Little Health Law Blog

RISING OPPOSITION TO ACA IMPLEMENTATION

July 17, 2013 | Little Health Law

Steve Brenton, President of the Wisconsin Hospital Association, released a forceful judgment of the Obama Administration’s decision to delay by at least one year implementation of the Affordable Care Act’s (ACA) employer mandate, calling it a “dogs breakfast.” As reported in the Milwaukee Business Journal, Brenton cited five very negative consequences he believes the delay will achieve:

– The delay energizes ACA opponents and reinforces to an already skeptical public the view that implementation will likely be uneven at best and a ‘third world experience’ at worst”;

– The delay “raises obvious questions” about the possibility of delaying other provisions, including the individual mandate, which Brenton said seems likely to be another casualty in the coming months;

– The delay will cost the federal treasury $10 billion in fines and penalties according to Congressional Budget Office projections;

– What he called a “meltdown of mandates” lessens the probability that new coverage will climb to anywhere near the numbers the Obama administration predicted in 2009 when touting the law and;

– The decision adversely impacts the viability of the insurance exchanges, which are foundational to the ACA.

The ACA requires companies that have 50 or more full-time equivalent employees to provide health insurance coverage that is “affordable” to their employees and meets minimum value standards. Under ACA rules, coverage is “affordable” if an employee’s share of premium costs for employee-only coverage is less than 9.5% of yearly household income. The minimum value standard is met if the health plan’s share of the total costs of covered services is at least 60%. The reporting requirements for employers (to demonstrate whether and how they meet these and other ACA requirements) have left company decision makers shaking their heads in frustration about how to meet the law’s requirements. The delay is intended to give government officials more time to sort it all out, apparently. According to Mark J. Mazur of the U.S. Department of the Treasury, by virtue of the delay, employers will not be required to make any shared responsibility payments until 2015.

Kathryn Johnson of the IRS Office of Associate Chief Counsel (Tax Exempt & Government Entities) authored a guidance document to provide “transition relief through 2014 for the information reporting and Shared Responsibility Provisions. The guidance document states that “proposed” rules for reporting requirements are expected to be published this Summer, and further explains:

This relief will provide additional time for time for dialogue with stakeholders in an effort to simplify the reporting requirements consistent with effective implementation of the law. It will also provide employers, insurers, and other reporting entities additional time to develop their systems for assembling and reporting the needed data. Employers, insurers, and other reporting entities are encouraged to voluntarily comply with these information reporting provisions for 2014 (once the reporting rules have been issued) in preparation for the full application of the provisions for 2015. However, information reporting under §§ 6055 and 6056 will be optional for 2014; accordingly, no penalties will be applied for failure to comply with these information reporting provisions for 2014.

July 16, 2013. Efficiency in practice, an InHealth Company, features Kevin Little’s Guidelines for Physician Review of Health Plan Contracts.

July 16, 2013 | Little Health Law

Efficiency in practice, an InHealth Company, features Kevin Little’s Guidelines for Physician Review of Health Plan Contracts.

Real Health Care Reform: Reduce Our Need for Third-Party Payers

July 3, 2013 | Little Health Law

Nationwide there is much consternation and debate about what sort of “healthcare reform” might cure our health care system’s many ills, its growing price tag in particular. Of course, there is no shortage of answers and opinions about possible solutions or improvements. To be sure, the issue is highly complex, so there is room for much concern and debate. But since quality of health care is indisputably better than ever, it is important to focus on what actually needs to be reformed. The health care itself is good – what needs to be reformed is how we pay for and how we reduce the need for health care.

That the root cause of many of our health care system’s woes is a broken third-party payer system is difficult to deny. Rather than healthcare provider and patient conducting a simple economic transaction – one party provides care, the other party receives and pays for it – our healthcare system’s current payment methodology requires involvement of a third party insurer (or other “payer”) with a powerful financial interest in the provision of health care, no real ability to evaluate the patient and her health needs, yet strong influence in decisions affecting how or what health care is provided. While the patient wants (and expects) the doctor to provide medical judgment and care, she wants (and expects) someone else (the payer) to pay for it.

Before World War II, this horrible dynamic — a third party paying medical bills and influencing medical decisions — did not exist as it does today. With the advent of “health care insurance” as an employer-sponsored benefit to compete for employees, the American consumer’s mentality about health care began a transformation that led to the current consumer’s mindset: “who will give me health care”? Or, “where is the health insurance to which I am entitled?” This entitlement thinking drives the third party payer system and increases health care consumption.
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July 1, 2013. Medical Association of Georgia presents for its 7,000 member physicians Guidelines for Physician Review of Health Plan Contracts, prepared by Kevin S. Little.

July 1, 2013 | Little Health Law

Medical Association of Georgia presents for its 7,000 member physicians Guidelines for Physician Review of Health Plan Contracts, prepared by Kevin S. Little.

The EHR Improvements Act: a Bill to Exempt Solo and Retirement-Age Physicians From Meaningful Use Medicare Penalty

June 27, 2013 | Little Health Law

The “EHR Improvements Act,” a bill (HR 1309) recently introduced by Rep. Diane Black (R-TN), would, if passed, mean that doctors close to retirement age might not incur Medicare payment cuts as a result of failing to implement an electronic health record (EHRs) system. Additionally, the bill would make solo practitioners exempt from the penalty for three years.

The issue addressed by the bill derives from the 2009 federal economic stimulus package. The American Recovery and Reinvestment Act of 2009 included new funding for health information technology. That funding included $17 billion to support incentives for doctors who adopt EHRs and can demonstrate they are using “certified” EHR in a “meaningful” way. The Medicare EHR incentive program was intended to incentivize health care providers to implement “meaningful use” of EHRs. The program, which began January 3, 2011, affords health care providers a way to receive up to $44,000 over five years in incentive payments. On the other hand, doctors who fail to meet meaningful use requirements will incur a penalty by way of a 1% reduction in Medicare reimbursement, per year, up to a maximum penalty of 5%. This penalty would create a substantial hardship for many physicians, particularly in small practices. The EHR Improvements act is apparently designed to mitigate that hardship.

According to the National Center for Health Statistics (NCHS) at the Centers for Disease Control and Prevention, data shows that older and solo physicians are lagging behind in EHRs adoption. According to NCHS’s research, about 50% of physicians age 50 and older have adopted EHRs; about 64% of doctors younger than 50 have used EHRs. NCHS’s research also shows that 29% of solo practitioners had adopted EHRs by 2011, whereas 60% of two-doctor practices had implemented EHRs; the EHR adoption rate climbs to 86% for practices with at least 11 doctors. One of the principal reasons for this outcome appears to be simple cost-benefit analysis: switching to EHRs is enormously expensive for most practices, so much so that the financial incentives for implementing EHRs (including the penalty for not adopting EHRs) do not offset the cost of converting to EHRs.
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Medicare Trust Fund Is Still Running Out of Money — Just Not as Soon As Previously Thought

June 2, 2013 | Little Health Law

On May 31, 2013, the Boards of Trustees of The Federal Insurance and Federal Supplementary Medicare Insurance Trust Funds (Boards of Trustees) issued the most recent report (the “Report”) on the financial condition of the U.S. Medicare Program. The Board of Trustees oversees the financial operations of the Medicare Part A and Supplementary Medical Insurance (SMI), which is Medicare Part B and D. The Social Security Act requires the Board of Trustees to report annually to the Congress on the financial status of the Medicare Program. The Report is 280 pages packed heavily with information and actuarial data analyzing the crippled patient, the U.S. Medicare Program, concluding that the Medicare Hospital Insurance Trust Fund will not run out of money until 2026, two years later than the last projection. The slightly improved forecast (from the prior report) is due apparently to slower growth in U.S. health care costs, according to current the Board’s analysis.

But whether and when the Medicare Program will go broke is apparently not possible to determine with reasonable certainty. There are too many variables. The Board, comprising or advised by the best the best minds on the subject, have said as much. The Board concedes in the Report:

Projections of Medicare Costs are highly uncertain, especially when looking out more than several decades. One reason for the uncertainty is that scientific advances will make possible new interventions, procedures, and therapies. Some conditions that are untreatable today will be handled routinely in the future. Spurred by economic incentives, the institutions through which care is delivered will evolve, possibly becoming more efficient. While most health care technological advances to date have tended to increase expenditures, the health care landscape is shifting. No one knows whether these future developments will, on balance, increase or decrease costs.

The Report, p. 2.
The Report further indicates that the ACA “The ACA introduced even larger policy changes and projection uncertainty. . . . This legislation [the ACA] contains roughly 165 provisions affecting the Medicare program by reducing costs, increasing revenues, improving benefits, combating fraud and abuse, and initiating a major program of research and development to identify alternative provider payment mechanisms, health care delivery systems, and other changes intended to improve the quality of health care and reduce costs.” Id.
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A Viable Solution For Doctors and Patients to the Third-Party Payer Mess: Concierge Medicine

June 2, 2013 | Little Health Law

The concierge practice of medicine is the wave of the future. This is very good news for the American consumer and tax payer.

As the price tag for Medicare has increased, so has the pressure on federal lawmakers to do something to avoid the looming fiscal disaster that attends rising health care costs. Since the U.S. Taxpayer demands that Medicare costs somehow be contained while, ironically, the U.S. Voter (same person, different hat) views Medicare as a sacrosanct entitlement to consume health care, the lawmaker “solution” has thus far focused the cost-cutting pressure on the supply side of health care, including cutting physician reimbursement. See, e.g. The Plea for Repeal of the Medicare Sustainable Growth Rate, May 4, 2013 post, this Blog. The trend of private insurers and other non-government payers is to follow what Medicare does (at least with respect to setting physician reimbursement rates and billing rules). An unintended consequence of the downward pressure on physician reimbursement together with modern health care’s increasing red tape/regulation and associated costs and headaches has been to drive primary care physicians out of private practice altogether. They are fed up. Many doctors have found (or are looking for) hospital employment. Others have retired. This trend has been referred to as the “silent exodus” of physicians and threatens to profoundly impact patient access care in a negative way. See National Survey Points to a “Silent Exodus” of Physicians, Merritt Hawkins, September 24, 2012.

Thankfully, some physicians are discovering that the concierge practice of medicine can be a smart, rewarding way to own and operate a private medical practice as a business that, rather than suffering the severe strains of the third-party-payer model, is free to actually focus on practicing medicine. For many doctors, the concierge medical practice model is returning private practice to its correct state — a real practice of medicine, medical judgment and care that is patient focused and free from the intrusion into the business of rendering care that a commercial or governmental third-party payer necessarily creates.
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Money-Making Tip for Physicians: Develop/Utilize Good Contracting Protocol With Health Plans

June 1, 2013 | Little Health Law

Some health plans would have doctors believe that all terms and conditions in health plan contracts are immutable. That is not true. Health plan contract language can and should be negotiated under some circumstances. All physicians are strongly cautioned against blindly signing health plan contracts or any “paper work” that comes across your desk concerning rates, charges, reimbursement or network participation on the assumption that you have no choice. All physicians should be vigilant about establishing an organized contracting methodology that will identify contract issues that may warrant concern and discussion with a health plan representative about possible language changes. There is strength in numbers: the more physicians proactive about negotiating health plan contract provisions, the more effective all physicians will be in contracting with payers.

The contracting guidelines below are recommended to physicians and their office administrators as a starting point for establishing effective contracting protocol for medical practices. Where there are particular concerns about the potential effect of contract language, there is no substitute for obtaining legal advice.

1. Reject the premise that health plan contracts are non-negotiable.

You can negotiate health plan contract language. If you assume all health plan contract language is a take-it-or-leave-it proposition, you will necessarily be unable to determine what particular provisions a health plan might be willing to negotiate with you.

2. Develop and follow a specific office contracting protocol.

Readiness is the first step to good contracting practices. Set up, then faithfully use, a plan for your office, to include the following elements:

• appoint a trusted, long-term employee to be responsible for contracting • systematically collect, organize and store all health plan contracts and all correspondence and notices from the health plans
• carefully read every contract (or, at a minimum, have your appointed employee do so) against a Contract Review Checklist (see below), and list any questions or issues of concern • monitor all contracts — most are evergreen and will automatically renew unless one party terminates or proposes modification • know when contracts expire, calendar expiration dates and deadlines for giving any required notice of cancellation
3. Establish strong rapport with a health plan representative.

You will accomplish much more if you are dealing with an individual you know and with whom you have good rapport. Good practices to develop rapport with health plan representatives include the following:

• have face to face meetings with the representative when possible • be prepared for all meetings with the representative • remember that you are negotiating a relationship not a transaction • as much as possible, channel contact with a health care plan through one person in your office and one with the health plan • train the health plan representative to believe that you are reasonable (by, for example, periodically making small language proposals)
• differentiate your practice – the health plan needs to want your participation • demonstrate that you do things professionally
4. Realistically assess your ability to negotiate a provision.

Various factors influence whether and to what extent a health plan will negotiate particular contract provisions. Before you raise an issue with a health plan, assess your negotiating position.

• What is the value of the contract to your practice?
• What percentage of your business does the health plan represent?
• Do the fees cover your true cost of doing business?
• Are the health plan’s administrative requirements realistic?
• Does the health plan steer patients to you?
• What is the impact of dropping a plan on referrals – do you need to stay in plan because referring doctors will also refer patients from good plans?
• What are the strengths of your practice that might make you more attractive to the health plan?
• Do you add value to the health plan’s network (e.g., you are the only specialist within so many miles).
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Physicians Brace: the Changing Insurance Landscape Under Georgia’s ACA Insurance Exchange

May 28, 2013 | Little Health Law

In Georgia, seven insurers have announced plans to participate in the Health Insurance Exchange that will exist by virtue of the Affordable Care Act (ACA). The ACA authorized creation of State health insurance “exchanges” (HIX) – an online market place in which consumers can shop for and buy health insurance. The following insurers have indicated they will participate in the Georgia HIX: Blue Cross and Blue Shield of Georgia, Kaiser Foundation Health Plan, Peach State, Alliant, Coventry, Aetna and Coventry. The insurance plans will debut as part of the Georgia HIX in 2014.

When the health insurance plans are available, small businesses, families and individuals will have a new way to get insurance. The ACA intends for consumers to be able to compare the benefits and costs of competing plans and use an online calculator to assist them in determining which plan is best for them. The ACA will expand health insurance coverage, increasing the number of insured patients. Presently, nearly two million non-elderly Georgia residents are uninsured. Purported benefits of the ACA that will affect Georgia patients and providers include: greater ease in obtaining coverage for individuals difficult to insure due to pre-existing conditions; continued cost-saving home- and community-care programs;greater resources for Medicaid, lowering costs of prescription drugs and raising reimbursement to some health care providers; enhanced preventive care coverage; and allowing young adults to stay on parents’ health plans
For physicians, however, more insured patients under the auspices of the ACA is not all good news. While much remains to be seen, some problems have been predicted. For example, some physicians may experience delayed payment under the ACA, under which individuals have a three-month grace period to individuals who have not paid their premiums. Health plans may hold off on processing claims who have not paid for two months. After three months, a health plan may deny claims and leave the doctor to seek payment from the patient. Under traditional insurance, the health plan would remain liable to pay the doctor even if the premium has not been paid. Patients are not accustomed to keeping up with and paying insurance premiums. Further, under the ACA the patient may be able to sign up for another plan in the HIX and begin seeing another doctor. Many of the newly insured patients will also be individuals who have not had insurance before (or for a considerable time) and may therefore involve more complicated health issues.
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The Plea for Repeal of the Medicare Sustainable Growth Rate

May 4, 2013 | Little Health Law

doc pic.jpg The American Medical Association (AMA) and numerous other medical associations, including the Medical Association of Georgia (MAG), are a strong voice for repealing the Medical Sustainable Sustainable Growth Rate (SGR). Led by the AMA, a very large group of influential medical associations wrote Congress late last year advocating that the SGR is “an enormous impediment to successful health care delivery and payment reforms that can improve the quality of patient care while lowering growth in costs.” The call for repealing SGR is increasingly strong and urgent.

SGR is the method used by the U.S. Centers for Medicare and Medicaid Services (CMS) to set Medicare reimbursement rates for doctors with a formula purportedly tied to economic growth. The SGR issue derives from a well-intended but seriously flawed attempt to curb federal spending. Pursuant to the Balanced Budget Act of 1997, CMS employs SRG as a method to ensure yearly increases in Medicare expenses do not exceed increases in the level of growth in the U.S. Gross Domestic Product. Under the SGR scheme, if spending increases more than a set level, physician payments are adjusted downward; if spending is below a set level, rates are increased.

At first, the SGR formula arguably worked – to a degree – but only while the U.S. economy grew. After the US economy stalled in 2002, SGR number crunching changed for the worst as Medicare expenses exceeded projections, a trend that has continued. As a result, virtually every year for the last decade there has been a risk to physicians of very significant cuts in Medicare reimbursement rates required by law. Rather than repealing or revamping SGR, however, Congress has repeatedly effectuated a last minute, legislative patch “fix” to avert a crisis, deferring a permanent solution for future political wrangling. For example, with the latest “fix,” the American Taxpayer Relief Act of 2012, Congress delayed a 26.5 percent cut in Medicare physician payments for one year. The Congressional Budget Office projects that physician payments under Medicare will be reduced by about 25% in January 2014. Again, some fix will be needed, as the cuts would cause many medical practices to close, denying patients access to medical care. The recurrence of this political issue continues to frustrate physicians in a big way. Many have left the Medicare program; others threaten to do so. Access to medical care is thus diminished, contrary to the essential purpose of Medicare.
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