Don McDaniel

Just last week, the CMS Office of the Actuary published its analysis of the recently passed “Patient Protection and Affordable Care Act." This analysis was developed at the request of Representative Dave Camp, R-PA, and summarizes the Office of the Actuary’s estimates of financial and coverage effects through fiscal year 2019.

This analysis was delivered, of course, after the passage of the PPACA as amended by the “Health Care and Education Reconciliation Act of 2010,” and presents a future-state picture that may not be that pleasing to physicians, particularly physicians operating in small, independent practices. The source of potential concern revolves around a couple of compelling findings by the Office of the Actuary.

First, and problematic for anyone in and around the U.S. healthcare system, the analysis notes that national health expenditures under health reform will increase by over $300 billion by the end of the decade.

Second, the analysis finds that the cost of expanding coverage will be largely covered through fairly dramatic cuts to the Medicare program, totaling almost $600 billion through 2019. This is an issue for a number of reasons important to the viability of physician practices, not the least of which is pressure that such cuts will place on Medicare physician reimbursement. This could make the recent debate over a 21 percent reduction in payments an everyday nuisance, especially in the face of demographic trends that indicate outsize enrollment growth in Medicare over the next half-century.

Third, about one-half of the new insurance enrollment created by health reform will come through expanded eligibility for Medicaid; “an estimated 18 million would gain primary Medicaid coverage as a result of the expansion.” (page 3) The analysis goes on to further suggest that such coverage expansion, given physician participation in Medicaid, will do little to provide actual expanded access to health care.

This notion seems to be consistent with the experience in Massachusetts, which has seen expanded coverage in the face of static (at best) physician supply. To this point, wait times for primary care services have grown substantially since the landmark Massachusetts reform was implemented in 2006.

Finally, all signs point to this legislation creating a tougher road for small business, including physician practices. These exacerbated hardships will take the form of potential penalties, increased administrative requirements, and a continuation of raising premiums that disproportionately affect small business.

If I was a conspiracy theorist, I might conclude that there’s an all-out assault on the great American physician-entrepreneur!

Articles

Just last week, the CMS Office of the Actuary published its analysis of the recently passed “Patient Protection and Affordable Care Act”. It presents a future-state picture that may not be that pleasing to physicians, particularly physicians operating in small, independent practices.

Tougher for Physicians Under PPACA

Many of the readers of Practice Notes are members of or affiliated with small physician practices - physician organizations of 10 physicians or less. As you are now undoubtedly aware, the U.S. government is making a 

, as a major component of the American Recovery and Reinvestment Act, to support the adoption of electronic health records. 

EHR adoption is still very low in the United States, especially among smaller practices. Therefore, to facilitate the adoption and the achievement of meaningful use of these EHRs among small practices, the Office of National Coordination for Health Information Technology (ONC) has now designated some 60 Regional Extension Centers (REC).

The mission of the RECs are to help primary-care physicians, small practices, and safety-net providers such as community health centers, rural health centers, and critical-access hospitals, through the provision of consultative support and advisory services to enable successful development of EHR systems, and ultimately achievement of meaningful use. 

The REC program funding will create technical extension centers throughout the U.S., and each REC will target approximately 1,000 to 2,000 physicians. They are chartered to be vendor agnostic and to provide unbiased guidance - that is to say that they will not promote any specific application over others - with a goal of helping the smallest of practices manage the work flow and business process challenges of achieving meaningful use. 

In total, the federal goal is to assist 100,000 physicians nationally by the end of 2012. Each REC will have access to a newly created, federally funded health IT research center - meant to act as a knowledge management hub and disseminator of best practices to the individual RECs and its clients, the physicians. The RECS will be moving to full operating status within the next six months and a list of each REC, as well as information about the REC program, can be accessed at 

. I encourage all practices to reach out to their assigned REC to ascertain how it can help you on your health IT journey.


EHR adoption is still very low in the United States, especially among smaller practices. Therefore, to facilitate the adoption and the achievement of meaningful use of these EHRs among small practices, the Office of National Coordination for Health Information Technology (ONC) has now designated some 60 Regional Extension Centers (REC).

RECs to the rescue

I visited recently with a group of providers in southern California that are preparing to implement a new EHR system. The group is a large multispecialty practice with more than 150 physicians - all eligible professionals in Stimulus-speak - and derives a significant portion of its work and hence a lot of its revenue from treating Medicare patients. 

The CIO of the group asked me what they should expect in terms of 

pursuant to the HITECH Act of 2009’s ARRA - and I immediately said, “Well of course your physicians will all be eligible, and likely for the maximum incentive payment of $44,000 per eligible professional over five years.”

He looked at me like I had two heads, and commented that almost all of its Medicare revenue comes from treating Medicare Advantage (MA) participants. Then it hit me: Does HITECH treat MA providers differently than providers that participate with the original Medicare program? 

I had to research this - and found to my utter disbelief that the answer is yes. The process to qualify for incentives as a provider to Medicare recipients under several MA contracts is much more stringent than what we’ve come to learn about Medicare eligibility.

You see, if a provider doesn’t generate enough Medicare Allowable Charges (MAC) (from seeing “original” Medicare patients) to garner incentives because of the size and scope of their MA practice, they have to pass the 80-80-20 rule with 

 MA organization - essentially a commercial insurer that provides covered services to Medicare recipients under a contract with CMS. 

In other words, they have to be nearly exclusive with one organization that pays 80 percent of their overall MA payments, perform at least 80 percent of their overall Medicare business with MA patients, and practice in a clinical setting at least 20 hours per week. 

So, the MA portion of the incentive really only applies to treating essentially exclusively one MA Organization’s (MAOs) patients. For example, a payer-organization like Kaiser Permanente comes to mind. Never mind that many physicians with MA practices have contracts with multiple MAOs. 

One question is why was the bill written this way? Could have been that it was an oversight, so in the rush to get the bill released in February 2009, details were missed or left out. A conspiracy theorist might contend that since the current administration has made no secret of its disdain for the MA program, this slight is just a manifestation of a policy desire. 

Nonetheless, it stands that a number of hardworking physicians will be affected by this hole. So what can you do if you’re affected by this? You need to mobilize all available advocacy resources at your disposal to make a collective voice heard that CMS has to develop a methodology that recognizes your standing as a Medicare provider, regardless of the source of your revenue from that program. May the force be with you!

Does HITECH treat MA providers differently than providers that participate with the original Medicare program?

The eligible provider that stimulus forgot

I’ve spent the past few weeks attending a number of healthcare information technology meetings focused on achieving interoperability in healthcare - so-called eHealth. You see, we have a major trading partner issue in healthcare - even if we gave every physician and hospital in America an EHR, all we would achieve are a group of discrete applications that don’t share information by and between them. 

In other words they won’t be able to communicate with each other. This is a real problem - a real practical problem because unfortunately, because consumers, of course, attend care givers widely and without attention to what information system they use! 

So, there’s been a lot of discussion about how to facilitate all these disparate systems to connect, communicate, and make the amalgam (the integrated data) information that is actionable. 

The Institute of Medicine (IOM) reports that about 1.5 million patients are injured each year because of adverse-drug events; events that presumably could be eradicated if we have true mission-critical healthcare information sharing. 

While at the 

, I saw a number of applications built and positioned for mobile devices - and this makes perfect sense in a world which is quickly becoming hardware- and even appliance-agnostic. These applications include a number of mobile phone applications to enhance disease management services and even review images remotely. We should be prepared for the integration of mobile systems. 

At the 

annual meeting in DC, I learned about a number of functioning local information exchanges, mostly led by large Integrated Delivery Networks. For example, Boston HealthNet with it anchor tenant Boston Medical Center, has developed a health exchange that includes the BMC hospitals and eight to 10 discrete community health centers (FQHCs), allowing clinicians access to real time medication history for any patient seen throughout the system. This is one of what is today a limited group of operating health information exchanges; what I’ve described at BMC is really still an isolated HIE, but the promise is evident and I think the train has left the station. 

I encourage you to do your homework, and seriously evaluate opportunities to pursue and engage a health information exchange. By the way, if you are a provider, and even if you plan to purchase an EHR, you will not be able to achieve meaningful use in the later adoption years without a relationship with a health information exchange. Food for thought.

I’ve spent the past few weeks attending a number of healthcare information technology meetings focused on achieving interoperability in healthcare - so-called eHealth.