General Motors Corp. is near a deal that would cut its hourly labor costs by more than $1 billion a year and reduce its $20 billion pledge to the United Auto Workers to cover healthcare obligations, said people familiar with the matter. GM expects to halve its remaining cash outlays for retiree health costs to about $10 billion, and supplement that contribution with a 39% equity stake in the reorganized GM. Cutting GM's healthcare costs is an essential part of the "controlled bankruptcy" plan the Treasury Department is formulating for GM.
Using simulators to train surgeons makes them quicker and better, according to a study by Danish researchers. The Copenhagen University Hospital team said the use of simulators should be part of the of the surgeon training process after monitoring the performance of 24 junior doctors. The researchers put the surgeons in two groups—one which had the traditional training of working alongside doctors and tutoring and another which supplemented this with seven hours simulator training. They found that those that used the computer simulators were twice as quick, taking just 12 minutes to complete the operation on a patient, and they also carried out better procedures according to a points system used to judge the quality of the work.
Created for USA Today by the Santa Fe medical information firm Qforma, a new database lists about 6,000 specialists in the treatment of high cholesterol, high blood pressure, diabetes and asthma from more than 300 communities across the coutntry. More doctors in other specialties will be added in coming months. The Qforma analysis attempts to track subtle differences in doctors' practice patterns that reveal, on a local level, which doctors most influence their peers. The project's goal is to offer consumers an innovative resource during the complex decision of how to choose a doctor, according to USA Today.
President Obama will announce that he has chosen Thomas R. Frieden, MD, the New York City health commissioner, as the next director of the Centers for Disease Control and Prevention, administration officials said. Frieden, an infectious disease specialist, has cut a high and sometimes contentious profile in his seven years as New York's health official commissioner. He led the crusade to ban smoking in restaurants and bars, pushed to make HIV testing a routine part of medical exams, and defended a program that passes out more than 35 million condoms a year. At the CDC, he will inherit a host of immediate and long-term problems.
The Medicare Recovery Audit Contractor demonstration project has come and gone, but many providers learned valuable lessons during the process. Consider the following advice from providers and other experts who have experienced RACs first-hand, and lived to tell about it.
One of the most important lessons Tanja Twist, MBA/HCM, director of patient financial services for Methodist Hospital in Arcadia, CA, learned from the demonstration project was the need to diligently track and monitor all correspondence to and from the RAC. "This goes beyond tracking the date you send or receive the actual documents (e.g., determination letters, medical record requests, and appeals) or send the medical records, but should include tracking the receipt of the documents by the RAC to ensure you are responding timely." Send everything via certified mail with a return receipt, she suggests. And make sure you are educating your entire facility—not just the mailroom—on what the RAC documents will look like so that correspondence will get to the right person or department. "Don't assume that because you are able to identify a recipient for correspondence that the RAC will get it right every time," she says.
Tracking appeals was the single most important way to survive a RAC audit because it allows you to prioritize your appeals, says Stacey Levitt, RN, MSN, CPC, director of patient care management at Lenox Hill Hospital in New York City. "This way you can spend your available time where you get the biggest bang for your appeal effort."
Having a strong physician advisor program—not just having the concept on paper, but an available and active physician participant reviewing and interceding when appropriate—is critical for surviving RACs, according to Yvonne Focke, RN, BSN, MBA, revenue cycle director at St. Elizabeth and St. Luke Hospitals in Covington, KY. "Having such an advisor strengthens your compliance program which is more defensible when appealing cases, especially once they reach the Administrative Law Judge," she says.
It's important for hospitals to regularly assess the effectiveness of their concurrent Medicare admission review processes, according to Joe Zebrowitz, MD, executive vice president for Executive Health Resources. Hospitals have to get the Medicare patient's status correct every time. Establish a strong utilization review plan that follows Medicare's Conditions of Participation. But a good plan does not solely ensure good results. You must make sure that the plan is being followed every day and that your case managers are using criteria to review all Medicare admissions and that every case that does not meet the criteria is undergoing a second-level review by a physician advisor, according to Zebrowitz. This physician advisor must be well versed in medical necessity regulatory guidance and use evidence-based medicine and risk stratification protocols to establish correct patient status. Your organization should also conduct retrospective audits on an ongoing basis to identify incorrect certifications from the past and self-disclose these errors, he says.
Remember that RAC contractors are authorized to refer cases for investigation to the OIG when fraud or abuse is suspected, says Nancy Beckley, MS, MBA, CHC, of Bloomingdale Consulting Group, Inc.
Take advantage of the 15-day rebuttal period prior to the actual appeals process, says Focke. "Even if only 10% of our cases were spared from this process, it was worth pursuing," she says.
Fran LaPrad, RHIT, CPHQ, director of health information at AdCare Hospital in Worcester, MA, had difficulty communicating with her RAC during the demo. LaPrad hopes communication will improve during the permanent program, but suggests you should follow up voice mail messages with official letters if you don't receive a phone call back within the allotted time.
Zebrowitz also calls out the importance of physician education and collaboration. Many physicians working in hospitals do not have a firm understanding of the regulatory guidance on inpatient versus observation status certification and, more importantly, the ramifications of getting the status wrong, he says. It is your hospital's responsibility to educate your physicians on the importance of documenting all of their concerns and findings in order to demonstrate medical necessity for all inpatient admissions. You also need to encourage strong collaboration between treating physicians, case management, and physician advisors as they work to correctly certify each Medicare admission, ensuring that your hospital will be in compliance with the law and reimbursed appropriately, says Zebrowitz.
The care management department at is becoming more and more important as the RAC program moves forward, says Focke. "Historically, care management departments have had a difficult time in justifying their existence because they were seen as a cost center that did not generate revenues," she says. "But the value of having a compliant program has escalated with the advent of RACs and other regulatory agencies."
If you have the capability, scan all documentation to and from your RAC (including your medical records), says Twist. As you move through the appeals process, you will find that having the documents stored electronically will ease the process, she says.
Last month, the Boston Globe reported that many lawmakers on Capitol Hill—who were "intent on containing the nation's spiraling health costs" while drafting healthcare reform legislation—were promoting the "medical home" approach to providing quality healthcare. So, has its time finally come—or not?
A patient-centered medical home could be viewed as a place to attach all types of healthcare concerns. In speaking to a forum sponsored by the Alliance for Health Reform and Commonwealth Fund last fall, Robert Berenson, a senior fellow at the Urban Institute of Washington, said that policymakers seem to be hanging on the medical home idea "everything that they want to improve the health system."
That could mean many good things, Berenson said: "Better attention to diagnosing, treating alcoholism and depression, or doing shared decision-making—being more attentive to health disparities." But it could also mean that "soon you start hanging everything on this model and it dies of its own weight."
It appears he may have been on to something. In a report out this month from theAnnals of Family Medicine, researchers with a two-year American Academy of Family Physicians demonstration project, said their early analysis "raises concerns that current demonstration designs seriously underestimate the magnitude and timeframe for the required changes, overestimate the readiness and expectations of information technology, and are seriously undercapitalized."
They said they feared that with current assumptions, many demonstrations going on across the country may "place participating practices at substantial risk" that may jeopardize the evolution of patient-centered medical homes. These unrealistic expectations "may set up demonstrations and evaluations for failure."
Overall, change is hard enough, the researchers said. "Transformation to a patient-centered medical home requires epic whole-practice reimagination and redesign."
But there is hope. The AAFP demonstration shows that it is possible to transform a primary care practice into a patient-centered medical home that encourages partnerships with the patients.
To make it a go, they suggest:
Understanding that transforming a primary care practice into a patient-centered medical home requires "wholesale practice redesign" and continuous commitment to "enhancing the patient experience."
Realizing that transformation will likely include a variety of interdependent components, such as new scheduling arrangements, better coordination with other parts of the healthcare system, more point-of-care services, and development of team-based care, among others.
Developing and implementing an information technology infrastructure to support this transformation could be more difficult and time-consuming than may be initially anticipated. Information technology is currently underdeveloped to meet the needs of the patient-centered medical home, they said.
Realizing that transformation involves a shift from physician-centered care to a team approach—in which patient care is shared among office staff. In addition, rapid transformation could result in staff burnout, turnover, and financial distress.
Moving toward the patient-centered medical home model is a developmental process that can take up to five years to achieve. Those that successfully transform are highly dependent on local conditions that affect healthcare practices and their surrounding healthcare system.
In the headlong rush for widespread implementation of patient-centered medical homes, "it will be important to continue to learn from the change process and how it evolves," the researchers said. So, in the natural scheme of things, it will take a little time until we will be able to call medical homes our home sweet home.
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Tampa-based WellCare Health Plans, Inc., on May 5 agreed to enter a deferred prosecution agreement with the United States Department of Justice and pay $80 million in restitution and forfeiture in order to avoid healthcare fraud charges. The agreement left open the opportunity for the feds to prosecute individuals involved in the case.
After an ongoing investigation, more than 200 special agents and investigators from the FBI, OIG, and the Florida Medicaid Fraud Control Unit raided WellCare offices, according to a DOJ press release.
The investigation and subsequent raid arose from allegations that WellCare falsely and fraudulently inflated expenditure information submitted to the Florida Medicaid and Healthy Kids programs from mid-2002 through 2006.
In order to avoid healthcare fraud conviction, WellCare must abide by several DPA requirements, including:
Consenting to the civil forfeiture of $40 million, as well as an additional payment of $40 million in restitution to the Florida Medicaid and Healthy Kids programs
Retaining and paying an independent monitor, selected by the U.S. Attorney's Office, who will review and monitor business operations
Continuing to cooperate with the government's ongoing federal and state criminal investigation of former WellCare executives and employees
Implementing, within 60 days, updated policies and procedures to ensure accurate reports of federal and state healthcare program information
Continuing to develop and operate an effective corporate compliance and governance program that includes adequate internal controls to prevent recurrence of any improper or illegal activities
The fact that the DOJ included a provision requiring WellCare to cooperate with the government's investigations of individuals says that those individuals will likely face criminal charges, says Steve Miller, JD, chief compliance officer for Capital Health System in Trenton, NJ.
"(The DPA) doesn't waive the government's right to pursue individuals, it just says they will not prosecute the corporation," he says. "They likely will be prosecuting individuals or they wouldn't have bothered putting that [requirement] in there."
The DOJ often uses DPAs to avoid putting a company through prosecution, which would likely lead to the company going out of business. The goal of a DPA is to acquire restitution and hold people accountable for their actions, in hopes the company will improve its practices going forward, Miller says.
"The government doesn't want to take a corporation the size of WellCare and put it out of business," he says. "A lot of innocent players would be affected by that."
When I finished last year's column about Congressional intervention to stop the proposed 10% cut in physician reimbursements, I hoped that I would never again have to write one of those Medicare-payments-are-about-to-be-cut-and-time-is-running-out articles. It looks like I got my wish, for now.
For seven years, the sustainable growth rate formula that attempts to control Medicare spending growth has called for exponentially larger cuts to physician reimbursements. And for seven years, an intense lobbying effort, complete with warnings about physicians dropping Medicare patients, has led Congress to intervene (usually at the last minute) to prevent the cuts from actually going through.
Because several delays have compounded the problem, physicians were looking at a 21% cut in reimbursements for 2010, based on the SGR formula. The Obama administration made it clear early on that this wasn't an option, and Congress inserted provisions into the budget resolution to make sure physician payments don't decrease.
That's the good news.
The problem is that the current approach is almost identical to previous solutions. It provides $38 billion to cover the cost of freezing payments at current levels through 2012, but doesn't address the underlying issues with the SGR formula that cause this recurring problem.
Once again, it is a Band-Aid on a gaping wound that is growing larger every year. The only difference so far is that Congress didn't wait until the 11th hour this time.
There is hope, however, for a more permanent fix. Health and Human Services Secretary Kathleen Sebelius has acknowledge the importance of an SGR fix and suggested that it may happen outside of the budget process. "I don't think there's any question that the physician [payment] fix has to be done," she said at a press briefing.
Although the budget is filled with several healthcare-related changes, it is just one piece of what looks like a three-part approach to healthcare reform. The first was the American Recovery and Reinvestment Act, and the final piece looks like it will be healthcare reform legislation that Congressional Democrats are promising to vote on by the end of the year, and possibly introduce as early as next month.
There's a reason SGR changes are being saved for last. Coming up with an alternative won't be easy.
The SGR formula was introduced to keep Medicare costs under control by setting an overall target amount for spending and adjusting the fee schedule based on that goal. That's still a high priority given recent estimates that Medicare Part A will become insolvent by 2017.
Any solution will have to keep costs in check, which means we probably won't see drastic physician payment increases. If we do, additional funding will have to come from somewhere. The more likely scenario is that reimbursement increases for one specialty will be offset by decreases for another specialty, or savings in another area of Medicare.
That's not a big enough change for many physicians. But considering the potential 21% payment reduction in 2010, followed by 5.5% cuts in 2011, 2012, 2013, and 2014, it is better than the alternative.
And like I said, I'd rather write about something other than pending Medicare cuts for the next five years.
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A recent front page story in the New York Times finally made official what hospitals and the physician recruiters who work for them have known for years: America is running out of primary care physicians.
Why is the well of primary care doctors running dry? Because a growing number of medical school graduates are taking the R.O.A.D. to success—they are selecting Radiology, Ophthalmology, Anesthesiology, Dermatology and other "ologies" over family practice, internal medicine, and pediatrics. The income and the lifestyle offered by surgical and diagnostic specialties simply trump anything that primary care affords.
In a recent survey Merritt Hawkins & Associates conducted on behalf of The Physicians Foundation, some 9,000 primary care physicians were asked what they would do if they could start their careers over. Forty-one percent said they would choose a surgical or diagnostic specialty, 27% said they would choose not to be a physician, and 5% said they would choose a non-clinical role in medicine. Only 27% said they would choose primary care.
That we need to renew interest in primary care among medical students is only made more apparent by current healthcare reform plans, which emphasize prevention, EMR implementation, and standardized care. It will take a robust and willing supply of primary care doctors to achieve these measures, as the Obama administration has acknowledged.
It would be a mistake, however, to grow the supply of primary care doctors at the expense of surgical and diagnostic specialists. The medical home, and other concepts to enhance the pay and prestige of primary care physicians, will create as many problems as they solve if they are imposed on the backs of medical specialists. Paying primary care doctors more by cutting reimbursement to specialists is not the answer.
The reason is simple. Just as there is a growing shortage of primary care doctors, there is a shortage of specialists in many areas. Fifteen medical specialty organizations have published reports projecting national shortages in their disciplines, including specialties such as gastroenterology, general surgery, cardiology, medical genetics, neurosurgery, dermatology, child psychiatry, and various other pediatric subspecialties.
The number of specialists trained in the last two decades has increased only marginally, even though many medical school graduates are choosing specialty medicine over primary care. The overall number of physicians coming out of residency each year has remained virtually flat since the mid 1980s. During that time the population has grown by millions, with the highest growth rate among the elderly who drive the need for specialty care. Demographic trends and the increasing technical sophistication of medicine will accelerate the need for specialist physicians for years to come.
Cutting the income of specialists and limiting their clinical autonomy through standardized treatment protocols will significantly raise the bar of entry into fields where the bar already is set extremely high. Those with the ability to excel through four years of college, four years of medical school, and four or more years of training—and who then can go on to perform life saving procedures—should be highly rewarded.
In the effort to promote primary care we should acknowledge that there are no bad guys. We need more primary care doctors. We also need more specialists. Whatever the healthcare system looks like after reform, it should create an environment where both types of physicians can thrive.
Phillip Miller is vice president of communications for Merritt Hawkins & Associates, a national physician search and consulting firm and an AMN Healthcare company. He may be reached atpmiller@mhagroup.com.
Managed care contract negotiations tend to focus on financial and legal issues, but overlooking the effect of medical management on payer contracts could jeopardize your financial viability. To ensure that managed care contracts line up with your organization's financial goals, give one of your physicians a seat on your contracting team.
"I very much encourage doctors to participate in negotiations," says Randi Kopf, RN, MS, JD, principal of Kopf HealthLaw, LLC, in Rockville, MD.
Although practices send administrators, coders, and managed care directors for outside training in negotiating contracts, the majority of physicians don't involve themselves in contracting even though payer representatives know physicians have the final say.
In a tough economic environment, "what physicians bring to the table is the ability to look a payer in the eye and say, 'Enough is enough,' " says Reed Tinsley, CPA, CVA, CFP, principal of Reed Tinsley & Associates in Houston. Physician owners can articulate better than anyone in the practice that the organization's viability is threatened by a payer's existing reimbursement structure.
However, not everyone agrees that physicians need to participate actively in negotiations. Because they're the decision-makers, physicians are sometimes better conciliators than negotiators, says John M. Edelston, president of HealthPro Associates, Inc., in Westlake Village, CA. "You want to be able to say, 'I don't know if I agree with that. I need to go back to my physicians,' " Edelston explains. "When a physician is involved, you can undermine the group's ability to negotiate the best deal you can."
"You have to have an agreement before you go into negotiations that you have clearly defined roles," adds Susan Stone, MBA, president of Managed Care Analysis in Redwood Shores, CA. A medical director's advice on medical trends can be invaluable, "but you don't want to undermine the chief negotiator, and that's the person who talks about rates," Stone says.
This article was adapted from the May 2009 issue of The Doctor's Office, a HealthLeaders Media publication.
