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Healthcare Reform Puts Vise Grips on Physicians

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   April 17, 2014

To say doctors are under tremendous pressure may be the understatement of the year. One key indicator to how well they are navigating the healthcare system is reimbursement.

This article appears in the April 2014 issue of HealthLeaders magazine.

When the enrollment period opened for the new health insurance exchanges in 2013, it was a signal to physicians that a key element of the Patient Protection and Affordable Care Act had, indeed, arrived and would start to play out in their waiting rooms this year. Other changes providers are now contending with include the implementation of ICD-10, public disclosure of any financial gain doctors receive from drug and device manufacturers because of the Physician Payments Sunshine Act, and attesting to meaningful use requirements. All of this is happening against the backdrop of an evolving industry in which physicians are facing an influx of more patients with insurance coverage but without annual limits or preexisting condition clauses.

To say physicians are under tremendous pressure may be the understatement of 2014. A key metric to assess how well physicians are navigating the healthcare system is reimbursement.

"The pressure everybody is experiencing, to a large degree, is revenue related," says Armin Ernst, MD, president and CEO of Worcester, Mass.–based Reliant Medical Group, an independent multispecialty physician group with more than 250 doctors at 20 sites in central Massachusetts. The practice has 106 primary care physicians and 150 specialists.

A cornerstone of PPACA is to get healthcare costs under control, which means moving away from a fee-for-service reimbursement system and replacing it with one that rewards quality and outcomes. It's a transition welcomed by most physicians, but alternative payment models are still relatively new and many organizations are treading carefully. For example, in Massachusetts, a state often lauded as a healthcare pioneer, FFS remains the dominant payment method used by commercial insurers. According to a 2013 report from the state's Center for Health Information and Analysis, while state-based payers have implemented some alternative payment methods, only one national payer was participating in an APM model in Massachusetts. The rest relied on FFS.

This means in Massachusetts, and elsewhere, providers are stuck navigating two payment arrangements, if they venture out to be part of an alternative payment model at all.

"It is very difficult to have your feet in two different worlds and to maintain the divide," explains Ernst, who believes the physician of the future needs to prepare for more scrutiny now in order to survive financially.

"There's less money around," says Ernst. "We all have to do more with less, and we've all recognized that quality has to be a significant driver in how we're getting paid."


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Jacqueline Fellows is a contributing writer at HealthLeaders Media.

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