March 17, 2014

The Fast And The Dead

Submited by Mark Weiss, JD

Let's listen in to a series of calls from a potential deal partner to the office of the Smith and Jones Medical Group:

Receptionist: Good morning, Smith and Jones Medical Group.

Potential Deal Partner:  Good morning. May I please speak with Dr. Smith.

Receptionist:  I’m sorry, Dr. Smith is out.

Potential Deal Partner: Well then, may I please speak with Dr. Jones.

Receptionist:  I’m sorry, Dr. Jones is tied up.

Potential Deal Partner: OK. I’ll call back next week.

ONE WEEK PASSES

Receptionist: Good morning, Smith and Jones Medical Group.

Potential Deal Partner: Good morning.  May I please speak with Dr. Smith.

Receptionist:  I’m sorry, Dr. Smith is out.

Potential Deal Partner: Well then, may I please speak with Dr. Jones.

Receptionist:  I’m sorry, Dr. Jones is tied up.

Potential Deal Partner: OK. I’ll call back next week.

ANOTHER WEEK PASSES

Receptionist: Good morning, Smith and Jones Medical Group.

Potential Deal Partner: Good morning. May I please speak with Dr. Smith.

Receptionist:  I’m sorry, Dr. Smith is out.

Potential Deal Partner: Well then, may I please speak with Dr. Jones.

Receptionist:  I’m sorry, Dr. Jones is tied up.

Potential Deal Partner: Look, every time I call I ask for Dr. Smith and she’s out. Then I ask for Dr. Jones and he’s tied up. What is going on over there?

Receptionist:  Well, it’s actually very simple. Dr. Jones is extremely busy overseeing our staff working at four hospitals and every time she’s out, she ties up Dr. Jones. She can’t have him making decisions in her absence.

****

A silly little joke can illustrate a large problem.

If a medical group cannot govern itself, if it is structured like a true democracy, one owner, one vote on everything, or if it has a bloated board, it will never be able to make decisions with the speed required for its continued success. The market for medical services is changing rapidly. One of the tremendous advantages that an independent medical group has, unless it ties itself up, is the ability to make decisions quickly, to increase the pace of, in the words of the late strategist John Boyd, its loop of observation, orientation, decision and action. But many groups throw away that advantage out of the mistaken belief that their business is a club.

They become too slow, too confused and without business focus.

Proper governance is not just a goal, it’s a precondition to success, even to, in this market, continued business existence. Oh, you might be thinking that you got to where you are now with a 26 member board. But that’s like being a real estate agent in a booming market — you think you’re a genius salesperson when you’re simply riding a market wave. Yet now you’re on the edge of a precipice and it’s taking your group months to decide what color your new logo should be.

In today’s market, there’s the fast. And then there’s the dead.

______

Mark F. Weiss is an attorney who specializes in the business and legal issues affecting physicians and facilities on a national basis. He holds an appointment as clinical assistant professor of anesthesiology at USC’s Keck School of Medicine and practices with The Mark F. Weiss Law Firm, a firm with offices in Dallas, Los Angeles and Santa Barbara representing clients across the country. He can be reached by email at markweiss@advisorylawgroup.com.

March 12, 2014

Physician office front desk collections

Today, patients are responsible for much larger portions of their medical bills. Copayments are on the rise, as are coinsurance and deductibles. It’s not a stretch to say that patients’ financial responsibility is the largest it’s been since medical insurance came onto the scene in the mid-20th Century. If you’re relying solely on your business office to respond to this trend, you won’t be successful. Your patients are your worst payers – and asking them for money long after the fact will only result in higher postage costs and ballooning accounts receivable. Engaging your front office to perform time-of-service collections is essential for financial success.

Therefore, it’s an opportune time to execute these strategies used by medical practices that are successfully dealing with today’s reimbursement environment:

Set expectations. Develop a financial policy to distribute to patients when they arrive; make it available on your website, too. Hang tasteful but clear signage in the front office. Don’t beat around the bush by printing signs that say, “Our Practice Expects You to Pay Your Copayment.” Instead, be direct with signs that read, “Your Insurance Company Requires You to Pay Your Copayment.” Send the message professionally, but make it clear that you expect to receive payment at the time of service.

Know how to ask. There is an art to collections, and a large part is knowing how to ask for money. Instruct your staff to stop asking patients, “Would you like to pay?” Replace that request with “How would you like to pay today?” As they ask for payment, staff must make eye contact with the patient (or guarantor) and use his/her name during the conversation. Writing out the receipt while asking the question is a great tactic because it sends the message to patients that your practice expects payment.

Don’t forget the balance. Time-of-service collections include the amount owed for that particular visit – and that which is outstanding from a prior encounter. Don’t hold yourself to collecting past-due balances – ask for all balances, regardless of age. Print a statement for all patients at check out that reflects any payments they have made as well as the balance due. Giving these statements to patients at check-out is not only free (other than the cost of the paper), but it reinforces to them your expectations of getting paid. It also eliminates the excuse patients so often give to your business office: “I never received a statement.”

March 10, 2014

HIPAA - patient sign-in sheets or call out the names

Question:  May physician offices use patient sign-in sheets or call out the names of their patients in their waiting rooms?

Answer: Yes. Covered entities, such as physician’s offices, may use patient sign-in sheets or call out patient names in waiting rooms, so long as the information disclosed is appropriately limited. The HIPAA Privacy Rule explicitly permits the incidental disclosures that may result from this practice, for example, when other patients in a waiting room hear the identity of the person whose name is called, or see other patient names on a sign-in sheet. However, these incidental disclosures are permitted only when the covered entity has implemented reasonable safeguards and the minimum necessary standard, where appropriate. For example, the sign-in sheet may not display medical information that is not necessary for the purpose of signing in (e.g., the medical problem for which the patient is seeing the physician).

March 06, 2014

Multi-Million dollar settlement in Halifax Stark compensation case

Facing as much as $1.1 billion in damages and civil penalties and having already spent more than $15 million in legal fees, Halifax Hospital in Daytona Florida averted jury selection in its upcoming trial by reaching an $85 million tentative settlement with the Department of Justice, according to the whistleblower’s legal counsel.

If confirmed, the settlement would represent one of the largest Stark settlements in history, albeit well behind the $237 judgment against Tuomey Healthcare System last year—which unlike Halifax, gambled its case with the jury.

The settlement follows the federal court’s November 13 ruling that Halifax’s compensation of physicians violated the Stark Law’s prohibition against paying for Medicare referrals, even though the physicians were employees of the hospital and were paid from a pool in proportion to their personally-performed services.

The case, United States et al. v. Halifax Hospital Medical Center et al., Case No. 6:09-cv-Orl-31TBS, Fla. Middle Dist., arose when a Halifax compliance officer turned whistleblower and filed a qui tam action alleging that the hospital’s compensation of its six employed medical oncologists violated the Stark Law. At issue was the oncologists’ bonus formula.

The complaint alleged that Halifax had agreed to pay each physician a portion of an incentive pool equal to 15% of the “operating margin” for the hospital’s medical oncology program. The pool included not only the physicians’ billings for the professional services they personally performed, but also the fees earned by the hospital for the physicians’ referrals to the hospital. According to the court’s prior ruling, the fatal flaw, from a Stark standpoint, was the inclusion of technical component revenue derived from the oncologists’ own referrals—and the flaw was not remedied by the subsequent division of the pool among the physicians in proportion to each physician’s personal share of the group’s total professional service billings.

In constructing the compensation formula, Halifax had relied on an opinion from outside counsel that the bonuses “arguably” complied with Stark’s employment exception. However, the court ruled that the compensation of an employee cannot be determined in a manner that takes into account, directly or indirectly, the volume or value of the employee’s Medicare referrals to the employer. In this case, the court ruled, the physicians’ individual bonuses varied on the basis of referrals because bonuses were based on operating margin of the entire oncology program—including fees for hospital services—and that margin would be improved by the physicians’ referrals in addition to the services that they themselves personally performed.

The only proof of “referral” required by the court was the physician’s listing as “attending,” “operating” or “other” physician on UB-92 and/or UB-04 forms. With over 75,000 tainted claims totaling more than $34 million in Medicare referrals, Halifax’s settlement—if finalized—could avert the potential for a $1 billion adverse verdict after treble damages, $11,000 per claim fines and whistleblower’s attorney’s fees are added.

Years to partnership

Question: In recruiting new doctor to our physician group medical practice, how many years before they should be eligible for partnership in the practice.  Thanks!!

Answer: My recommendation is 3 years with a small buy-in after the three year period. It usually takes three years to get a financial return on this big investment. Most new doctors today are looking for smaller buy-ins - it's becoming a major recruiting issue in a lot of service areas and for a lot of specialties. Extending the employment period to three years before being eligible for ownership I think warrants a smaller buy-in.

Years to partnership

Question: In recruiting new doctor to our physician group medical practice, how many years before they should be eligible for partnership in the practice.  Thanks!!

Answer: My recommendation is 3 years with a small buy-in after the three year period. It usually takes three years to get a financial return on this big investment. Most new doctors today are looking for smaller buy-ins - it's becoming a major recruiting issue in a lot of service areas and for a lot of specialties. Extending the employment period to three years before being eligible for ownership I think warrants a smaller buy-in.

March 04, 2014

Another word about physician practice mergers

Is bigger better when it comes to private medical practices?  This is a question I get quite frequently from physicians who are considering whether to merge with other practices.  In my experience, the answer is almost always “yes”, but usually for different reasons from those the inquiring physician has in mind. 

Quite often physicians believe that the primary or only reason to merge is to gain leverage in negotiations with third-party payers.  Aside from the questionable legality of such a motive (think “antitrust”), this mindset misses the point.  In my opinion, the reason to become bigger is not to eliminate competition but rather to enable a practice to better compete in a complex and very competitive marketplace.  How does getting bigger make a practice more competitive?  To begin with, being bigger allows for spreading of risk.  In today’s healthcare environment, in order to be competitive, medical practices must make significant investments in human resources and information technology.  Where these investments might be difficult or impossible for a small practice, they are much less painful when spread among many physicians in a group.  Where a small practice might be able to afford only a part-time practice manager, a large practice might easily be able to afford an MBA level CEO.  The same holds true for legal and accounting resources, investment in compliance and strategic planning.  And, while being a bigger, more sophisticated “business” will not guarantee better third party reimbursement, quite often third-party payors are receptive to paying efficient, well-run practices more than they will pay high cost disorganized practices.

The above paragraph itemizes only a few of the potential benefits of practice consolidation.  Other possible benefits include increased patient access (i.e., more locations), practice succession, increased purchasing power, economies of scale found in consolidating redundant operations such as billing, and the potential addition of ancillary services that might otherwise be too costly of an investment for a small practice.

In my opinion, practices that want to remain private and thrive should actively be looking for strategic alliances, including merger where appropriate.  The rest of the healthcare marketplace is consolidating.  Those late to the game may find that the most desirable partners have already been taken.

February 28, 2014

New and Updated FAQs for the EHR Incentive Programs Now Available by CMS

To keep you updated with information on the Medicare and Medicaid Electronic Health Record (HER) Incentive Programs, CMS has recently added four new FAQs and an updated FAQ to the CMS FAQ system. We encourage you to stay informed by taking a few minutes to review the new information below.

https://questions.cms.gov/

New FAQs:

• For some of the eligible professional (EP) clinical quality measures (CQMs), there are look back periods or look forward periods for which data was not available. How are these CQMs calculated for the reporting period?

• Why does the result of the clinical quality measure for CMS140v2 not accurately reflect an accurate performance rate upon calculation according to the measure logic in the specification?

• In calculating the meaningful use objectives requiring patient action, if a patient sends a message or accesses his/her health information made available by their EP, can the other EPs in the practice get credit for the patient’s action in meeting the objectives?

• When reporting on the Summary of Care objective in the Electronic Health Records (EHR) Incentive Program, how is a transition of care defined and which transitions would count toward the numerator of the measures?

Want more information about the EHR Incentive Programs? Make sure to visit the Medicare and Medicaid EHR Incentive Programs website for the latest news and updates on the EHR incentive programs.

https://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/index.html?redirect=/ehrincentiveprograms/

February 26, 2014

How Employees can File Whistleblower Complaints under ACA

Employees are protected from retaliation for reporting alleged violations of the Affordable Care Act’s health coverage reforms (Title I of the Act) and for receiving a premium tax credit or a cost sharing reduction for enrolling in a qualified health plan. OSHA's Fact Sheet on Filing Whistleblower Complaints under the Affordable Care Act has been updated and is available in both English and Spanish. The revised fact sheet includes a summary of the Affordable Care Act, types of retaliation, coverage, and the process of filing a complaint.

To access the Fact Sheet in English:

https://www.osha.gov/Publications/whistleblower/OSHAFS-3641.pdf

To access the Fact Sheet in Spanish:

https://www.osha.gov/Publications/OSHA3712.pdf

February 25, 2014

Affordable Care Act 90-day Waiting Period for Coverage

Beginning 1/1/2015, the Affordable Care Act prohibits group health plans and group health insurance issuers from applying waiting periods exceeding 90 days. Under newly issued final regulations), (1) the phrase "waiting period" means the period that must pass before coverage can begin for an individual who is otherwise eligible to enroll under the terms of a group; (2) eligibility conditions based solely on the lapse of time are permissible for no more than 90 days, while other conditions for eligibility (not based solely on the lapse of time) are generally permissible unless designed to avoid compliance with the 90-day rule; (3) a plan's waiting period can begin on the first day after the employee satisfies a cumulative hours-of-service requirement, if the requirement does not exceed 1,200 hours; and (4) a requirement to successfully complete a reasonable and bona fide employment-based orientation period may be imposed as a condition for eligibility for coverage under a plan. According to the preamble, nothing in the regulations "requires a plan or issuer to have any waiting period, or prevents a plan or issuer from having a waiting period that is shorter than 90 days."