an exam, review and coaching for every patient. Follow up visits last 30 minutes. Under this calculation, doctors see eight to 12 patients a day. Physicians beneft on multiple fronts. We MedicalEconomics. com magenta cyan yellow black enjoy fnancial stability in this uncertain time. We regain the freedom to practice the way we were trained. Our time, tools and technology improve our abilities and make us even more valuable to our patients than we were before. Partnering with a consultant or an organization who provides the resources to transition successfully to this model is critical particularly to ensure that your practice is compliant with all federal and state laws. Te model even improves national outcomes. Hospitalizations are down – by 79% in Medicare patients in one year and 72% in commercial patients. Readmission rates for common problems (Acute MI, CHF and pneumonia) are all under 2%, as compared to the national averages that range from 15% to 21%. Control of chronic conditions is better against all benchmarks and together, these saved the healthcare system over $300 million a year. Te patient benefts of a smaller size practice include same-day appointments, 24-hour availability, no waiting and a higher level of coordination of care. As a result, patient satisfaction tops 94%, with nine in 10 patients renewing annually. Moreover, physician satisfaction is over 95%. With the right tools and model, we get to practice medicine the way we had been trained. We fnd the time to talk. We tease out buried details, identify issues, and become the hands-on healers we once were. For their part, patients become more accountable and see real results. Today’s patient-centered medicine and personal care models were developed to let us deliver care that’s not one size fts all. We’re able to focus on prevention and wellness so we can work with our patients to live healthier lives. Many physicians in this model were ready to leave medicine. Personalized medicine has reignited that fre they once held for medicine and has encouraged many of us to remain in practice. Yes, healthcare is changing. So, too, is healthcare delivery. Doctors must be the change they seek. With the right tools and model, we get to practice medicine the way we had been trained. We find the time to talk. We tease out buried details, identify issues, and become the hands-on healers we once were.” Andrea Beth Kelmes, DO, FACE, is chief medical ofcer for MDVIP, a national network of physicians practicing personalized medicine. She is based in Boca Raton, Florida. Medical econoMics ❚ December 25, 2014 ES538938_ME122514_031.pgs 12.03.2014 01:37 31 ADV In Depth EmployEE manuals and liability How staf policies mitigate risk [37] transitional CarE managEmEnt 101 How to integrate TCM into your practice [38] Building a strategic business plan for your practice A practice management expert discusses how to plan for the future of your practice—and charts a course to get you there by Marg i e Sati n S ky, M Ba Contributing author HIGHLIGHTS 01 Without a formal process for identifying your mission, values, goals, projects, timing, barriers, opportunities, and strategies, you are likely to miss good opportunities and make serious and expensive mistakes 02 Start with an honest assessment of all aspects of your current practice by asking tough questions of owners, senior managers, and staff. 32 Te business of medicine becomes more challenging each day. Troughout the country, physicians are experiencing organizational changes in the delivery system, reimbursement for demonstrated value rather than quantity of care, enhanced technology, and an everchanging regulatory environment. Because of these challenges, strategic business planning is more important than ever. Why bothEr with strategic business planning at all? Imagine building a house without a blueprint or taking a family vacation without a destination. Your practice is no diferent. Without a formal process to identify your mission, values, goals, projects, timing, barriers, opportunities, and strategies, you are likely to miss good opportunities and make serious and expensive mistakes. A well-structured strategic business planning process can help your practice in both Medical econoMics ❚ December 25, 2014 magenta cyan yellow black the short and the long term. Let’s start with immediate value. First, strategic business planning provides clear direction, preventing the haphazard occurrence of activities that may actually work against each other. Second, the process ofers an opportunity for practice owners, managers, and other workforce members to collaborate in setting the future direction of the practice. Participation in planning enhances the likeli- 34 MedicalEconomics. com ES539166_ME122514_032.pgs 12.03.2014 03:34 ADV Medical Economics’ enewsletters are weekly and FREE! Be successful in your practice, with our help Receive timely information on the latest developments in primary care practice management, finances, health law, and other matters vital to your livelihood by signing up for Medical Economics eConsult, delivered to your emailbox every week. SIGN UP TODAY! To sign up, visit MedicalEconomics.com/enewssignup magenta cyan yellow black ES539641_ME122514_B33_FP.pgs 12.03.2014 23:10 ADV Business planning Revenue worksheet Consider the following questions regarding revenue, payers and other financial items. non-Patient revenue (if any): Will you generate income from teaching, clinical research, or any other sources beside patient revenue? PayerS: Identify the public and private payers with which you will have contracts. Make note of important clauses, such as termination, pay for performance, auditing provisions, etc. voluMe of CliniCal ServiCeS: The plan is to build up DayS revenue outStanDing: Calculate this using an the volume of visits from new and existing patients over time. Analyze the baselines your practice is starting from, and chart milestones as you proceed. average. groSS revenue By tyPe of ServiCe: Given your specialty, we expect that you will provide in-ofce care and not do procedures at other locations. What evaluation and management codes will you use most frequently? Will you do any testing in the ofce, and if so, what? SPeCial relationShiPS: Will you participate in an Accountable Care Organization (ACO)? inflation: We recommend adding no infation for revenue to your calculations, given the uncertainty of the reimbursement environment. ContraCtual allowanCe anD allowanCe for BaD DeBtS: The target is 50% gross revenue. 32 hood of successful implementation of agreed upon projects and priorities. Tird, it allows the practice to set priorities. Everything can’t be done simultaneously, so consensus on a logical order makes more sense than launching multiple initiatives simultaneously. Fourth, strategic business planning ofers the potential for enhanced fnancial performance. Fifth, clarity of focus can improve the quality of patient care. In addition to all these short-term benefts, strategic business planning has great long-term value. After it’s fnished, a practice can use it as the benchmark against which to measure progress in achieving agreedupon goals. New opportunities for program expansion and operational improvements can also be vetted against the plan for consistency. Start with an honest assessment of all aspects of your current practice by asking these types of questions of all owners, senior managers, and other workforce members: mission: Is your mission statement current, and does it accurately refect the practice’s direction for the next fve to 10 years? Values: What’s important to your practice, and do you deliver care, interact with patients and colleagues, 34 Medical econoMics ❚ December 25, 2014 magenta cyan yellow black and manage your workforce in ways that are consistent with those values? strengths, weaknesses, opportunities, and threats (sWot): Given your practice’s mission and values, in what areas do you excel? Where are you weak? What opportunities and threats to those opportunities do you see? goals: What are the practice’s specifc goals with respect to organization and management, fnancial management, human resources, marketing, information technology, operations, quality initiatives, and compliance? Have the owners and senior managers reached consensus on those goals? Have you made progress toward reaching the goals? projects: Within each category listed under goals, what are your major projects, and have you prioritized them? Plans come with a price tag; have you estimated the cost of each project? Do workforce members have the ability and time to accomplish the projects on your list? barriers, opportunities, and strategies for each project: Be honest about the hurdles, 36 MedicalEconomics. com ES539167_ME122514_034.pgs 12.03.2014 03:34 ADV Business planning Expenses worksheet Explore the expenses that your practice will incur. aCCounting: Ask your accountant to companies that you anticipate you may use. Add 30% for the cost of benefts. estimate the cost of providing assistance on an annual basis. laB feeS: If you are doing testing in taxeS (Payroll): This amount should the ofce, what are the fees? Billing anD ColleCtionS (outSourCeD): Some practices laB interfaCeS: Depending on be included in salaries/wages/benefts as outlined above, but make note of it. outsource billing and collection to an external vendor. Are you considering this option? If so, we’ll estimate the annual cost as a percentage of net revenue. BookS anD SuBSCriPtionS: Estimate the annual cost for 1 to 5 years. ContriButionS anD PuBliC relationS: Estimate the annual cost for 1 to 5 years. ConSulting feeS: Items in this category include practice management consultation, IT support, credentialing, and any other consultants that you expect to engage for 1 to 5 years. Continuing MeDiCal eDuCation anD MaintenanCe of CertifiCation: Estimate the annual cost for 1 to 5 years. CaPital equiPMent: Develop an itemized list of existing capital equipment and obtain vendor estimates for any future acquisitions. Coverage: Will you share call with another physician? DueS for ProfeSSional SoCietieS anD hoSPital PrivilegeS: Identify the professional societies to which you will belong and the annual dues for each. Identify the hospitals to which you will admit patients and the annual dues for each. If you belong to an ACO, add the annual dues. general BuSineSS liaBility inSuranCe: Obtain several estimates of the monthly cost. inforMation teChnology: Although you don’t need to select an IT vendor for purposes of strategic business planning, obtain estimates from several MedicalEconomics. com magenta cyan yellow black the electronic health record vendor that you select, you may need to purchase an interface. legal ServiCeS: Ask your attorney to teleCoMMuniCationS: Obtain estimates from several companies. travel: Estimate costs for travel. estimate the annual cost for legal services for 2 to 4 years. equiPMent rental, CoPierS, PoStage: Estimate monthly costs. loan PayMentS anD intereSt: DePreCiation (BuilDing anD equiPMent): Calculate depreciation If you borrow money, assume a 5.5% interest rate. MaintenanCe, rePairS, anD Cleaning: Estimate using cost per based on a life of 5 years. ProfeSSional ServiCeS: square foot calculations. If you will purchase any other professional services, factor in those costs. MalPraCtiCe inSuranCe: weBSite: If your practice is developing Obtain estimates of annual costs from multiple providers. Marketing, aDvertiSing, anD PuBliC relationS: Estimate the annual cost for various services, including business cards, announcements, forms, other printed materials and website design. The cost of website programming is a separate item. MeDiCal SuPPlieS: Include any initial purchase in capital expenses and estimate a monthly cost going forward. MiSCellaneouS: Add a cushion for unexpected expenses. offiCe SuPPlieS: Estimate the monthly cost. rental/leaSe exPenSeS: Estimate the monthly rent and up-ft cost if there is one. SalarieS, wageS, anD BenefitS: Identify workforce members and compensation levels and beneft costs for all existing team members. Chart out the new or existing positions you plan to fll in the next year, and use state surveys to determine competitive compensation. a new website, insert the costs for building, hosting, domain name, e-mail set up and project management for website development. This model assumes a site with 6 to 8 pages with a link to a secure patient portal. If a website already exists, calculate the annual cost for hosting and domain name, and the annual cost for updating a service such as Expression Engine, a tool that let’s you update your own website. Patient Portal: There are two options for creating a secure patient portal that allows patients to communicate directly with your practice. The frst option is to purchase the patient portal from the same vendor from which you purchase your EHR. This is the preferable option because the portal will be integrated with the EHR, and information can easily move from one to the other. A second option is to purchase a portal that is not integrated with the EHR from a company that develops the portal. other exPenSeS: Some practices ofer employee bonuses and tuition support. Add those amounts here if you ofer them. PhySiCian Monthly Draw: Don’t forget to pay yourself. Calculate your monthly and annual pay. Medical econoMics ❚ December 25, 2014 ES539172_ME122514_035.pgs 12.03.2014 03:35 35 ADV Business planning Strategic business planning has great long-term value. After it’s done, a practice can use it as the benchmark against which to measure progress in achieving agreed-upon goals. 34 opportunities, and ways to get where you want to go. Two barriers that often impede progress are lack of staf time for a project or lack of internal skill to do something that’s not been done before. legal issues: What corporate structure does the practice have? What structure should it have? time frame: What services will you provide at the outset and over time as you grow the practice? Who should be involved? We recommend both strong internal involvement and external facilitation by an experienced professional. Internally, greater involvement by owners, senior managers, and other workforce members bodes well for reaching consensus. External facilitation has many advantages over internal facilitation. In any practice there are likely to be diferences of opinion, and someone outside the organization with no personal stake in the outcome can best guide the discussion. An experienced external facilitator can also bring to the process lessons learned from other similar engagements. hiring a planning consultant Begin by clarifying the scope of the consulting engagement. What will you do, what will the consultant do, and what will you do together? Next, work with the consultant to develop a standard list of questions to ask of key individuals in face-to-face or telephone interviews. Make a list of important data that needs to be gathered. Following the interviews and information gathering, have the consultant aggregate the responses to the questions, maintaining confdentiality so no opinion can be attributed to a specifc individual. Schedule an of-site strategic planning retreat (either a half day or full day.) Following the retreat, have the consultant summarize the results for the practice both in writing and in a face-to-face meeting. Agree on a plan to move ahead, making sure to delegate responsibilities to specifc individuals and setting reasonable timelines. 36 Medical econoMics ❚ December 25, 2014 magenta cyan yellow black cost considerations Te cost for externally facilitated strategic business planning depends on the size of the practice and the number of people who will participate in the process. For example, we spent many more hours working with an eight-physician cardiology practice that was considering whether to sell itself to a healthcare system than we did with a four-person internal medicine practice wrestling with ways to improve access to patient care. Te more important question about cost is, what’s the cost of not engaging in strategic business planning? In the long run, it might be far more than what you would pay for strategic planning. a planning scenario We help to start new practices or assess the feasibility of introducing a new program or process into an existing practice. Te strategic business planning process is the same in both situations, except for the fact that with start-ups, we’re generally dealing with an individual, not a team of clinical and administrative people. We strongly advise starting with a vision, not with numbers. After you know what you want to do and how you want to do it, add dollar amounts. If the fnancials look unreasonable, revisit your vision, adjust the numbers, and reiterate the process until you are satisfed with the result. If we were helping a physician create a strategic business plan for a new or existing practice, we would ask the questions found on the accompanying expenses and revenue worksheets, or request specifc information. Everyone’s outcome is diferent. Some physicians look at the strategic business plan and move ahead. Physicians that need a bank loan take the plan to various lenders. Others decide that the plan and supporting fnancials are not sustainable. While the accompanying scenario is presented as a new practice, existing physician practices will encounter similar issues and should explore these questions if they want to develop a new vision for their practice. Margie Satinsky, MBA, is president of Satinsky Consulting, LLC, a practice management consulting frm based in Durham, North Carolina. MedicalEconomics. com ES539173_ME122514_036.pgs 12.03.2014 03:35 ADV FOR FREQUENT HEARTBURN Take OTC acid control to the Nexium Level and help your patients celebrate the holidays without hesitation Give patients stronger, longer acid control vs. omeprazole 20 mg (equivalent to Prilosec OTC *) † ® 1 Get samples and resources at OTCNexium24HR.com *Prilosec OTC contains the active ingredient omeprazole magnesium 20.6 mg, equivalent to omeprazole 20 mg, used in this study. †Acid control (pH >4) does not imply symptom relief. The correlation of pH data to clinical outcome has not been directly established. Reference: 1. Lind T, Rydberg L, Kylebäck A, et al. Esomeprazole provides improved acid control vs. omeprazole in patients with symptoms of gastro-oesophageal reflux disease. Aliment Pharmacol Ther. 2000;14:861-867. Consumer Healthcare © 2014 Pfizer Inc. NXM0914209 09/14 OTCNexium24HR.com All brands are the property of their respective owners. ©2014 Pfizer Consumer Healthcare 03/14 NXM0XXXXX HCP.Nexium24HR.com All brands are the property of their respective owners. magenta cyan yellow black ES539664_ME122514_037_FP.pgs 12.03.2014 23:20 ADV C o d i n g an d b i lli n g advi C e f r o m th e e x p e rts Coding Insights It’s Worth the effort: BIllIng for transItIonal Care management Q Can you give us more information about transitional care management (TCM) codes? We know they reimburse at a high rate and would like to set up a process in our practice to use these codes. A: In 2013, the Centers for Medicare and Medicaid Services (CMS) estimated that two-thirds of all hospital discharges would be eligible for Transitional Care Management (TCM) services. Additionally, CMS estimated that TCM reimbursements would generate a 4% increase in payments to family practice physicians, 3% each for internal medicine and pediatrics, and 2% each for gerontologists, nurse practitioners and physician assistants. Why is CMS willing to allot this much money for TCM services? To increase the quality of patient care and reduce hospital re-admissions. TCM codes 99495 and 99496 are used to report physician or qualifed non-physician practitioner care management services for a patient following the 38 patient’s discharge from: ❚ an inpatient hospital, ❚ partial hospital, ❚ observation status in a hospital, ❚ skilled nursing facility/ nursing facility, or ❚ community mental health center to the patient’s community healthcare setting, including: ❚ ❚ ❚ ❚ home, domiciliary, rest home, or assisted living. TCM codes do not apply to patients who have only been seen in the emergency department. Documentation and other rules Requirements for billing TCM codes 99495 and 99496 include: ❚ the services are Medical econoMics ❚ December 25, 2014 magenta cyan yellow black performed during the frst 30 days of the benefciary’s transition to the community setting following particular kinds of discharges; ❚ the healthcare provider accepts responsibility for the benefciary’s care post-discharge from the facility setting without a gap; and ❚ the (new or established) patient has medical and/ or psychosocial problems that require moderate or high complexity medical decision-making. Documentation must include: ❚ date of initial discharge; ❚ date of post-discharge communication with patient or caregiver; ❚ date of the frst face-toface visit; ❚ medication reconciliation; and ❚ complexity of medical decision-making (moderate or high) The TCM service period begins on the day of discharge and continues for the next 29 days. The reported date of service should be the 30th day. The only codes bundled with TCM codes are care plan oversight services (CPT codes G0181 and G0182), and end-stage renal disease services (CPT codes 9095190970). Additional services provided during the 30-day period (i.e., diagnostic tests, evaluation and management [e/m]services following the initial visit) can be billed separately. The place of service reported on the claim should correspond to the place of service of the required face-to-face visit. Medicare encourages practitioners to follow Current Procedural Terminology (CPT) guidelines when reporting TCM services. Medicare also requires that when a practitioner bills Medicare for services and supplies commonly furnished in physician ofces, the practitioner must meet the “incident to” requirements MedicalEconomics. com ES538925_ME122514_038.pgs 12.03.2014 01:37 ADV C o d i n g an d b i lli n g advi C e f r o m th e e x p e rts Coding Insights described in Chapter 15, Section 60 of the Beneft Policy Manual 100-02. It is important to emphasize that non-faceto-face services may be provided by licensed clinical staff members (i.e., an RN, LPN, CRN, but not an MA.) Such services include: ❚ communication with patient, family, guardian, caretaker, and/or other professionals; ❚ communication with home health agencies and other community services used by the patient; ❚ patient and/or family/caretaker education to support self-management, independent living, and activities of daily living; ❚ assessment and support for treatment regimen adherence and medication management; ❚ identifcation of available community and health resources; and/or ❚ facilitating access to care and services needed by the patient and/or family Medicare will pay only the frst eligible claim submitted during the 30-day period beginning with the day of discharge. Other practitioners may continue reporting other reasonable and necessary services, including other E/M services, provided to MedicalEconomics. com magenta cyan yellow black WHY IS CMS WILLING TO ALLOT MONEY FOR TCM SERVICES? TO INCREASE THE QUALITY OF PATIENT CARE AND REDUCE HOSPITAL READMISSIONS. benefciaries during those 30 days. If the patient is readmitted during the 30day period, TCM services can still be reported as long as the services described by the code are furnished by the practitioner during the 30-day period, including the time following the second discharge. Alternatively, the practitioner can bill for TCM services following the second discharge or a full 30-day period as long as no other provider bills the service for the frst discharge. CPT guidance for TCM services states that only one individual may report TCM services and only once per patient within 30 days of discharge. Another TCM may not be reported by the same individual or group for any subsequent discharge(s) within 30 days. Because the TCM codes describe 30 days of care, if the benefciary dies prior to the 30th day, practitioners should not report TCM services but may report any face-toface visits that occurred using the appropriate E/M service code. While Federally Qualifed Health Centers (FQHC) and Rural Health Centers (RHC) are not paid separately by Medicare under the Physician Fee Schedule, the face-to-face visit component of TCM services could qualify as a billable visit in a FQHC or RHC. Additionally, physicians or other qualifed providers who have a fee-for-service practice separate from the RHC or FQHC may bill the TCM codes, subject to the other requirements for billing under Medicare’s fee schedule. While commercial payers are still catching up in paying these codes, Medicare’s reimbursement makes it worth the time to establish a process for billing TCM codes. Requirements for 99495 TCM service Proper billing for TCM services using the 99495 code must include: ❚ communication (direct contact, phone, or electronic) with the patient and/or caregiver within 2 business days of discharge; ❚ a face-to-face visit within 14 calendar days of discharge; and ❚ medical decisionmaking of at least moderate complexity during the service period. Requirements for 99496 TCM service Proper billing for TCM services using the 99496 code must include: ❚ communication (direct contact, telephone, or electronic) with the patient and/or caregiver within 2 business days of discharge; ❚ a face-to-face visit within 7 calendar days of discharge; and ❚ medical decisionmaking of at least high complexity during the service period. The answer to the reader’s question was provided by Renee Dowling, a billing and coding consultant with VEI Consulting in Indianapolis, Indiana. Send your coding and billing questions to [email protected]. Medical econoMics ❚ December 25, 2014 ES538922_ME122514_039.pgs 12.03.2014 01:37 39 ADV Icd-10 costs: Are they overblown? In Depth A new analysis suggests the costs of the transition are not as high as previously thought [49] The future of malpractice reform Is tort reform capable of achieving gains for physicians when it comes to medical liability? The jury is out by Scott Baltic Contributing editor HIGHLIGHTS 01 Earlier this year the American College of Physicians released a detailed position paper on malpractice reform that revisits many old ideas, according to some experts who follow reform efforts. 02 While malpractice reform has stalled at the federal level, many states are exploring reform options. Beyond specifc recommendations, proposals and legislation for fxing the nation’s medical liability issues, there seems to be a growing sense—and mounting evidence— that “tort reform,” broadly construed, may not be efective at accomplishing what it’s supposed to. So where does that leave reformers and physicians? MAlprActIce reforMers have pursued many strategies in an attempt to rein in the nation’s malpractice costs and craft a system that benefts physicians, patients and the healthcare system as a whole. A growing body of evidence suggests that many “tort reform” eforts simply don’t accomplish what they’re intended to. In fact, earlier this year the American College of Physicians (ACP) released a detailed position paper on malpractice reform that revisits many old ideas, according to some experts who follow reform eforts. “It’s 40 Medical econoMics ❚ December 25, 2014 magenta cyan yellow black a pretty standard list of tort reform proposals,” says David Orentlicher, J.D., codirector of the Hall Center for Law and Health at the Indiana University McKinney School of Law. Another malpractice expert goes further. “Tere’s nothing new here. Some of this stuf is literally decades old,” says Keith Hebeisen, J.D., former chairman of the American Bar Association’s Standing Committee on Medical Professional Liability. Even the “newer” reforms on the ACP’s list typically are at least 10 years old, though Continued on page 41 MedicalEconomics. com ES539190_ME122514_040.pgs 12.03.2014 04:49 ADV Malpractice reform Continued from page 40 some, such as safe harbors, have not been tried much in the United States, says Allen Kachalia, J.D., associate professor at the Harvard School of Public Health. PaTienT safeTy In its frst recommendation, the ACP paper nods to quality control, then switches to “We should make it harder to sue doctors,” followed by suggestions how, says Bernard S. Black, J.D., of Northwestern University’s School of Law and Kellogg School of Management. “We don’t learn from our mistakes,” he says. “We need incentives for safety that are stronger than what we have now.” For example, Black suggests, if a hospital makes a mistake, it should have to fx it at no cost to the patient. As things stand now, he says, “Hospitals get paid more if patients get complications.” Orentlicher agrees with the paper’s emphasis on patient safety, but adds, “Te medical profession hasn’t done enough to police itself.” On a more positive note, both men like the ABIM Foundation’s Choosing Wisely campaign that aims to help patients choose care that is supported by evidence, does not duplicate other tests or procedures, is free from harm and is truly necessary. Damage caPs Caps on malpractice damages, particularly those on non-economic damages, are a staple of malpractice reform eforts and still get a lot of attention, says Kachalia, but there’s a broad feeling that they can be unfair to patients. Caps don’t necessarily get at the core issues, he says, which include the realities that injured patients often don’t sue and that injured patients can nonetheless lose suits. “Caps on non-economic damages can prevent full restitution to the patient,” adds Orentlicher, because of the customary onethird cut for the plaintif ’s legal fees. Moving beyond caps, Orentlicher likes the periodic-payments idea, because a lump sum can under- or over-estimate the patient’s needs. “Tat strikes me as reasonable,” he says. In addition, he says a sliding scale for attorneys fees “makes sense,” though it would make fnding an attorney more difcult for some patients. Orentlicher cites a recent MedicalEconomics. com magenta cyan yellow black Wall Street Journal article that identifed a threshold of about $100,000 for being able to engage an attorney. He’s concerned that mandating the disclosure of collateral-source payments, such as those from health insurers, might undermine the “deterrence signal” to physicians. The American College of Physicians position paper on malpractice reform recommends: communicaTe anD Disclose 1/ Improving patient safety Te position paper’s Recommendation 5 is an important one, because communication and disclosure “gets away from the whole deny-and-defend attitude...It benefts the patient to have an honest conversation, and it’s the ethical thing to do,” says Ryan Crowley, senior associate for health policy at the ACP and the position paper’s author. He suggests also that the growth of teambased care might help push communications and disclosure as an approach for preempting litigation. In 2012, Massachusetts enacted a law to facilitate a “Disclosure, Apology, and Ofer” approach to medical malpractice claims. It provides for a six-month cooling-of period before litigation begins, allowing time to go through a DA&O process, which would feature sharing of all pertinent medical records and full disclosure by providers. Statements of apology by providers would be inadmissible in court. Te Massachusetts Medical Society, Massachusetts Bar Association and Massachusetts Academy of Trial Attorneys all agreed on the bill’s language. and preventing medical errors, including the use of riskmanagement programs in all healthcare institutions and reviews of physicians’ malpractice and professional disciplinary records, with disciplinary actions taken against reckless or incompetent physicians. 2/ Passage of a comprehensive tort reform package, including caps on non-economic damages, preferably at the national level. Included in this are periodic (rather than lump-sum) payment of damages, collateral-source disclosure and ofsets, a sliding scale for attorney’s fees and limits on punitive damages. 3/ Pilot-testing, and if warranted, expanding communication and resolution (a/k/a early disclosure and apology) programs that should include legal protections making apologies by healthcare professionals inadmissible in court. safe harbors 4/ Developing safe harbor Te idea of gaining some liability protection from following evidence-based guidelines is an appealing one, but Hebeisen sees an obstacle to their general acceptance: Most medical societies don’t want their practice guidelines used as standards of care. More broadly, Hebeisen notes, medical societies want guidelines to protect doctors, but don’t want them used against doctors (as in the ACP position paper). It’s the lack of balance that especially frustrates him: “Every safe harbor proposal I’ve seen has been one-way,” he says. protections when physicians, under specifed conditions, provide care consistent with evidence-based guidelines developed by medical experts organized under a qualifed entity, such as the Institute of Medicine. The ACP also recommends that a physician not be held culpable in court if he or she, in applying their best professional judgment, did not follow such guidelines. healTh courTs anD acms Health courts are another proposal for malpractice reform, and have the advantage of having been tried outside the country. Administrative compensation models 5/ Expanded testing of health courts and administrative compensation systems, which are starting to build a successful record in some other countries. Medical econoMics ❚ December 25, 2014 ES539192_ME122514_041.pgs 12.03.2014 04:49 41 ADV Malpractice reform difer from judge-directed health courts in that claims decisions are made outside of court by an administrative agency. ACMs are currently in use in Sweden (which also has no-fault health courts), Denmark and New Zealand. All three reportedly apply collateral-source ofset rules. Crowley highlights the diference be- tween the negligence standard currently used in malpractice litigation and the avoidability standard often used in health courts and ACMs. Te ACP position paper quotes “Administrative Compensation for Medical Injuries: Lessons from Tree Foreign Systems,” a report published by Te Commonwealth Fund Myths and truths about Medical Malpractice In 2013, David A. Hyman, M.D., J.D., of the University of Illinois, and Charles Silver, J.D., of the University of Texas at Austin, published an article in Chest titled “Five Myths of Medical Malpractice.” The piece is a useful overview of common misperceptions and evidence-supported truths about medical malpractice. Myths myth #1: Malpractice crises are caused by sudden rises in payouts and claim frequency. The evidence: Most payments to plaintifs result from voluntary settlements, not from highly publicized “jaw-dropping” awards to patients with questionable claims. Further, Hyman and Silver wrote, “the only malpractice crisis for which high-quality data are available was not caused by spikes in malpractice litigation.” myth #2: The tort system “doles out compensation randomly.” The evidence: Although “the liability system is simultaneously beset by over-claiming and under-claiming,” the authors conclude, it “does much better than conventional wisdom suggests; it sorts the wheat from the chaf reasonably well…. patients treated negligently recover damages far more often than patients who were treated non-negligently.” myth #3: Physicians are just one malpractice verdict away from bankruptcy. The evidence: Jury trials are uncommon, plaintif victories are even less common and even patients who win often receive awards that do not cover their actual losses. Further, “Out-of-pocket payments by physicians were extraordinarily rare, particularly when physicians had policy limits of [at least] $500,000. One might say, with only the slightest exaggeration, that physicians have efectively no personal [fnancial] exposure on malpractice claims.” myth #4: Tort reform will lower healthcare spending dramatically. The evidence: “… the direct costs of the malpractice system are relatively modest,” about 2% of healthcare spending, and numerous studies have found either mixed results or only modest declines in healthcare spending from malpractice reform. truths 42 Truth #1: The malpractice system is slow, taking on average about two years between an injury and the time a lawsuit is fled and roughly the same amount of time again for the case to be settled. This time frame means, as Hyman and Silver point out, it’s “unrealistic to expect the malpractice system to provide much in the way of useful feedback ... .” Truth #3: The malpractice system is broadly perceived as Truth #2: The system is extremely expensive. Earlier research by these authors found that “the cost of defending paid medical malpractice claims has roughly doubled since 1988 and was about 20% of the amount paid to the plaintif ... .” Truth #4: Damages caps “do little to improve the malpractice system.” Although caps can dramatically reduce claims, payouts, or insurance premiums, they “do not make health-care safer, reduce health-care spending, compensate those who are negligently injured, or make the liability system work better.” Medical econoMics ❚ December 25, 2014 magenta cyan yellow black “unpleasant and often unjust or unfair.” Providers who were not negligent resent being dragged into lawsuits ... .” Patients who were injured are usually unable to fnd out what happened to them unless they fnd a lawyer, and must wait several years for the process to complete. MedicalEconomics. com ES539191_ME122514_042.pgs 12.03.2014 04:49 ADV Malpractice reform in 2011: “Replacing the negligence standard with a more liberal, less stigmatizing compensation standard, such as avoidability, reaps multiple benefts. In addition to easing injured patients’ access to compensation for preventable injuries, it preserves physicianpatient relationships, encourages transparency about adverse events, and fosters physi- cian participation in the claims process.” Tis proposal also lacks balance, says Hebeisen, who uses the analogy of workers’ compensation. When workers’ comp was adopted, a guarantee of (at least limited) recovery by an injured worker was traded of against the loss of the right to sue the employer. NH WA state efforts at Malpractice reforM MT OR ID WY Below is a list of recent efforts in which the American Medical Association has worked with state medical societies in support of malpractice reform efforts. NV VT ND CA AZ MA WI SD IA IL CO NY MI NE UT KS IN OH WV TN VA NC SC AR MS AL TX PA KY MO OK NM ME MN GA RI CT NJ DE MD DC LA FL AK HI california In November, voters defeated Proposition 46, which would have raised a cap on medical malpractice awards. CA Kentucky KY Maryland connecticut A bill that would have weakened the certifcateof-merit statute died. (The statute essentially requires a patient’s attorney to obtain a written opinion from an expert stating that there appears to be evidence of negligence.) CT The state medical association and the AMA supported legislation that would have established a pretrial screening panel. The bill stalled in committee. MD As in previous years, the AMA worked with the state medical association to block legislation that would have tripled the cap on noneconomic damages. Missouri florida FL The AMA and the Florida Medical Association worked on a bill to strengthen expert witness standards. The bill passed. idaho and Oklahoma in 2014 adopted AMA model legislation designed to protect the standard of care. Similar legislation in Mississippi was unsuccessful. The AMA model legislation, the Standard of Care Protection Act, is intended to ensure that practice standards or guidelines under Medicare, Medicaid and the Afordable Care Act can’t be misconstrued to create new causes of legal action against physicians. ID MO oklahoma OK IA MedicalEconomics. com magenta cyan yellow black A special legislative session in 2013 passed 23 pieces of tort reform legislation, including an afdavit-of-merit requirement, expert testimony standards, and emergency and volunteer liability protections. The session was called after a 2009 tort reform law was ruled unconstitutional by the Oklahoma Supreme Court for violating the “single subject” rule. pennsylvania iowa An Iowa Medical Society task force is in talks with medical professional liability insurers and trial lawyers regarding early-disclosure legislation. The state medical association and the AMA supported legislation to reinstate a cap on non-economic damages that the state Supreme Court had struck down a few years previously, but the new bill failed. PA The Pennsylvania Medical Society and the AMA supported successful legislation to make apologies by physicians inadmissible in any subsequent litigation. Medical econoMics ❚ December 25, 2014 ES539194_ME122514_043.pgs 12.03.2014 04:49 43 ADV Malpractice reform In contrast, Hebeisen says, health courts would limit only the plaintifs. ACMs or health courts also raise constitutional concerns about the right to trial, says Kachalia, though they could be constitutional if structured properly. As to the likelihood of health courts and ACMs being used here, Crowley concedes that they’re “a pretty drastic departure from the way things are done now.” limiTeD success Beyond all of the specifc recommendations, proposals and legislation, there seems to be a growing sense that “tort reform,” broadly and perhaps vaguely construed, may not accomplish what it’s supposed to. “A lot of these reforms don’t have the desired impact,” says Orentlicher. First, some eforts at the state level have been invalidated by state supreme courts over constitutional issues. For example, some state supreme courts have struck down damages caps, says Orentlicher. Nine states adopted non-economic damages caps in 2002 to 2005 and in two states these were overturned by courts, according to Black. No federal cases have ever challenged caps on damages, Hebeisen says, because they have usually been struck down by courts at the state level. As a rule, he says, “Anything that takes anything away from juries gets shot down.” A paper that Black and coauthors published on the Social Science Research Network (SSRN) in 2013 reported that the perphysician rate of paid medical malpractice claims has been dropping for 20 years, and in 2012 was less than half of the 1992 level. Tough the wave of damage cap adoptions contributed to this, the researchers noted that “there are also large declines in no-cap states.” Some advocates have focused on the hope that malpractice reform could help a state improve its supply of physicians. However, another paper that Black coauthored, published in February on SSRN, found that in Texas, “Physician supply was not measurably stunted prior to reform, and it did not measurably improve after reform. Tis is true for all patient care physicians in Texas, high-malpractice-risk specialties, primary care physicians, and rural physicians.” Finally, Black notes that while other studies have found no connection between tort reform and mortality, he and Northwestern 44 Medical econoMics ❚ December 25, 2014 magenta cyan yellow black University economist Zenon Zabinski, Ph.D., used measures of adverse events developed by the Agency for Healthcare Research and Quality to examine whether malpractice reforms afect in-patient safety. With analyses of fve states that adopted caps on noneconomic damages from 2003 to 2005, Black and Zabinski found “consistent evidence that patient safety generally falls after the reforms, compared to control states.” Black summarizes the fndings for Medical Economics as: “Bad things in hospitals go up, but they aren’t bad enough to kill you.” Perhaps following tort reform, he says, “You do fewer defensive things, but more riskybut-proftable things.” once more inTo The breach Tough Crowley predicts that “tort reform at the federal level isn’t going to happen any time soon,” eforts have not stopped. He and Kachalia point to H.R. 4106, the Saving Lives, Saving Costs Act that was introduced in February, 2014. Te bill would: ❚ establish “a framework for health care liability lawsuits to undergo review by independent medical review panels if providers allege adherence to applicable clinical practice guidelines,” ❚ require HHS to publish clinical practice guidelines provided by national or state medical societies or medical specialty societies designated by the Secretary and to set up standards for the development of such guidelines, and ❚ require an independent medical review if eligible medical professionals assert that they adhered to applicable clinical practice guidelines and establish procedures for the use of such a panel’s fndings at trial. Te bill was referred to the House Subcommittee on the Constitution and Civil Justice. Whether at the state or federal level, something does need to be done. “It’s pretty clear that the current system doesn’t work for the patients or the doctors,” says Kachalia. Any new system, he says, has to compensate patients and take pressure of physicians, whose concerns about being sued are more psychological, emotional and professional than fnancial. Black puts it this way: “Let’s replace medical malpractice with something better, not with something less.” MedicalEconomics. com ES539193_ME122514_044.pgs 12.03.2014 04:49 ADV P r o d u c t s & S e r v i c e s SHOWCASE FINANCIAL ADVISERS FOR DOCTORS ★ Those companies listed in Medical Economics 2012 Best Financial Advisers for Doctors display this symbol in their ads. Best Financial Advisers for Doctors FLORIDA Advertise today: Patrick Carmody • Healthcare Marketing Advisor [email protected] • 1.800.225.4569, ext.2621 Your connection to the healthcare industry’s best financial resources begins here. 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Contact: Tod McCloskey at 800.225.4569 x 2739 • [email protected] 46 MEDICAL ECONOMICS ❚ DECEMBER 25, 2014 magenta cyan yellow black MedicalEconomics. com ES539385_ME122514_046_CL.pgs 12.03.2014 20:40 ADV M A R K ET PL AC E RECRUITMENT N AT I O N A L REST ASSURED WE WORK NIGHTS SO YOU DON’T HAVE TO Our night and weekend call coverage increases your daytime productivity and turns one of your most vexing problems into a profitable advantage. We offer coverage for primary care and nearly all medical subspecialties. Physician-owned and operated, Moonlighting Solutions is a system you can tailor for only a few shifts per month or seven nights a week. We provide US-trained, board-certified physicians. We are not locum tenens or a physician recruitment firm. Credentialing services are offered and medical malpractice coverage (with full tail) is available at discounted group rates. 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Post a job today www.modernmedicine.com/physician-careers Joanna Shippoli RECRUITMENT MARKETING ADVISOR (800) 225-4569, ext. 2615 [email protected] 48 MEDICAL ECONOMICS ❚ DECEMBER 25, 2014 MedicalEconomics. com Th e b r i d g e b eTwe e n po li cy an d h ealTh car e d e live ry The Last Word Are ICD-10 ConversIon Cost estImAtes overblow? by J e ffr ey B e n d ix Senior Editor A new study is challenging the conventional belief that the costs of converting to the International Classifcation of Diseases-10th revision (ICD-10) code set will be prohibitive for small medical practices. The STudy, published in the November issue of the Journal of the American Health Information Management Association (AHIMA) puts ICD-10 conversion costs for a threephysician practice in the range of $1,960 to $5,900. That contrasts with a widely quoted study prepared for the American Medical Association (AMA)—written in 2008 and updated earlier this year— concluding that smallpractice conversion costs will range from $22,500 to $105,500. Stanley Nachimson, principal of Nachimson Advisors, LLC, and author of the AMA study, stands by his estimates, saying “I didn’t see anything in the AHIMA article that would cause me to question the costs predicted in my study.” The authors of the AHIMA study say their estimates are lower than those in the AMA study MedicalEconomics. com magenta cyan yellow black “as a result of readily available free and low-cost solutions ofered by coding, education and software vendors.” Their fndings are based on survey results, published results, and hospitals’ and physicians’ conversion experiences, they write. In the area of ICD-10 training, they cite the availability of online documentation and coding training for three hours of clinician training at a cost of $50 to $300, and for staf from $350 to $700. They note that the ICD-10 Diagnoses Code Book can be downloaded for free or purchased from publishers for no more than $300. In terms of upgrading software, the authors say many small practices are relying on their electronic health record (EHR) vendors, billing services, and clearinghouses to absorb the costs. “Physician ofce costs are “I dIdn’t see anythIng In the ahIMa artIcle that would cause Me to questIon the costs predIcted In My study.” —stanley nachIMson, prIncIpal, nachIMson advIsors, lcc not expected to change for basic software services and as a result software conversion costs are estimated to be zero for small practices,” they say. They also discount claims that small practices will have to undergo extensive end-to-end testing, because that responsibility lies with billing, EHR, and clearinghouse vendors, they say. Nachimson notes that the AMA has long opposed ICD-10 conversion, while AHIMA has supported it. He says he “strongly disagrees” with many of the assumptions underlying the ICD-10 study. In the area of training, for example, just having printed materials is not enough. “I can give you a French dictionary, but that doesn’t make you fuent in French,” he says. “You need to learn the rules around using the words. It’s the same with having a code book. You need to learn the rules around using the codes. “As a physician practice, you can chose to go through your ICD-10 implementation process any way you want,” he adds. “MY study measured the cost of an implementation meant to minimize the risks of moving from ICD-9 to ICD-10 and make sure physicians were prepared to use ICD-10 codes and get paid. If physicians choose not to take those steps their costs will be less, but the risks increase, I would say considerably.” Medical econoMics ❚ December 25, 2014 ES538524_ME122514_049.pgs 12.02.2014 21:42 49 ADV Advertisement not available for this issue Advertisement notdigital available for this issue of the edition of the digital edition www.medicaleconomics.com/resourcecenterindex MedicalEconomics.com Facebook Twitter www.MedicalEconomics.com/HIMSS2012 www.MedicalEconomics.com/ACA MedicalEconomics.com Facebook Twitter See medicaleconomics.modernmedicine.com/himss2012 resource centers related to our Business of Health series You’ve gotYquestions about the Affordable ou've got technology questions. Care Act. as well as topics such as Patient-Centered Medical Homes, accountable We’ve got answers. answers. We've got care organizations, and our EHR Best Practices Study at the above link.
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