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Maryland attorneys are spending thousands of dollars to sign up clients who might have had heart stents needlessly implanted by a doctor at St. Joseph Medical Center. The hospital sent letters to hundreds of patients in December, telling them that the expensive stents in their arteries might have been placed there unnecessarily and under false pretenses. The hospital has identified at least 369 people who might have had unwarranted operations, all tied to a single physician, and more could surface as the examination continues, the Baltimore Sun reports.

We asked several experts on reimbursement and contracting issues to offer predictions for 2010, and the response ranged from greater collaboration and cooperation to more audits and review. And not surprisingly, most expect reimbursements to drop.

Medical homes and accountable care organizations (ACO) will continue to emerge as viable models, and payers will be placing more emphasis on performance and quality, according to some of our experts.

But the biggest changes may still be unknown because they depend on the reform proposals that emerge from Washington, DC.

Scope, content of reform still uncertain

Mary J. Witt, vice president of The Camden Group in El Segundo, CA, doesn't expect dramatic immediate changes; however, developments in 2010 may set the stage for a larger transformation in the coming decade, as government and private payers seek methods of reimbursement that are not based on a payment-per-unit-of-service methodology, Witt says.

Fredrick T. Horton, president and CEO of Horton, Smith & Associates in Overland Park, KS, doesn't expect massive change right away, either.

With the exception of ancillaries and a "general overall holding of the line on reimbursement," Horton predicts only moderate short-term reform. "The healthcare debate is simply too volatile, and while it is necessary to have full-blown reform, the likelihood is that change will be incremental as opposed to cataclysmic," he says.

On the other hand, Max Reiboldt, CPA, president and CEO of The Coker Group in Atlanta, suggests that the government's increasing involvement in healthcare "will undoubtedly have the greatest single effect on compensation, reimbursement, and overall operations of the medical practice in the next few years."

Greater collaboration

"Providers can expect a new era of collaboration," says John P. Schmitt, PhD, senior managed care consultant at Atlanta-based EthosPartners. What has traditionally been an adversarial relationship with payers will become more like a partnership, Schmitt says, noting that payers are more willing to cooperate and collaborate than in past years.

In particular, Schmitt expects to see more data sharing and relationship flexibility. This shift may leave many healthcare organizations puzzled, he says. Long used to the stick, many may not trust the carrot.

However, you still must do your homework. Now is a good time to identify onerous or unclear contract clauses, ask for changes at the next renewal period, and sever relationships with payers who bring more headaches than revenues.

More scrutiny from payers

But it's not all good news. With Recovery Audit Contractor (RAC) programs kicking into gear, expect more scrutiny, says Maggie M. Mac, CMM, CPC, CPC-E/M, ICCE, consulting manager at Pershing Yoakley & Associates, PC, in Clearwater, FL.

"There will be an explosion of audits and reviews ... from government and private payers," Mac says. And based on her recent experience, she expects many of them to be incorrect, making it incumbent upon provider organizations to perform their own reviews.

There's some disagreement on the effect of RAC audits on private payers. Schmitt says the results of the audits will help set the direction of private payer audits.

But Bruce Hallowell, solution director for revenue cycle and finance at CSC in Falls Church, VA, says the issues RACs uncover will be ones private payers have been auditing for years. However, he expects private payers to continue to focus on pediatrics, rehab, and psych.

But regardless of whether private payers use the same checklist, they will be strongly influenced by the success of the RACs and similar efforts, Mac says.

Declining reimbursements

CMS will continue to examine reimbursements for outpatient ancillary services; sleep labs and gastroenterology procedures are particular focuses, says Brian McCartie, vice president of business development at St. Louis–based Cejka Search.

Overall, ancillary income will continue to decrease, says Horton. Payers will be increasingly reluctant to pay for anything other than direct patient care.

In fact, Hallowell, among others, expects to see reimbursement rates in general continue to fall.

Quality to matter even more

More questions will emerge about how to address P4P and other quality issues, particularly in regard to never events, Witt says. Currently, even when the hospital is not paid, the physician is. But that may change. There are already discussions about refusing to reimburse physicians for never events, Witt says, noting that there has been some discussion as to whether PQRI will continue to pay for quality data or whether providers will be penalized for not furnishing it.

Reiboldt offers a similar perspective. Quality and clinical outcomes will be of great importance. Providers will have to balance the need for each with the attendant economic challenges, he says.

Payers and providers realize that medical expenses must be managed and controlled rather than shifted, says Schmitt. Payers are willing to work with providers to craft clinical solutions to economic problems. Accordingly, Schmitt expects to see a move to outcome-based rewards and away from episodic payments.

More micromanaging?

In contrast, Hallowell expects these programs to be more challenging. Specifically, he anticipates more attempts to dictate how providers treat patients. Pay particular attention to the "standards of care" clauses, he says. That will be an important issue in P4P agreements.

HDHP headaches continue

At least until the economy changes, expect continued headaches from high-deductible health plans (HDHP), says Schmitt. There will be more in 2010, with all the attendant collection and payment challenges.

And don't be fooled by all the discussions of real-time claims adjudication, says Hallowell. Even in the unlikely event the technology is in place and the claim is clean, there's no way to know where the patient is in his or her deductible, he says.

A shift to bundling and ACOs

Look for concerns about overutilization to drive the move away from a payment-per-unit-of-service approach. As a result, bundling and ACOs may gain ground, say several experts. (An ACO is a set of providers paid to be responsible for the quality and cost of healthcare for a panel of patients; one example is Geisinger. Under a bundled payment model, providers receive a single payment for a defined set of services.)

In either bundling or an ACO, payments for a group of services are put together and then divided among the parties providing services.

Ideally, these changes are designed to realign incentives away from provision of discrete services to outcomes performance and coordinated care, but payers could also use them to decrease the amount of reimbursement.

Medicare is already pursuing several demonstration projects related to bundling, ACOs, and patient-centered medical homes (PCMH). Hospitals and physicians are aggressively pursuing clinical integration strategies to prepare for these potential changes in reimbursement, says Witt.

It's all part of a larger shift "from simply micro-cost management to macro-care management," says Schmitt.

Paul R. DeMuro, Esq., partner at Latham & Watkins in San Francisco, also expects ACOs to take off, driven, at least in part, by federal initiatives focused on improving healthcare quality and value. ACOs provide a model for physician/hospital integration that DeMuro believes will be the trend of the future. Moreover, ACOs pave the way for the PCMHs, he says.

The ACO provides an organizational structure that allows for a PCMH, DeMuro explains.

And like DeMuro and others, Witt notes that payers are exploring ways to implement the PCMH.

Primary care shortages continue

It's no secret there's a shortage of primary care physicians. Accordingly, providers will need to "interact with health plans on the issue of lack of primary care capability," says DeMuro. This will become especially critical if those currently uninsured suddenly enter the system en masse. "What happens when their systems are stressed?" he says. Will doctors work more? And if so, will there be money to make that happen?

Less money for specialists

Along with pressure to increase reimbursements for primary care, payers will try to wring more money out of the system; at some point, that has to affect specialists, says Witt.

It could result in lower reimbursements, realignment of services, or perhaps fewer services. But with aging boomers, Witt anticipates an increased need for specialty care. Bundling and ACO models will continue to coalesce around services that involve specialists, she says.

Coding will still lag behind technology

Practices will want to ensure that technology—especially technology that helps them reach more patients with fewer physicians—is adequately reimbursed. But that may be easier said than done.

Technology will continue to evolve faster than the codes. As providers can do more thorough telemedicine and home monitoring, organizations will have to factor that into reimbursement—especially if the payers are still using a per-unit approach, says Witt. Currently, there are limited funds being used to support this type of care delivery. "There just isn't the money for that," Witt says.