Following concerns from physicians and some US senators, CMS says it will do end-to-end ICD-10 testing with a small sample group of providers selected to represent "a broad cross-section of provider types, claims types, and submitter types."
In an apparent nod to concerns raised by physicians, payers, hospitals and Congress, the federal government said Wednesday that it would conduct limited "end-to-end testing" of the new ICD-10 diagnostic coding set this summer with "a small sample group of providers."
"End-to-end testing includes the submission of test claims to [the Centers for Medicare & Medicaid Services] with ICD-10 codes and the provider's receipt of a Remittance Advice (RA) that explains the adjudication of the claims. The small sample group of providers who participate in end-to-end testing will be selected to represent a broad cross-section of provider types, claims types, and submitter types," CMS said in a memo to providers.
The goal of the end-to-end testing is to demonstrate that:
Providers can successfully submit claims containing ICD-10 codes to the Medicare FFS claims systems.
CMS software changes made to support ICD-10 result in appropriately adjudicated claims based on the pricing data used for testing purposes.
Accurate Remittance Advices are produced.
Details about the end-to-end testing process will be disseminated "at a later date," CMS said.
ICD-10 is scheduled to go live on Oct. 1, despite the complaints from many in the provider community that they aren't ready. The American Hospital Association and the American Medical Association have called for delays in ICD-10 implementation or at least more comprehensive end-to-end testing to allow providers, payers and software vendors to more thoroughly test their systems.
The AMA last week released a study it sponsored showing that projected physicians' implementation costs for the federally mandated ICD-10 medical coding set will be as much as three times higher than initial estimates. Along with the study, AMA President Ardis Dee Hoven, MD, released a copy of the letter she sent to Health and Human Services Secretary Kathleen Sebelius asking her to "strongly" reconsider the ICD-10 mandate.
On Wednesday, Hoven offered guarded praise of CMS's decision to conducted limited end-to-end testing.
"While the AMA is pleased by the federal government's decision today to conduct end-to-end ICD-10 testing, the AMA continues to urge CMS to reconsider the ICD-10 mandate during a time when physicians are struggling to keep up with many other costly, federal mandates," Hoven said in prepared remarks.
"The AMA urges CMS to conduct the testing as soon as possible and to ensure that there is an adequate sample which includes a variety of different sized medical practices and specialties."
The AMA continues to work toward the implementation deadline even though its House of Delegates has called for the repeal of ICD-10. "Adopting ICD-10, while it may provide benefits to others in the healthcare system, is unlikely to improve the care physicians provide their patients and takes valuable resources away from implementing delivery reforms and health information technology," Hoven said Wednesday.
CMS was also feeling pressure from Congress to address the concerns raised by providers. This week, four Republican U.S. Senators—all of them physicians—sent a letter to CMS Administrator Marilyn Tavenner questioning the plan to conduct limited "front-end" testing for ICD-10.
"Given the size and scope of the potential transition to ICD-10, the brevity and limited scope of this test is worrisome, said the letter, signed by Sens. Tom Coburn, MD (R-OK), John Barrasso, MD (R-WY), John Boozman, OD (R-AR), and Rand Paul, MD (R-KY).
"This change will impact millions of physicians and patients, and hundreds of billions of dollars in payments that flow through Medicare and Medicaid. Other major federal IT projects—such as the implementation of Healthcare.gov—have demonstrated the importance of thorough pre-testing every aspect of new systems, both the front-end and back-end components. System-wide errors and delay could adversely impact both patients' own pocketbooks and provider cash flows."
An advocate for rural health says the rural hospital community in Georgia, rife with closings, is so financially strapped that "about 10% of our population [can be considered] Third World Nation health status." More hospital closings are "inevitable" and the trend could spread to the rest of the country, he says.
Jimmy Lewis, CEO of HomeTown Health, LLC
Lower Oconee Community Hospital, a 25-bed critical access hospital in Glenwood, GA in the southeastern corner of the state, announced this month that it will close because of financial pressures. The grim news for the nearly 7,900 people of Wheeler County marks the fourth closure of a rural hospital in Georgia in the past two years.
Attempts to contact the hospital proved fruitless. The plug has been pulled on hospital's website and nobody answered my telephone calls. CEO Karen O'Neal told WMAZ television that the 100 or so employees at the hospital had been laid off, and that "this restructuring is being done to provide sustainable medical services in the Glenwood area." She also told the television station that the hospital's owners are contemplating "some kind of urgent care center.''
Jimmy Lewis, CEO of HomeTown Health, LLC, an advocacy association for 56 small hospitals in Georgia, believes that closures of rural hospitals in his state could serve as a bellwether for the rest of the nation. Lewis spoke with HealthLeaders Media earlier this month, and the following is an edited transcript.
HLM: Georgia has seen four rural hospitals close in the past two years. What is driving this?
Lewis: Because of the incremental reduction in Medicaid over 10 years or so in Georgia and other issues, many of these critical access hospitals have about a seven-year death spiral that's a function of the cost-to-charge ratio. The rural hospital community in Georgia is financially strapped.
For the most part, they have financial losses due to operations, and if they are surviving, it's almost entirely on subsidies such as the disproportionate share payment and more especially payments from local and county governments. Reimbursements are down and they are continuing to fall. We are looking at losing disproportionate share payments. We are at a point where we have insufficient reimbursements.
Then along comes the economic downturn. Unemployment goes up; self-paid uninsured soars. We have uninsured in Georgia at about 17%. We have unemployment in some of these rural communities at 15%-18% plus the underemployed. The consequence is that we have a population of hospitals in rural Georgia that are in great jeopardy.
HLM: Do you anticipate more rural hospital closings in Georgia?
Lewis: We have a situation in Georgia where more closings are inevitable.
HLM: Is the rural hospital crisis in Georgia a bellwether for the rest of the nation?
Lewis: That would be correct. Georgia may be at the front end of the pack because of these incremental reductions in Medicaid and because we have so many critical access hospitals. As these rural hospitals close, it dominoes up to the next-larger hospital and the next-larger hospital and as that occurs, it is going to be a big problem. We just move the self-paid and the uninsured up to the next level of hospitals, and we've got a lot of large hospitals whose ERs are bursting already and this is going to compound that problem.
HLM: What will be the effect on rural healthcare access with these closings?
Lewis: I represent 56 hospitals and when I look at the population in those counties, that is about 1 million people. Georgia is a 10-million-person state, so we have about 10% of our population that we can move into Third World Nation health status. They will have to drive 30 to 60 miles to get healthcare.
We have a large part of Georgia from Macon to Augusta where there are basically no OB deliveries. We've got 32-of-33 critical access hospitals that no longer deliver babies. We've got 12 to 14 of the next larger hospitals that no longer delivery babies. We have about 45–47 hospitals in Georgia that no longer deliver babies. We are seeing a significant reduction in services and access and that creates a situation of higher acuity patients when they do show and it's going to cost the governments supporting it a lot more money.
HLM: Has Georgia's decision to forego Medicaid expansion money been a factor in these closings?
Lewis: Our hospitals have been in trouble as a result of what has happened since 1999. That is what got us into the trouble. The issue of Medicaid expansion is how much money and how quickly would it come in and help those hospitals. Unfortunately, we may be in a situation where we are going to lose hospitals because of the last 10 years. That Medicaid expansion money, although it would be helpful, may not [have been there] in time.
HLM: Oconee had about 100 employees. What happens when those jobs leave the region?
Lewis: They clearly are the best jobs in the community and because most of those are higher paying healthcare jobs, they have to go if they can to the next-closest facility to try to get jobs there. And that is usually a 30-plus mile trip to get employment. People on the lesser-skilled side of that situation just go into unemployment. In Glenwood, I think the unemployment was over 15%. They just go into the unemployment rolls.
HLM: Where will people in Wheeler County go now for their care?
Lewis: They will have to go 20 to 30 miles in any direction to find a hospital. For physicians, when the hospital is gone, the physicians go and it creates a problem. Those people in those communities are going to struggle to find access. In many cases what ends up happening is if the emergency medical services stay, they end up using the ambulance to carry low-acuity patients to healthcare when they don't have any other means of access.
HLM: Can Oconee and other rural hospitals restructure for different services, such as stand-alone emergency departments or urgent care centers?
Lewis: In Georgia there is some work being done legislatively to find a licensure vehicle that would allow restructuring to occur, but right now we do not have regulatory or licensing vehicles to allow for standalone emergency departments or anything like that.
HLM: What happens to the communities when these hospitals shutter?
Lewis: If there is not a hospital, there won't be any future economic development. If a hospital closes and the community has an industry, they have a strong possibility of losing that industry simply because the industry cannot assume the liability for accidents and healthcare for its employees if it can't find access to care.
These hospitals are economic engines and when they close, the community goes into an economic paralysis. Nothing ever goes back there again from an industry standpoint or a jobs growth standpoint.
HLM: Why are rural hospitals struggling even more than their urban and suburban counterparts?
Lewis: Rural hospitals do not have the population to support specialty services. Larger hospitals have in some cases very large sums of money entirely as a result of specialty services they provide including cardiology and orthopedics and oncology. In small rural hospitals it is a rarity to see a surgeon. It takes eight family practitioners to support one surgeon. It takes about 5,000 people to support a family practitioner. So you have to have 40,000 to support a surgeon. Well, that is just not there.
HLM: What needs to be done to keep rural hospitals viable?
Lewis: Somewhere along the line, a decision will be made that we will either try to address rural America or we will just let it go to Hell. Right now it is in the process of going to Hell because the payers don't have any sensitivity to save the rural segment.
It is easier for them to cut rates to rural hospitals because they have less ability to negotiate because they don't have the volumes. Until such time as policy makers mandate that insurance companies reconsider the rural part of the nation we are going to have a situation in Georgia and nationally where the people who live in rural communities are going to be very old and on Medicare, or they are going to be unemployed and uninsured or on Medicaid and it is going to be a tremendous financial burden on all the states.
HLM: Is there any good news out there for rural providers?
Lewis: If you look at what is coming out of Washington, there was a recent proposal to do away with critical access hospital designation. That is the vehicle that has kept those hospitals going and somebody wants to eliminate that! The only good news is those people in rural healthcare have the passion to help people and help them survive. The American spirit does live on.
A reduction in bad debt will come as more people obtain health insurance under the Patient Protection and Affordable Care Act, Moody's says. An improvement in earnings is expected mainly because 2013 was marred by declining patient volumes and the cuts to Medicare reimbursements under sequestration.
For-profit hospitals are expected to see a reduction in bad debt and favorable year-over-year earnings over the next 18 months and that has prompted Moody's Investors Service to upgrade its outlook for the sector from "stable" to "positive."
Moody's says the reduction in bad debt will come as more people obtain health insurance through Medicaid expansion or the health insurance exchanges under the Patient Protection and Affordable Care Act.
"The impact will vary among institutions based on factors including their location, since only 26 states and the District of Columbia have expanded their Medicaid programs under the act," says Dean Diaz, a senior vice president at Moody's.
The expected year-over-year improvement in earnings is expected mainly because 2013 was marred by declining patient volumes and the 2% cuts to Medicare reimbursements under sequestration.
"Our outlook is predicated on the year-over-year projections, and 2013 was a tough year for the sector, for-profit or not-for-profit," Diaz says. "There were a lot of volume and EBITDA (earnings before interest, taxes, depreciation, and amortization)declines so it creates a lower base for companies to grow off of. The prior year was lower, so we have an easier comparison as far as our growth number, because that is what our outlook is based off of."
"A piece of it is an expectation that we will see a little bit better growth in volumes… as we get more clarity around observation days and the two-midnight rule and we get more clarity as the projection period goes out over the next 12 to 18 months."
In addition, Diaz says the CHS/Community Health Systems Inc.'s acquisition of Health Management Associates and Tenet Healthcare Corp.'s acquisition of Vanguard Health Systems are expected to bring cost reductions and operational improvements to the sector, and to boost aggregate EBITDA growth in 2014.
For-profit hospitals will continue to compensate for in-patient volume declines by bolstering investments in out-patient services. "You've got a lot of investment and acquisitions of imaging centers, ambulatory surgery centers, and oncology," he said.
"Our measure of volume that we typically look at is the adjusted admission. That outpatient piece is bolstering it. There is more of a migration toward outpatient. Payers are looking to manage the costs of care and keep people out of the hospital when necessary. You are going to see the operators start to adjust to what I think is a secular change there."
In stark contrast, for the past six years Moody's has issued a "negative" outlook for the not-for-profit hospital sector. Officials from the bond rating agency said in December that the dour outlook is not likely to change anytime soon.
Diaz says that larger, for-profit health systems hold significant advantages in the market over most not-for-profit hospitals.
"These are multi-facility, multistate operations, whereas a lot of the ratings that are maintain on the not-for-profit side… are individual sole site that may not have the flexibility to do some of the things that the for-profits do, such as exit services or exit markets that don't work for them."
Diaz says for-profits aren't necessarily "cherry picking" the more affluent areas but that they are very deliberate when they pick the demographics and the areas they want to be in. "They will go to high-growth markets. They will research the demographics in that market as far as payer mix and employment so they do have that flexibility," he says.
"There is a bit of portfolio management that plays into the way these companies are built. They may have that market presence to have a stronger negotiating position with payers. They may also have more in the way of purchasing power that would reduce the cost of their supplies to provide that service. In that respect, they've got a benefit of scale and diversification that allows them to drive efficiencies across their portfolio, whether it be from the pricing perspective or the cost perspective."
In a letter to HHS Secretary Kathleen Sebelius, the American Medical Association asks her to "strongly" reconsider the ICD-10 medical coding set mandate, which the AMA says will place a "crushing burden" on physicians.
The American Medical Association on Wednesday released a study it sponsored showing that projected physicians' implementation costs for the federally mandated ICD-10 medical coding set will be as much as three times higher than initial estimates.
Couple with the release of the study, AMA President Ardis Dee Hoven, MD, released a copy of the letter she sent to Health and Human Services Secretary Kathleen Sebelius asking her to "strongly" reconsider the ICD-10 mandate, which takes effect Oct. 1.
"The markedly higher implementation costs for ICD-10 place a crushing burden on physicians, straining vital resources needed to invest in new health care delivery models and well-developed technology that promotes care coordination with real value to patients," Hoven said in the letter. "Continuing to compel physicians to adopt this new coding structure threatens to disrupt innovations by diverting resources away from areas that are expected to help lower costs and improve the quality of care."
To bolster support Wednesday, the AMA also introduced the #StopICD10 hashtag on Twitter.
A 2008 study by Nachimson Advisors estimated that the cost to implement ICD-10 averaged about $83,000 for a small practice, $285,000 for a mid-sized practice and $2.7 million for a large practice. However, Nachimson Advisors in a follow up study released this week for AMA found huge cost variables for each practice size based on specialty, vendor and software. Small practices costs ranged from $56,600 to $226,000; mid-sized practice costs ranged from $213,000 - $825,500; and large practice costs ranged from $2 million to $8 million.
Nachimson Advisors said that two-thirds of practices will likely fall into the high range of new cost estimates because they are expected to incur major costs for software upgrades to accommodate ICD-10. The study blamed the ballooning 2014 estimates in part on post-implementation costs, including testing and the potential risk of payment disruption. The Centers for Medicare & Medicaid Services has estimated that claims denial rates could increase 100% –200% in the early stages of coding with ICD-10.
In her letter to Sebelius, Hoven reminded the secretary that while the AMA is working however grudgingly toward the implementation, the association's House of Delegates has called for "repealing ICD-10 for the simple reason that it is not expected to improve the care physicians provide their patients and, in fact, could disrupt efforts to transition to new delivery models."
"The transition to ICD-10 represents one of the largest technical, operational, and business implementation in the healthcare industry in the past several decades. Implementing ICD-10 requires physicians and their office staff to contend with 68,000 diagnosis codes—a five-fold increase from the approximately 13,000 diagnosis codes in use today. The broad use of ICD-10 codes for determining reimbursement, coding in all healthcare settings, and healthcare coverage has not been done in other countries, making the U.S. implementation unprecedented," Hoven wrote.
The AMA also notes that software vendors have lagged in preparing for the new code set, which means that practices can't conduct their own tests or implement workflow changes to ensure their new systems work.
As the Oct. 1 implementation date nears, physicians' professional associations have become more strident in voicing their concerns. Last week, the Medical Group Management Association issued a survey of more than 570 practices representing more than 21,000 physicians and found that less than 10% of them had made significant progress when ranking their overall readiness for Oct. 1, up from 4.7% in June, 2013.
MGMA Senior Policy Advisor Robert Tennant says providers, payers, the government, and other players in the ICD-10 movement are not working in a cohesive and coordinated fashion.
"ICD-10 is like a cascade. Things can't happen until other things happen," Tennant says. "What we are finding through research and discussions with our members and industry [is that] the pieces aren't coming together as quickly as the government had expected them to. That includes software vendors, clearinghouses, [and] health plans. Nobody seems to be out front and leading the pack, and that includes the government."
First the bad news: Fewer doctors and the retail sector's knack for delivering price transparency and convenience are collectively putting physicians on notice. Now the good news: There's plenty of work for everyone.
Someone needs to respectfully inform physicians that, at least on the primary care front, they've already lost the scope-of-practice battle they've been waging from coast to coast against nurse practitioners, physician assistants, and other nurse clinicians with advanced degrees.
As in so many battles, it comes down to numbers.
1. A Dearth of Doctors
For starters, there aren't enough physicians around to provide access to care, especially as the Patient Protection and Affordable Care Act extends health insurance coverage to millions of people. The American Medical Association reports that the median age for all physicians in the United States is about 51 years, and so the physician shortage is expected to worsen as more physicians retire in the coming decade.
2. Price Sensitivity Ratcheting Up
Second, the rise of high-deductible health plans means that patients will become much more price sensitive and start acting more like consumers. Primary care practices led by physician assistants and nurse practitioners most likely can be run with the same efficiencies as physician-led practices and probably with reduced labor costs.
3. Retail Understands Consumers
Third, retail businesses understand the potential for creating vibrant walk-in clinics and other on-site provider services that will mesh with the demands of savvy healthcare consumers for price transparency and convenience. When CVS Caremark announced last week that it would no longer sell tobacco products, the retail chain wasn't just looking for good PR.
CEO Larry Merlo made that apparent when he said in a prepared statement: "Put simply, the sale of tobacco products is inconsistent with our purpose. As the delivery of healthcare evolves with an emphasis on better health outcomes, reducing chronic disease, and controlling costs, CVS Caremark is playing an expanded role in providing care through our pharmacists and nurse practitioners."
CVS and other retail giants such as Rite Aid, Walgreens, Walmart, and regional supermarket chains across the country have for years been experimenting with various on-site outpatient services. The move by CVS suggests that the trend will intensify. The people who run these businesses are very smart. When it comes to succeeding in highly competitive markets with tight margins, retailers are light years ahead of just about everyone in traditional healthcare.
Much more so than traditional medicine, retailers understand what customers can afford. People making $25,000 a year with a $4,000 healthcare deductible are essentially uninsured except for catastrophic coverage. They are going to be paying for most, if not all, of their healthcare services. Retailers have figured this out and they'll be cost competitive on the primary care services most in demand. In traditional provider settings many clinicians often don't know the price of the drugs or procedures they're recommending.
4. Retail Knows How to Build Loyalty
Fourth, retailers understand labor costs. They see the value in hiring two physician assistants for the price of one primary care doctor, especially for clinics with extended operating hours. I am speculating here, but I would imagine that retailers can run outpatient facilities at a much lower cost than can traditional providers.
In addition to keeping the doors open longer, retailers can rely on steady walk-in traffic and more convenient locations. It's conceivable that they'd advertise for flu shots, cholesterol screenings, or other primary care service loss leaders to get customers in the door.
And it's all about getting customers in the door and developing brand loyalty, another retail strong suit. As they expand clinical services, retailers will become even more sophisticated and will continually assess and experiment to determine what customers want.
The patient with diabetes, for example, may be directed toward an aisle carrying skincare and products for feet. An overweight or obese customer at a supermarket-based walk-in clinic might be directed towards the fresh vegetable aisle. Patient satisfaction is a relatively new idea in traditional medicine. In retail, it's always been about customer satisfaction.
What are physicians to do about all of this? First, they should acknowledge that they probably cannot go toe-to-toe with retail chains that can stay open longer, and have cheaper labor costs, more convenient locations, and see more foot traffic.
Retail Has Limits
Rather than attempting to delay the inevitable, or attempting to compete at a retail level with businesses holding decades of expertise, physicians should instead play to their own strengths. Retail clinics are convenient and cheap, but they have their limits.
In this new era of outcomes management and value-based reimbursements primary care physicians are perfectly suited to practice at the top of their licenses to treat more complex medical issues, to oversee population health measures, and to devise care plans for patients with multiple chronic conditions.
The irony here is that for all of the kvetching we have heard in some quarters about the shift away from fee-for-service and toward value-based payments, that very reimbursement scheme may prove to be the salvation of many traditional practices. Physicians do not want to find themselves competing against retail giants for who can provide the cheapest services.
The good news is that regardless of the care setting, there is plenty of work for everyone. The venue may evolve but patient demand is not going away.
The rise in demand for PA's can be attributed to growing interest from large integrated health systems, retail clinics, health centers, and concierge physician practices, says one healthcare recruiter.
There is no corner of the healthcare job market that is hotter now than the search for physician assistants.
"PA searches are up 127% year-over-year in the numbers we do, which is insane. You just don't see that spikes like that," says Travis Singleton, senior vice president at healthcare recruiters Merritt Hawkins. "We are not quite at a feeding frenzy yet, but we are getting there."
And that demand is transitioning to reflect the broader transitions in healthcare delivery. Singleton says about 17% of Merritt Hawkins' PA searches are for rural areas and mostly in primary care, but that the demand for PAs in more-urban settings is intensifying.
"We attribute that to the alternative delivery sites that are now using PAs," he says. "It used to be the one- or two-doctor clinics which certainly still use PAs. Now, large integrated health systems are hiring them in mass numbers, as are retail clinics like CVS and Walgreens, federally qualified health centers, and concierge doctors."
"Certainly Walgreens and CVS and Walmart are a big part of that," he said, "because they are primary care givers. But even payers recognize the different services that PAs or nurse practitioners can bill for and the more that health centers see that, even if it is under MD supervision, the more they are going to put them on staff."
The annual survey of the American Academy of Physician Assistants also shows a strong demand that is reflected in a nationwide median compensation of $90,000 for PAs who are paid salaries and $100,000 when PAs earn a base plus a bonus.
For a little perspective, the national median household income [PDF] is about $55,000, so PAs are doing alright. However, by healthcare sector standards, they provide excellent bang for the buck. Consider that primary care physicians, who are also in high demand, had an average base salary of $185,000 in 2013, according to Merritt Hawkins.
"PAs are perhaps the single best bargain in healthcare right now and that is one of the reasons why people are snapping up PAs right as they graduate," says AAPA President Lawrence Herman, PA-C, MPA. "More hospital systems and employers are looking and asking 'where is my value?' They are looking at outcomes too."
"It's not a matter of buying a cheaper car. It's buying a car that may be less expensive, but has better statistics in terms of safety. So, when you are looking at patient satisfaction levels, there are high parallel to physicians and in some instances higher than physicians. When you are looking at other outcomes data there is substantial data that show that PAs do it as well as physicians in the primary care setting."
Across specialties and practice settings, 46% of PAs in the AAPA survey say they get bonuses in addition to their base salary, and that the bonuses are largely dependent on performance outcomes such as productivity and quality improvement. Three-fourths of the PAs say their base pay is from annual salary, 22% say they're paid an hourly wage, and 3% say they're compensation is based on productivity measures determined through relative value units, patient encounters, charges and collections.
Employer type also factors into compensation. Higher median PA base salaries are reported in university hospitals ($93,000) and other hospitals ($95,000), while the lowest compensation is in solo physician practices ($85,000). Thirty-seven percent of PAs provide medical services in hospitals and 10.3% work in solo practices, the survey found.
Nearly one-third of PAs (32%) are practicing in primary care. However, just as with physicians, PAs who gravitate towards specialties make more money. Average compensation for PA specialties such as dermatology ($117,000), emergency medicine ($108,000) and surgery ($105,000), were considerably higher than for PAs working in primary care and family medicine, who reported earning less ($94,000 and $93,400, respectively).
Singleton says the better compensation in specialty care has not gone unnoticed by PAs.
"Yes, PAs, just like MDs, make more as specialists. Yes, that has gravitated about two-thirds of PAs into specialty care," he says. "Unfortunately, the way the market has fallen out we need more primary care. If you are a PA you can't blame them. If they can make 20% to 30% more in specialty care and in some cases have an easier workload it is going to be tough to pull them back into primary care."
Herman says it's not just the relatively lower compensation costs that make PAs a good value. It's also their flexibility.
"If someone is a physician and they are board certified as a dermatologist that is what they do. PAs being trained as generalists are extremely nimble. PAs typically will change specialties or disciplines at least twice during their careers. Part of that is responding to workforce and healthcare needs and it may be the PAs find they want to do something different," says Herman, who in his PA career transitioned from an occupational therapist to the emergency department and then toward family practice.
Singleton says the demand for PAs and NPs reflects a broader trend in healthcare delivery.
"Whether or not you think there is a physician shortage, whether you think there is utilization mismanagement or mal-distribution or not, we are not going to get out of it without everyone practicing to the limit of their abilities, and a lot of that is going to fall on NPs and PAs, specifically. I don't expect this trend to stop. I expect NPs and PAs recruiting to go through what primary care physicians did," he says.
"Keep in mind that is all new. In the Dallas market 10 years ago 75% of the PAs were employed by independent physicians or practices. Now, 75% of PAs are controlled by health systems. You are going to see salaries escalate at least to the point they can. You are going to see health centers take a loss on an individual provider because of the downstream revenues and referrals they get. And you are going to see them get creative with signing bonuses and call coverage," Singleton says.
"We are already starting to see some of them mimic MDs as far as RVUs and other production bonuses. I don't see that changing, at least not in the next three or four years."
Healthcare providers, payers, the government, and other players in the ICD-10 changeover are not working in a cohesive and coordinated fashion and won't be ready for the transition in eight months, says an MGMA policy expert.
The looming Oct. 1 implementation for ICD-10 has healthcare providers antsy about a potentially rocky transition to the new diagnostic codeset in the midst of other fundamental and profound changes to the healthcare sector.
A Medical Group Management Association survey of more than 570 practices representing more than 21,000 physicians finds that less than 10% of them had made significant progress when ranking their overall readiness for Oct. 1, up from 4.7% in June, 2013.
MGMA Senior Policy Advisor Robert Tennant says providers, payers, the government, and other players in the ICD-10 movement are not working in a cohesive and coordinated fashion.
"ICD-10 is like a cascade. Things can't happen until other things happen," Tennant says. "What we are finding through research and discussions with our members and industry [is that] the pieces aren't coming together as quickly as the government had expected them to. That includes software vendors, clearinghouses, [and] health plans. Nobody seems to be out front and leading the pack, and that includes the government."
He notes, for example, that there are only eight months until the implementation date and Medicare has not yet released its payment edits. "They've not yet begun to test with providers and even when they do so in March they are only going to do front-end testing. They aren't going to test the claim from start to finish. This is a recipe for disaster if all of these pieces don't come together," he says.
ICD-10 was supposed to take effect on Oct. 1, 2013 but the Department of Health and Human Services in 2012 rolled back the deadline for a year after providers complained. MGMA has not called for another implementation delay, but Tennant says the likelihood of a smooth transition diminishes by the day.
"Can it get done in time? Let's just say that everything came together in September. That is not enough time," he says. "The industry is a little like the Titanic. It can turn, but very slowly. We are concerned that there won't be enough time for testing. The government experienced that with healthcare.gov."
"If you don't test, you run the risk of problems," Tennant says. "And ICD-10 impacts every part of healthcare on the practice side, the clinical, the administrative, the entire revenue cycle. So, if things don't go smoothly it could dramatically impact cash flow for practices and ultimately that could impact patient care."
Flipping the switch to ICD-10 will come at the same time that providers are grappling with interoperability and other complex issues under Meaningful Use Stage 2 that must be implemented to avoid financial penalties. In addition, no one really knows how the first full year of the Patient Protection and Affordable Care Act will play out for providers as the healthcare sector continues its shift towards population health, value-based payments and accountable care, and other fundamental changes.
Russ Branzell, CEO of the College of Healthcare Information Management Executives, doesn't believe the ICD-10 implementation deadline should roll back again, but he concedes that providers have too much heaped on their plates all at once.
"We need to allow providers and hospitals to really focus on ICD-10," he says, "but we are also concerned that there are too many competing initiatives that are converting around the same time frame—everything from meaningful use, security requirements, ACOs and population health—all of this is converging at the same time and distracting from getting ICD-10 appropriately resource staffed, process improved and implemented."
Instead of rolling back the ICD-10 deadline for a second time, Branzell says the federal government should give providers another six months or longer to implement Meaningful Use Stage 2 before suffering any financial penalties.
"In a medium-sized medical group, if you have too many competing initiatives for caregivers, there is not a lot of focus on anything. And with ICD-10 there so much that still needs to be done, especially on the provider end, training and understanding the documentation requirements and the new systems. If they have to do that while they are trying to figure out Meaningful Use Stage 2, something has to give."
Branzell believes that many providers will opt to delay Meaningful Use Stage 2 and suffer the penalties as they attempt to launch ICD-10.
"We share MGMA's concerns, especially for the provider side of this," he says. "We think most of the hospitals have a good grasp on ICD-10. They don't have all the training and work they are supposed to have had done but generally the hospitals have a good grasp on this. But even on the hospital side we think they need to focus and have the flexibility."
"It doesn't mean that they should delay anything, but they should have some flexibility so if anyone needs to move back Meaningful Use Stage 2 they are not suffering penalties so they can focus on this. If we allow everyone the flexibility they need, maybe six or 12 months, we can get all of these initiatives accomplished in an appropriate sequence and timing."
Why not rollback the ICD-10 deadline and allow providers to focus on Meaningful Use Stage 2?
"For ICD-10, the ship has already sailed," Branzell says. "Most hospitals have already upgraded their systems. Many are already running dual accounting systems to check on this. At this point so many have geared up and there is an expense that has been laid out for most organizations that if they were to delay this date there would be lost effort and they would have to turn around and do it all over again."
He says the previous delay to ICD-10 implementation in 2012 was done so far in advance that providers had yet to spend a lot of money on the project. "Now a lot of organizations have command centers and teams dedicated to this and they have already invested in training resources, all of which is in place for Oct. 1. What do you do with all of that? Shut it all down? That would be very expensive."
Tennant says the federal government needs to prepare some sort of contingency plan or a rollback for ICD-10 if the Oct. 1 deadline proves to be untenable. "They have to do something quickly rather than wait until the ninth hour and announce something in late September. Better to do it now to prepare for the transition," he says.
"They frankly haven't even created an environment where physicians are confident about why the government is moving toward this new code set. There is no evidence to suggest that it improves clinical performance. There is no evidence that there is a return on investment which is staggering when you consider the cost of this for practices. What we have learned in the last few months is that you have to be ready for major transitions. And if you're not, they must be put on hold."
If budget balancing gimmicks being considered by Congress take effect in the coming year, they could potentially mean the loss of billions of dollars in Medicare and Medicaid reimbursements for rural providers. Don't let it happen.
Rural providers, you already have enough on your plate tending to an older, sicker, poorer patient mix on a red-lined budget during a time of monumental transition for the healthcare sector.
It's no fun piling on.
Nonetheless, make sure that calling Congress is on the top of your list.
Regardless of your political affiliations or how you feel about the Patient Protection and Affordable Care Act, if you're a physician leader or an executive at your hospital, or if you're simply an average citizen who cares about maintaining quality healthcare in your community, you need to stay abreast of developments on Capitol Hill, and your elected representatives need to hear from you.
If budget balancing gimmicks being considered by Congress take effect in the coming year they could potentially mean the loss of billions of dollars in Medicare and Medicaid reimbursements for rural providers. It won't matter whether you're a blood red Republican or a blue dog Democrat when you're trying to balance the books on diminishing revenues.
One of the biggest potential icebergs out there is the permanent repeal of the widely reviled Sustainable Growth Rate funding formula for physicians' Medicare reimbursements. Virtually no one will weep over SGR's demise if Congress successfully installs a permanent 'doc fix' before the latest stopgap expires on March 31.
The potential trouble comes when lawmakers look for money to plug the estimated $116 billion hole over 10 years that would cover the cost of a permanent fix. This is a huge threat to hospitals in general and rural hospitals in particular because, well, it's happened before.
"Whether it's for the debt ceiling or a temporary doc fix or a permanent SGR fix it all has to be paid for and unfortunately the scenario that played out in the past is to rob Peter to pay Paul," says Maggie Elehwany, vice president of government affairs at the National Rural Health Association.
Do you recall how they paid for that latest temporary SGR bill that expires on March 31?
"They extended sequestration for rural providers for two years," Elehwany says. "A lot of people thought that it was solved when we had that last budget deal and Congress made a bunch of speeches about how we fixed the problems with sequestration. They did curb sequestration for discretionary spending only. For mandatory spending, Medicare, those sequestration cuts are still in effect. Not only are they still in effect, they were expanded for another two years. In 11 years from now we will be done with it, but that is a 2% cut across the board for the next 11 years and no provider can withstand that."
Fixing the SGR will help rural physicians, but not if it comes at the expense of the rural hospitals that provide safety net access for about 60 million Americans.
"What rural providers do is all part of the safety net," Elehwany says. "If you try to help rural physicians and fix the SGR problem that is wonderful, but not if you do that by cutting rural emergency medical services or cutting critical access hospitals or some of these rural Medicare (Preferred Provider Organization) hospitals where nearly every physician out there in rural areas is based."
"If you close the hospitals, the doctors aren't going to be able to practice," she says. "If you cut ambulance funding, there isn't going to be anyone to provider transportation. More than any other type of healthcare delivery system, the rural healthcare providers really are on a team that is united and they need to work together simply because there are so many challenges to overcome: the distances, the geography the weather, mountain ranges… just to serve the population."
More bad news: Attached to the SGR are Rural Medicare Extender provisions that will also expire with a permanent fix. These provisions were tacked on to the SGR after Congress saw the devastating effect on rural hospitals when Medicare switched to the prospective payment system in the 1980s. These include supplemental payments for Medicare-dependent hospitals, low-volume hospitals, and critical access hospitals.
As it stands now, rural hospitals face a potential double whammy. Not only could they be saddled with paying for the SGR repeal, they could also lose this supplemental money that comes with it. A Senate bill creating a permanent fix for SGR doesn't address how to pay for it, but continues some supplemental funding for rural hospitals in a number of areas including ambulance and transportation costs. However, two separate bills in the House don't include any supplement funding for rural health.
"That is our concern. That is where we think we need to do a big education pitch to the House," says Elehwany. "Even in the more urban states every Senator has rural constituents."
Understand that in the halls of Congress right now there are literally hundreds, if not thousands, of well-paid lobbyists trying to protect their particular special interest from any budget cuts. That's why it is so important for rural providers to take the initiative and contact their elected representatives. Groups like the NRHA and the American Hospital Association do a good job making the case for hospitals. But nothing makes an elected representative take notice like an active electorate. While Congress en masse appears to be out of touch with the rest of America, individual representatives and senators are not.
Elehwany offers a handful of effective talking points:
Rural providers are a safety net for about 20% of the nation's population. Serving this generally poorer, older and sicker demographic requires more federal funding because there is no place to cost shift. It is not hyperbole to say that when rural hospitals close, people will die.
Rural healthcare is cost effective. "Only an infinitesimally small portion of the federal budget is spent on rural healthcare providers but it's a good bang for the buck," Elehwany says. "It is 3.7% less expensive to treat the identical procedure in a rural community when compared with a suburban or urban community and the reason is that everything in rural is based on primary care."
Rural hospitals are economic engines for the areas they serve. "If you close that rural hospital or if you force a physician to leave a rural community you are taking a huge economic component out of that community," Elehwany says. "The hospital is often the largest employer in a rural community. If your critical access hospital closes, you lose on average 107 jobs instantly, and that isn't even talking about the ancillary jobs from linen services to restaurants in the areas. And when the hospital closes, the doctors are the next to go and then the pharmacists are the next to go. What business is going to relocate or what family or retiree will stay in a rural community if there isn't some type of quality healthcare?"
Elehwany notes that the last two Congresses have sworn in huge freshman classes in both the House and Senate so they may not completely understand the pressures you are under. Make sure that they do. Send them a letter. Call them on the telephone. Invite them to tour your hospital and meet staff and talk with patients and community leaders to talk about the role that your hospital plays in their lives.
Rural providers have a strong case. You just have to make sure Congress hears you.
The economic recession may be to blame for a downturn in demand for newly licensed registered nurses, suggests a survey from the Robert Wood Johnson Foundation. The lead author speculates, however, that demand will grow stronger as healthcare reform is implemented.
For years we've been told about the nursing shortage and the thousands of jobs awaiting newly minted registered nurses. Now a survey of newly licensed registered nurses suggests that this might not be completely accurate.
Compared with six years ago, newly licensed registered nurses (NLRNs) who completed their studies in 2010–11 have greater job commitment, but are more likely to work part-time, and to report that they had fewer job opportunities, according to the survey from the RN Work Project, a program of the Robert Wood Johnson Foundation.
Of those in the 2010–11 cohort who reported being unemployed, 31.1% said they could not find an entry-level RN job in their area, compared with only 11.8% reporting this in 2004–05. More specifically, one in 10 of the 2010–11 cohort said they could not find a job they liked.
Christine T. Kovner, RN, a professor at the College of Nursing at NYU and lead author of the survey, says that some of the perceived downturn in demand for nurses may have been a byproduct of the recession.
"It's more difficult to get jobs for new graduates now than it was prior to the recession," she says.
"We think what happened during the recession was that as people's partners lost their jobs, a lot of nurses increased the hours that they were going to work. We looked at data and found that nurses had increased their hours of work. Some of that was part time to full time. Some of it was doing extra overtime more often. That may have been one of the factors that for this group that graduated in 2010–11 made it more difficult for them to get jobs."
A Tighter Market, But Still 'Lots of Jobs'
Kovner concedes that the data and survey returns compiled by RN Work Project and other objective data compiled about healthcare employment are not granular enough to provide empirical evidence on the state of nurse employment.
"We think the best measure is how the nurses perceive what is going on because at the end of the day, that is all that matters," she says. "If they perceive that there is difficulty in getting jobs they are likely to be more reluctant to leave their current jobs. We think that is what's happening here."
While the job market may have tightened, at least temporarily for nurses, Kovner says there are still "lots and lots of jobs" with tremendous opportunities for career growth, especially when compared with the prospects of other recent college graduates.
"If you look at the data, most of them still all got jobs. At NYU our graduates have the highest average salaries than any of the other schools at NYU including the business school," she says. "People that aren't in the sciences, a lot of them work in publishing. A lot of them are unemployed, I don't know for NYU in particular, but in general, liberal arts graduates have a more difficult time finding jobs. So nursing is still a great job opportunity, but it is not as great as it was."
Fewer Hospital, ICU Jobs for New Nurses
As in past years, most NLRNs began their nursing careers in hospitals. However, that percentage dropped for the 2010–11 cohort, with 77.4% of the NLRMs finding jobs in hospitals, compared with 88.8% in the 2004–05 cohort. Of those in the 2010–11 cohort 13.5% were more likely to work in a magnet hospital compared with 10.3% of the 2004–05 cohort.
They are also less likely to work in intensive care units (18% in the 2004–05 cohort, compared with 11.6% in 2010–11) and more likely to be working part-time as a nurse (10.5% in 2010–11, compared with 7.8% for 2004–05), the survey found.
Kovner finds this movement away from hospital work for NLRNs over the past several years one of the more "telling" parts of the survey, but it's not quite clear exactly what the data is saying. Does this trend reflect the move toward lower inpatient volumes and toward outpatient services?
"I don't think so, but I haven't looked carefully at the number of occupied beds in those two time periods," she says. "Fewer baccalaureate graduates are getting jobs in hospitals than they were six years ago, but still way more on a percentage basis of baccalaureate graduates are working in hospitals compared with associate degree graduates in their first job."
And there does appear to be more interest in pursuing advanced degrees among the NLRNs, as 16.6% of them reported that they were enrolled in a formal education program compared with 11.4% in the earlier cohort.
"I don't know what that is going to mean long term," she says. "I don't know whether people did that because they were having difficulty getting a job or they could only get a part time job. A lot of the associate degree graduates are going back to school to get a bachelor's degree. I don't know about baccalaureate graduates and what they are planning to do. A lot depends upon the job opportunities. If you can work at an outpatient department and help people take care of their chronic illness as a registered nurse, which I believe you can, they may choose to do that."
Demand Expected to Grow
While she can only speculate, Kovner says she believes the trends in demand for nurses will grow stronger as the Patient Protection and Affordable Care Act takes hold, and as providers move away from fee-for-service care and toward value-based care and population health.
"They will have an easier time getting a job," she says. "First of all there are the numbers of older nurses who are going to start retiring. We thought that was going to happen earlier than it did but again we think that with the recession people decided who might have retired decided not to retire."
"Beyond that the opportunities for nursing are going to be humongous. Accountable care organizations, helping people manage chronic care, working in walk-in or outpatient departments; a lot of organizations are still thinking through how best to use the registered nurse. There are a lot of opportunities and even lot what nurse practitioners do registered nurses can do."
"There is going to be a demand for care coordination. You need to have skilled people doing that. It's not training someone who has a degree in English for how to make a list of what all the services are. You really need a skilled medical professional to make the judgment and the problem solving involved in that. We will see how it plays out."
Physician appointment wait times tracked in a Merritt Hawkins survey varied from one day to more than eight months. The average wait in all metro areas and specialties is 19 days. Boston has the longest waits (45 days); Dallas had the shortest (10).
A survey on wait times for physician office visits [PDF] in 15 cities across the nation could be a harbinger for access to healthcare providers under the Patient Protection and Affordable Care Act.
First the bad news: Even before Obamacare's expanded coverage really kicks in, patients hoping to schedule an appointment with a physician in 2014 should expect to wait for several weeks in most parts of the country. Those on Medicaid, stand about a 50–50 chance of being seen by a doctor.
Now the good news: The wait time for an office appointment in 2014 is 18.5 days in five specialty areas—cardiology, dermatology, obstetrics/gynecology, orthopedic surgery and family practice—an 11% decrease from 2004 when the average wait was 20.5 days.
What's not clear, however, is if this trend will continue as an estimated 16 million people gain health insurance coverage under Obamacare.
All of this data comes from Irving, TX-based physician recruiters Merritt Hawkins, which every five years conducts a survey of nearly 1,400 physicians' offices in 15 large cities to get an idea of the wait times for office visits.
Once again, Boston, the Hub of Romney care, has the longest average wait times for doctor appointments of the 15 metro markets examined in the survey:
72 days to see a dermatologist
66 days to see a family physician
46 days to see an OB/GYN/
27 days to see a cardiologist
16 days to see an orthopedic surgeon
On average, it takes more than 45 days to schedule a doctor appointment in the Boston area.
Merritt Hawkins has conducted the survey in 2004, 2009, and 2014 and each time Boston has averaged the longest wait times among the 15 cities surveyed.
Kurt Mosley, vice president of Strategic Alliances at Merritt Hawkins says it's not surprising that Boston has the highest wait times because 97% of Massachusetts residents are insured. And while Massachusetts has about 508 physicians per 100,000 people [PDF], one of the highest ratios in the nation, many of those physicians are in academia and aren't seeing patients regularly.
On the other end of the spectrum sits Dallas with the shortest wait times for physician office appointments: 10.2 days for specialists and five days for family physicians. Texas has 264 physicians per 100,000 people, the lowest ratios in the United States, which overall averages 373 physicians per 100,000 people.
Not coincidentally, Boston has the highest rate of Medicaid acceptance tracked in the survey at 73%, while Dallas has the lowest at 23%. One in three people in Texas have no health insurance, the highest percentage of uninsured residents in the nation. Texas has vehemently rejected Medicaid expansion money offered by the federal government under Obamacare.
"Texas is still a fee-for-service bastion. We never really caught on with managed care," Mosley says. "The doctors see patients with insurance and Medicaid acceptance is low. And they when you look to see how many doctors per state it's odd because we don't have many doctors per state here in Texas, but they do see people."
Mosley says a lot of the demand for physician services has been taken up by advance practice nurses. "That is a real growth area in Texas. The scope of practice has expanded a lot in the state," he says.
Overall, the average rate of Medicaid acceptance for all five specialties in all 15 markets is 45.7%, the survey shows.
Other average physician appointment wait times tracked by the survey include 28 days to see a cardiologist in Denver, 49 days to see a dermatologist in Philadelphia, 35 days to see an OB/GYN in Portland, OR, 18 days to see an orthopedic surgeon in San Diego, and 26 days to see a family physician in New York.
Physician appointment wait times tracked in the survey varied from as little as one day to over eight months, with an overall average in all metro areas and all specialties of about 19 days, the survey showed.
Mosley says the shorter waiting times seen in 2014 have a lot to do with the economy and the shift toward high-deductible health plans.
"We have lingering high employment, which means fewer insured people, many of whom are deferring seeing a doctor. And another area is a cultural shift as high deductable plans and high co-pays change people's mindsets. A lot of people no longer reflexively see the doctor when they have a problem now that they have more skin in the game. They think twice about it," he says.
"Nevertheless, even in cities with a large number of doctors per capita you are going to wait a few weeks before you see a doctor. In what other service arena does that happen? Last time I saw a lawyer she was open that day."
Mosley says the trend of shorter waiting times is about to be reversed as the growing numbers of people with health insurance collide with a rapidly aging physician demographic.
"(The Department of Health and Human Services) said that over the next seven years they estimate 250,000 doctors will retire. And we already know that the number of doctors over age 55 is 41%. So, then the wait times will dramatically go up," he says. "We see the storm coming and we need to be prepared for it."