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Emerging Trends in Gastroenterology Reimbursement Lower Payments, Larger Health Care Organizations Likely To Come

Posted by Jessica Hartman DeVore on Tue, Nov 08, 2011 @10:24 AM

Chicago—As the effects of the Affordable Care Act begin to take shape, it’s clear that physicians will experience a different future regarding reimbursement. In particular, gastroenterologists can expect shared savings programs, bundled payments and re-valued gastrointestinal (GI) procedural codes to directly impact their pay in the years to come, according to economic and policy experts.

The Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) are responsible for implementing the new rules and programs. For example, in April, CMS proposed to create accountable care organizations (ACOs), which are groups of coordinated health care providers that agree to be accountable for the overall cost and care of a Medicare patient population and that are willing to tie their reimbursement to quality improvements that reduce overall costs.

Likewise in May, CMS announced its final rule on implementing the Hospital Inpatient Value-Based Purchasing program, which will use a “mix of standards, process, outcomes, and patient experience measures” to score hospitals “on their overall achievement relative to national or other appropriate benchmarks.” The agency said it “will make value-based incentive payments to acute care hospitals, based either on how well the hospitals perform on certain quality measures” or on how much the hospitals’ performance improves after a baseline period. Eventually, the program will likely extend to the level of the individual physician. The HHS stated that the scoring program may be used by “consumers … to make meaningful distinctions among providers’ performance.”

Health Care Market Realignment

By tying reimbursement to quality metrics, the new programs will create newer, larger health care entities and a shift from fee-for-service to flat payments to physicians.

“The Affordable Care Act is trying to bring back risk for what we do and for whom we are accountable to,” said Lawrence Kosinski, MD, MBA, a managing partner of the Illinois Gastroenterology Group, in Elgin, and chair of the American Gastroenterological Association Institute’s Practice Management and Economics Committee.

One response to these developing changes has been to pool the new risk. “From a macro point of view, the provider side is aggregating. You see hospitals aggregating, you see physician groups aggregating, and you see hospital and physician groups [integrating]. Why are they doing this? To get large enough to handle the risk of a population of people,” said Dr. Kosinski.

These seismic shifts are integrating physician groups on a smaller scale, and health care organizations and ACOs on a larger scale. Dr. Kosinski recently merged his practice with two other Chicago-area gastroenterology practices, and now has added a fourth to compete on a regional level and control costs.

On the grander scale, hospital systems are purchasing physician practices.

“Gastroenterology is becoming an employed specialty,” said Joel Brill, MD, the chief medical officer of Predictive Health, in Phoenix, and former chair of the AGA’s Practice Management and Economics Committee. “With one in five gastroenterologists already in employed settings, the number will continue to grow.”

Dr. Kosinski added, “Physicians will not be on fee-for-service; rather, they will have fixed incomes with performance bonuses based on balanced scorecards.”

A recent survey by the Medical Group Management Association shows a nearly 75% increase in the number of physicians employed by hospitals since 2000. Hospital-owned physician practices now outnumber those owned by physicians themselves.

In May, Robert Kocher, MD, former special assistant to President Obama for health care, laid out the reason in an editorial in The New England Journal of Medicine. In addition to primary care physicians, hospitals are now aggressively targeting specialists in order to create “what could effectively become closed, integrated health care delivery systems.” These larger systems not only control pricing power—a Virginia hospital system reportedly charged four to 10 times as much for a colonoscopy as providers in similar, separate markets—but they can also “reduce excess costs associated with unnecessary practice variation.”

Or as Dr. Brill puts it: “He who writes your check will decide what you do.” The big question in this scenario is not whether screening colonoscopy is reimbursed at $1,200 or $2,500, but whether the procedure needs to be done at all, he said. If hospitals employ both primary care and specialist physicians, hospitals effectively control primary care referral patterns for all GI services, which could impact gastroenterologists regardless of whether they spend their time performing office consultations or procedures.

Bundled Payments

In addition to encouraging salaried employment from hospitals and promoting joint ventures between a gastroenterologist and a local hospital, the health reform act will alter GI physicians’ reimbursement by establishing a bundled payment program through Medicare. The program will set a flat fee for “an episode of care,” only for those events requiring hospitalization.

Because screening colonoscopy, for example, is primarily a diagnostic procedure, the bundled payment system will likely not be as complicated for gastroenterologists as it could be for physicians managing chronic conditions in a fixed-fee system. However, physicians with ambulatory surgery centers will have to scrutinize their practice to see where they can increase savings.

“A lot of what gastroenterologists do today are services that are diagnostic and therapeutic as opposed to [those that manage] chronic conditions,” said Dr. Brill. “Where bundled payments could possibly impact us is that if you perform a colonoscopy and have a complication, such as a bleed or the patient has to be brought back because of a poor prep, this could affect what you and the facility get paid for the second procedure. Then you’ve got to figure out how you’re going to spend your money.”

“Right now, if we do a screening colonoscopy and find a polyp, there is no control over when the patient returns for a surveillance colonoscopy,” said Dr. Kosinski. “We may bring them back in three years even if it is not appropriate according to guidelines. What’s coming and what I’ve seen is that the payers are going to give physicians something like a gift card—you’ve got $1,500 for your screening colonoscopy—and the GIs are going to say, ‘Maybe I can use conscious sedation, maybe I don’t want that anesthesia expense,’ and hold on to as much of that dollar as they can. When we get down to the nitty gritty, you will have screening and surveillance done at a fixed cost for the package of the procedure.”

Procedure Reimbursement

By far the most significant effect of health care reform will be on procedure reimbursement, both facility and professional fees. Four years ago, CMS began to phase in a new ASC fee schedule as the result of a Congressional mandate that the schedules should align with payments to hospital outpatient departments. However, the mandate stipulated that the changes in spending across ASCs remain budget-neutral, with the result that ASC fees for GI services fell approximately 25%, said Glenn Littenberg, MD, the managing partner of Gastroenterology Associates, in Pasadena, Calif., and chair of the American Society for Gastrointestinal Endoscopy’s (ASGE) Practice Management Committee.

“One of the big issues is the trend in [ASC] reimbursement for GI endoscopy, which is really a continuation of the trend that began a few years ago,” said Dr. Littenberg, who is also currently the ASGE’s adviser to the American Medical Association (AMA) Current Procedural Terminology editorial panel. “Reimbursement for the facility side from Medicare for screening colonoscopy has now fallen to about or below the level at which the services can be provided. While CMS wants to have effective care delivered in quality facilities and to improve rates of screening for colorectal cancer, its payment policy undermines this [goal].”

The effect on professional fees reflects a change in how CMS is dealing with the recommendations of the AMA’s Relative Value Scale Update Committee (RUC), which makes annual recommendations to CMS on reimbursement rates for physician services. Every five years, the RUC also performs a broader review of the entire Resource-Based Relative Value Scale. Until this year, CMS accepted the vast majority of the RUC’s recommendations and largely left the RUC to determine which physician services to re-value. However, the Affordable Care Act specifically calls for the CMS to have greater scrutiny over reimbursement rates.

“The key thing is Section 3134, which requires the secretary [of HHS] to review and identify potentially misvalued codes,” said Dr. Brill, who is the AGA’s RUC adviser. “For years, CMS pretty much accepted what the RUC recommended—but that’s no more.”

For example, in the 2011 Physician Fee Schedule Proposed Rule, CMS specifically pointed to several GI codes that it believes are misvalued and need to be surveyed for 2011, including upper GI endoscopy diagnosis and biopsy, colonoscopy and biopsy, and colonoscopy and polypectomy.

“Medicare has challenged the GI societies to defend their reimbursement for our bread-and-butter procedures,” Dr. Brill said.

Clearly, CMS wants to be much more aggressive in how they evaluate the physician workload behind a service, said Dr. Littenberg. “We are going to be challenged to defend the values that we believe are pertinent to our services. The outcome may well be that reimbursement for services will fall, because it’s almost impossible to increase the value within a budget-neutral system that is not keeping up with inflation.”

In the future, the Affordable Care Act also calls for the creation of the Independent Payment Advisory Board (IPAB), an executive-branch agency charged specifically with reducing the Medicare growth rate. Importantly, HHS must implement the board’s proposals unless Congress adopts equally effective alternatives; the only way to avoid this would be if both houses of Congress, including a three-fifths super majority in the Senate, vote to waive the requirement. Importantly, however, the IPAB is strictly limited in what it can do to slow Medicare costs: The board cannot ration health care, raise revenues or increase Medicare beneficiary premiums, meaning that physician fees become a likely target for curbing costs.

“The way that the legislation is written, it puts physician fees very much up front in the efforts of the IPAB because they have so many restrictions on what else they can do,” said Dr. Littenberg. “It doesn’t leave much [to cut] besides durable medical equipment, pharmaceutical costs and physician services.”

Adapting to Health Care Reform

Physicians who hope to adapt to these myriad changes need to be able to prove their value and then position their practice to work with others to find savings.

In terms of collecting data, physicians have to ask, “How is this going to result in a benefit or recognition for me,” said Dr. Brill. “As a physician, you should be asking that question very critically—how are the data going to translate into an incentive? Will my fees go up? Will I get paid in a more timely manner? Will co-pays to me get reduced or disappear? Will I be freed from having to submit requests for pre-authorization?”

Whether gastroenterologists are collecting data through an electronic medical record system, an endoscopy reporting program or a registry, the data should align with the outcome measures that Medicare and payers want to see, Dr. Brill said.

Gastroenterologists also need to recognize the power structure within their community and make an effort to find partners.

“More than the government, our biggest threat is the local hospitals, who have the ability to change everyday practice a lot more than the government does,” said Dr. Kosinski. “They are forming very, very large, powerful networks and they are buying the primary care base and employing the people that send us business. So my best advice is ‘do not declare war on your hospital.’ And, do not feel like you have to sell your practice to your hospital. Look to pursue ways of being engaged with your local hospital and your local medical community. Don’t spend your entire day in your ASC. You can’t survive if you spend your life just cranking the colons. You’ve got to work with your hospital, joint-venture with them, and stay engaged with your primary care base.”


Dr. Kosinski reported no relevant financial or other commercial relationship with any manufacturer or provider of products or services relevant to this article. Dr. Littenberg reported financial or other commercial relationships with Abbott Laboratories. Dr. Brill reported financial or other commercial relationships with Avantis Medical Systems, BARRX Medical, Inc., Boston Scientific Corporation, Centocor, Inc., Early Bird Alert, Inc., EndoChoice, Inc., Given Imaging, Novartis Pharmaceuticals, Salix Pharmaceuticals, Inc., SciDose, SmartPill, Spectra Science and USGI.

 


Written By: Gabriel Miller

Tags: healthcare, ACO, healthcare suppliers, ACO Regulations, ACOs and suppliers, medical devices, Healthcare Service Provider, ACA, Afforable Care Act

Final Rules for Accoutable Care Organizations

Posted by Stan Schroeder on Tue, Oct 25, 2011 @01:35 PM

The Department of Health and Human Services (HHS) released its final rules for Accountable Care Organizations. Initial impression? Less restrictions and more flexibility for physicians and providers wishing to participate. Look for complete coverage, insight, analysis and commentary regarding the final rules in upcoming issues of ACO Insights (www.acoinsights.com). Here are some initial thoughts:  

  • The risk-reward of the final rules is much more favorable toward providers.

  • Providers will be able to participate in an ACO and the Medicare Shared Savings program without the risk of losing money with one of the tracks provided.

  • ACOs will be able to start sharing in the savings earlier.

  • The number of quality measures was reduced from 65 to 33, and five domains to four.

  • There is no EHR requirement in the final rules.

  • Participants can only be part of one ACO.

  • Beneficiaries will be assigned to an ACO based on how they utilize primary care services, but if they aren't seeing a primary care physician, then they may be assigned based off of services provided by other physician specialties. Providers will be informed which Medicare beneficiaries will likely be a part of the ACO.

Tell your colleagues to subscribe to ACO Insights for detailed features, news and opinions on accountable care (http://www.acoinsights.com/Subscribe.aspx

 

 

John Pritchard
ACO Insights
MDSI
1735 North Brown Road
Suite 140
Lawrenceville, Georgia 30043
United States
(770) 263-5261

Tags: medical, ACO, Accountable Care Organizations, healthcare suppliers, Regulations on ACOs, ACO Regulations, ACOs and suppliers, HHS Regulations, gpos, Healthcare Service Provider, GPO, Center for Medicare and Medicaid Services, Affordable Care Act

EHM continues extensive growth this summer

Posted by Frank Ripullo on Mon, Jul 25, 2011 @03:36 PM

Since 2007, EHM has served the marketing and sales support needs of clients, combining corporate account strategy and operational infrastructure. As new federal regulations continue to change the healthcare industry, EHM is growing into a thought leader and educating clients on how these changes affect their business development prospects. EHM guides clients through the contracting/sourcing process and helps companies position and present their offerings to key decision-makers and target audiences.

EHM has recently added many new clients, including Customed USA. Customed is the mainland U.S. division of Puerto Rico Hospital Supply Inc., producing medical kits and trays for virtually all hospital procedures and forms of treatment. To help healthcare providers avoid purchasing unnecessary supplies, the medical kits are customized to fit the needs of each ward or department. EHM will help Customed secure contracts with integrated delivery networks and group purchasing organizations across the United States.

This summer, EHM has added a Senior Sales VP, three Executive Directors, a new Director of Business Development and 56 trained and qualified sales professionals ready to help medical suppliers connect with key-decision makers and drive new business. The firm has the expertise to handle contracts within integrated delivery networks and group purchasing organizations. For more on how EHM is helping Customed, please read our announcement.

Tags: Essential Healthcare Management, Essential Healthcare, marketing, EHM, healthcare, healthcare suppliers, gpos, IDNs, integrated delivery networks, medical devices, Healthcare Service Provider, GPO, Customed USA, Puerto Rico Hospital Supply Inc, PRHS, medical kits, customized medical kits, sales, business growth, business development

NuBone Growing Stronger with EHM

Posted by Frank Ripullo on Thu, Jun 30, 2011 @08:31 AM

Recently, EHM was selected by medical supplier, NuBone, to launch a national contract with Premier, Inc., a prominent group purchasing organization based in Charlotte, N.C.  NuBone manufactures the groundbreaking Stemvie product line, including an innovative bone graft solution that costs only a fraction of the most popular alternatives on the market.  Stemvie products offer healthcare providers dramatic savings, without the clinical contraindications of other bone graft options.

NuBone will be offering its groundbreaking products and services to nearly 2,500 Premier acute care facilities in a competitive $1B market segment.  EHM is creating and implementing a sales infrastructure for Nubone, customized to support Premier members. The consulting firm will continue to manage corporate accounts and negotiate agreements with integrated delivery networks.  Additionally, EHM plans to schedule regular meetings and webinars with Premier members.

As new healthcare reform policies are phased in, EHM is committed to educating clients on how the new changes affect their business development prospects.  The firm is helping NuBone reach the right decision makers through unique industry insight and a strong sales infrastructure, including the addition of 56 trained and qualified sales professions.  Since the launch of the Premier agreement four months ago, EHM has used its sales expertise to negotiate several IDN agreements within Premier.

Tags: Essential Healthcare, EHM, healthcare, healthcare suppliers, IDNs, integrated delivery networks, Healthcare Service Provider, GPO, Quality, NuBone, NuBone, NuBone, Premier, Premier Inc, acute care facilities, Stemvie, Management

How Value-Based Purchasing Will Affect Healthcare Suppliers

Posted by Stan Schroeder on Wed, Jun 08, 2011 @11:15 AM

A new program mandated by the federal government is offering opportunities to healthcare suppliers that can tailor their products and services in ways that help hospitals achieve performance benchmarks in categories set by the Centers for Medicare and Medicaid Services (CMS).
 
Starting on Oct. 1, 2012, with the beginning of the 2013 fiscal year, Medicare hospitals and healthcare providers will be required to have in place value-based purchasing (VBP) programs, which will tie a portion of their Medicare payments to performance on measures related to certain conditions, such as heart attacks, heart failure and pneumonia – to name a few. Eventually, other parameters will be added to incorporate "efficiency measures, including measures of 'Medicare spending per beneficiary,'" adjusted for adjusted for age, sex, race, severity of illness and other factors.
 
VBP programs are a way for to CMS to encourage – and provide incentives to – healthcare providers to buy products that can demonstrate value by reducing costs and improving patient outcomes in areas CMS has identified for improvement. Suppliers that can develop and market products and services that meet this need can move ahead of competitors and capture larger shares of the market.
Essential Healthcare Management’s team of experts can help. They work with companies to specifically target products to Medicare hospitals and healthcare providers by devising sales and marketing strategies and by connecting them with key purchasing decision-makers.
 
To learn more, contact us.

Tags: medical, hospitals, healthcare suppliers, Healthcare Service Provider, Quality, CMS, Center for Medicare and Medicaid Services, Value-Based Purchasing, Medicare, VBP, patient satisfaction, business growth

How Will Value-Based Purchasing Affect Hospitals and Healthcare Providers?

Posted by Stan Schroeder on Fri, Jun 03, 2011 @11:53 AM

The Affordable Care Act requires Medicare hospitals and healthcare providers to have in place value-based purchasing (VBP) programs by the beginning of the 2013 fiscal year, which starts Oct. 1, 2012. The initiative is a means of encouraging providers to demonstrate “value” by reducing costs and improving patient outcomes in areas that the Centers for Medicare and Medicaid Services (CMS) have identified for improvement.
 
Inpatient acute-care hospitals that meet or exceed certain performance standards for a minimum of five measures related to the care of patients will be eligible for incentive payments, or higher Medicare payments. Initially, the program will cover the following conditions or procedures – acute myocardial infarction (heart attack), heart failure, pneumonia, certain surgeries and healthcare-associated infections. Within a year of launch, the program will expand to include “efficiency measures” that have been adjusted for age, sex, race, severity of illness, etc.
 
The value-based purchasing program initially places one percent of hospitals’ Medicare inpatient prospective payment system payments but increases this to two percent by the 2017 fiscal year. The program marks the first time hospitals will be paid for inpatient acute care services based on care quality and not just the quantity of services provided. According to the U.S. Department of Health and Human Services, it will impact more than 3,500 hospitals across the nation. It is expected that in Fiscal Year 2013, an estimated $850 million will be allocated to hospitals based on their overall performance on a set of VBP quality measures that have been shown to improve clinical processes of care and patient satisfaction.
 
Next week: How Value-Based Purchasing Will Affect Healthcare Suppliers

Tags: healthcare, medical, hospitals, Healthcare Service Provider, Quality, Center for Medicare and Medicaid Services, Value-Based Purchasing, Medicare, Affordable Care Act, VBP, patient satisfaction, business growth

What is Value-Based Purchasing?

Posted by Stan Schroeder on Wed, May 25, 2011 @11:28 AM

In January, the Centers for Medicare and Medicaid Services (CMS) proposed policies for implementing a value-based purchasing (VBP) program for Medicare hospitals in accordance with the Affordable Care Act passed by Congress in 2010. Last month, the CMS solidified the VBP program by releasing a final rule that requires performance metrics. The VPB program will go into effect beginning in fiscal year 2013.

Value-based purchasing is a new concept that focuses on increasing the value that comes from purchasing medical supplies in a tangible way that can be assessed through metrics. CMS has helped identify certain aspects of hospital service that can be measured and improved, including everything from product costs and payment expediency to improving patient outcomes and customer service scores.

If the metrics indicate that a Medicare hospital has been demonstrating high levels of performance in these areas by purchasing these products, then the hospital becomes eligible to receive higher reimbursement levels, which translates directly into more money for purchasing. Payments made for hospital performance and quality measures will begin in fiscal year 2013.

So what does the implementation of value-based purchasing mean for hospitals and healthcare service providers? How will it affect healthcare suppliers? As an industry leader in connecting healthcare service providers with purchasers in hospitals, we will be examining the effects of value-based purchasing in respect to quality and cost in the coming weeks.


Next week: How Value-Based Purchasing Will Affect Hospitals and Healthcare Service Providers

Following week: How Value-Based Purchasing Will Affect Healthcare Suppliers

Tags: Essential Healthcare Management, EHM, healthcare, medical, hospitals, healthcare suppliers, Healthcare Service Provider, Quality, CMS, Center for Medicare and Medicaid Services, Value-Based Purchasing, Medicare, Affordable Care Act, VBP, business growth