Thank you @scottnelsonlive for featuring us on #Medsider today! Hear the interview here: #ACO http://medsider.com/interviews/accountable-care-orgnizations-interview-jeffrey-cohen-florida-healthcare-law-firm/
Most readers know that the federal Stark Law deals primarily with matters involving physician
self referral. The state equivalent, the Florida Patient Self Referral Act of 1992, has provisions that are even tougher than the Stark law. For instance, the Stark law allows some physicians to refer to renal dialysis centers in which they have an ownership interest, but the Florida law does not. Fresenius, a provider of renal dialysis services, filed suit seeking a declaration that the federal law (and not the state law) should control on the issue. Since there are several key areas where state law is more stringent than federal law (e.g. supervision requirements and ownership of entities that don’t provide “designated health services”), many eyes were on the court. Instead of giving Fresenius a pass and saying “Florida can’t make it tougher than what the federal law says,” the court stated that the federal laws do not preempt (supplant) the state ones.
Since the Stark Law does not preempt the state law and since the state law does not violate the U.S. Constitution, business people and professionals will have to make sure that both layers of compliance (state and federal) and solidly in place.
It is estimated that health care fraud is a $60 billion a year business fueled by illegal conduct such submitting false claims and paying kickbacks to physicians and suppliers. Until recently, if large health care organizations were the targets of fraud investigations, these companies, as their penance, typically wrote a big check to the government and continued business as usual. Things have changed.
While indicting and convicting health care executives is not a new practice, officials at the Department of Health and Human Services (“DHHS”) and the Department of Justice (“DOJ”) are said to be frustrated with the frequent occurrence of repeat violations and they are ramping up their strategy. Lately there have been aggressive new initiatives rolling out to combat rampant health care fraud and the government is increasingly bringing criminal charges against executives even if they were not complicit in the fraud scheme, but could have stopped it if they had known.
What’s more striking is that in addition to civil monetary penalties and criminal indictments, the government is taking great efforts to exclude convicted executives from being involved in companies that do business with federal health programs. A recent bill introduced to Congress under the name of the “Strengthening Medicare Anti-Fraud Measures Act of 2011 (the “Act”), increases DHHS’ existing powers and allows them to seek to exclude owners, officers and mangers of companies that are convicted of health care fraud from federal healthcare programs even if they left the company prior to any conviction of the entity.
In addition to the expansion of the permissive exclusion afforded by the Act to DHHS, regulators and law enforcement officials are going to be increasingly utilizing current permissive exclusion remedies. DHHS’ bold move appears to be based on the rationale that the permissive authority of Secretary of DHHS or the Office of the Inspector General of DHHS to exclude individuals is a much easier process than criminal proceedings.
The impact of this aggressive new government strategy will likely have even further reaching consequences for convicted healthcare business owners and executives. For instance, an exclusion from being part of a business that works with federal health care programs would be a career ending blow for most executives. It should also be emphasized that smaller organizations are not in any way immune from enforcement activity. In fact, with newly increased enforcement budgets, authorities have the means and the time to target organizations of all sizes.
Law makers and regulators are hopeful that by ramping up the enforcement of existing laws and expanding the scope of DHHS’ power, it will act as a powerful deterrent against overt acts and will compel corporate executives to take proactive steps in preventing fraudulent activities and affirmatively addressing fraudulent practices when discovered. It is vitally important now more than ever, to have an active compliance program in place. A strong compliance program can not only detect and prevent fraudulent or negligent activities but also will typically be considered as a mitigating factor if an organization is culpable of fraudulent activity. The Florida Healthcare Law Firm works with health care organizations of all sizes to assist in the audit, development and implementation of effective compliance programs.
We have probably never seen so much enthusiasm and spending on anything in our history as we are on healthcare reform. The point is to slow spending and improve quality by incentivizing cost-saving, quality-enhancing behavior. And the Accountable Care Organization is the new healthcare delivery model designed to save us from our greedy, over-utilizing selves. Here’s how it works:
First, you take a lot of primary care physicians and tell them they will get more money by (1) taking an expanded role in taking care of patients, and (2) reducing the expenses associated with that care. Then you tell them two really special things: first, you tell them “Uh, since we’re afraid that you will improperly reduce the amount of care the patients need, we won’t tell you which patients are in an ACO and which are not.” Second, you tell them “We really mean it when we tell you that we intend for you to make more money, but we won’t tell you exactly how we’re gonna do that. Trust us, ok?”
Second, you empower physicians to lead the charge. After all, they’re the only participants in ACOs that smart people think can control costs and quality. And you do this by telling them to (1) shell out about $26 Million to form an ACO, (2) go to Wharton and get an MBA, (3) educate themselves about all the intricacies of information technology and work out the kinks involved in implementing electronic medical records, and (4) keep taking care of those patients while you do all this. Finally, you keep the identity of patients secret from the physicians so there is no way to prepare care plans that take into account the diseases faced by the patients. No problem.
Third, you let patients run amok. They can go into an ACO…or not. They can go in and out of ACOs. They’re like kids that way, but they’re responsible for reading the 397 pages of ACO regs and then deciding whether they like the idea of not. Oh, and they have absolutely no incentive to sign up for ACO care. And why would they? “Hey, how about you go with this ACO, which will get more money if they spend less on you. How’s that sound?” How could this possibly be sold to Medicare patients? “This ACO will get paid for getting you well! Your primary care doctor that you’ve trusted for 20 years and who helps you get and stay healthy…that person doesn’t have the same incentive to get you well.” NOT.
Simplicity. There is none. Never before in our history have we seen something so simple (patient rationing) become so complicated (rationing = less expensive care). And so many acronyms and governmental departments and positions too! There are one sided models, two sided models and now a Pioneer model, for those who are especially adventurous. And did I mention that the basis for healthcare reform, the one that only the state of Washington has the courage to articulate, is really just rationing?
Troubling to pretty much everyone. Yes. Except for policy makers, there has yet to be any significant support for anything other than the IDEA that healthcare should cost less and be more outcome oriented. Even the Mayo, Geisinger and Cleveland systems have all politely declined at this point.
Unlimited flexibility. Yes, this is true, especially as it relates to patients. See, patients can be in a cost saving ACO or not. They can go in and out of them and the ACO will bear the cost. That’s right: patients can go in and out of them—ACO, non-ACO, and yet only the ACO will be penalized for cost increases. Let’s see, the ACO model is the cost saving model. And the plan is to allow patients to choose for society to save money or not. And the patients have zero incentives for participating in an ACO. And who is responsible for the behavior of these patients? Uh, well, we all are.
Patient accountability. This is completely lacking in the ACO model. There is absolutely nothing to incentivize patients for making healthy decisions and to punish them for making unhealthy ones. Also primary care driven. Not really. There aren’t enough to go around, but some guy who knows a doctor is free to see you now. Oh, also pro competitive, meaning everyone will wanna be an ACO, so that will create competition in the market and a tremendous drive to drive costs down and quality up. Ok, not really, but wouldn’t it be nice if that COULD happen. In fact, healthcare reform is functioning to do one sure thing—reduce competition, since only the biggest, strongest organizations can afford to compete or to be one.
Inexpensive. Nah. While the initial cost projections suggested about a $2 Million price tag for forming one, they are now up in the $12 to 26 Million range.
Direct and demonstrative. NOT. The entire healthcare reform delivery plan is like pushing a mouse through a maze by its tail.
Healthcare reform is like Alice in Wonderland at its best. It only makes sense on mind-altering drugs. Moreover, the shizo message from our policymakers on the whole issue is dumbfounding. “We are committed to lowering healthcare costs. ACOs will do this. Patients can be in them…or not.” Some legislators think they’ve created a panacea with ACOs, but then don’t want to compel them. It’s just political nonsense.
Look, slowing healthcare cost creep and quality enhancement are good things. We all (patients included) ought to be outcome driven and focused so that the end result is actually healthcare. ACOs just don’t and won’t do that, which may have something to do with the recent announcement by Mayo, Cleveland and Geisinger that they’re really not that interested in playing with them.
Policymaker: Well, we’re pretty excited about these ACO regs
Reporter: These ACOs are really supposed to lower healthcare costs and improve quality?
Policymaker: You bet. We really believe in them. It’s the a common sense model that is primary care driven.
Reporter: So, then I suppose all the Medicare patients are gonna be in them, so that we get the cost reduction and health benefits?
Policymaker: Ummm, no. We don’t want to require that. We want to design the perfect system, but we don’t want to require anyone to use it.
Reporter: Why not? If you believe in it, why not just implement it?
Policymaker: It’s not American to require people to do anything.
Reporter: That’s confusing. What’s the value of having spent so much time and money on the perfect system if it isn’t actually implemented?
Policymaker: Oh, it will be! Trust me, when Medicare patients see the value of being in a healthcare delivery model that makes more money by reducing the amount spent on care, they’re gonna flock to it.
Reporter: How will you know?
Policymaker: Great question. We’re gonna track it. We’re gonna assign the patients to an ACO and then watch the cost fall and the quality rise.
Reporter: How is the patient gonna feel about being assigned to an ACO, one where maybe their physician isn’t even participating?
Policymaker: Oh, no problem at all. Good care is good care. We think the physician patient relationship is overrated.
Reporter: Really? It seems so personal and essential.
Policymaker: Not really. We just think that. We’re not even gonna tell physicians who’s in an ACO or not?
Reporter: Why not?
Policymaker: Cause we think physicians might prefer the money from reducing costs over helping people get well.
Reporter: So you think paying physicians for saving money will cause them to provide insufficient care?
Policymaker: No, we think paying them to provide really excellent care will drive costs sky high.
Reporter: So is the goal to reduce the quality of care?
Policymaker: No, just the amount of it, because the more you provide, the more it costs.
Reporter: Sounds like healthcare reform is about rationing.
Policymaker: (Laughs). Oh my, no! That would never fly. What we have to do is to make sure patients get exactly what they want and, at the same time, reduce costs.
Reporter: And ACOs will do that?
Policymaker: You bet. That’s the magic. By providing the perfect system and then by mixing it with patient choice and secrecy, we’re convinced we’ll see reduced costs and higher quality.
Independent practice associations (“IPAs”) are gaining momentum in response to healthcare reform and market changes responding to healthcare reform. In an era when consultants are selling one-size-fits-all solutions, physicians have to consider IPAs as a viable option once again, but they have to fine tune their expectation to recent changes.
In the thunderous noise wrought by talk about accountable care organizations (ACOs), physicians are scrambling to see where they might fit in the future of healthcare. While we think those changes will be neither as severe or as pervasive as feared, we do see huge opportunities for ANY organization which can (1) reduce healthcare expenditures, and (2) improve quality. Healthcare businesses of the future will view utilization skeptically. Hospitals of the future will look like medical practices with beds. Medical practices of the future will have a stake in the cost and quality of care being delivered and will view utilization skeptically.
Healthcare reform alone is enough of a Rubik’s Cube, but CMS and the OIG has been especially well-staffed these days, enough so that their offices are turning out new laws and interpretations at an alarming rate. Though it may seem overwhelming, physicians need to work harder than ever to stay on top of the changes.
Health Information Technology (HIT)
The physician incentive payments/penalty provisions that piggybacked their way onto the federal healthcare reform law have physicians concerned and scrambling. IT vendors and advisors are drawn to the opportunities the new law has created; and physicians need to be educated and wise.
The so called “HITECH” provisions of the federal healthcare reform law create a pot of about $34 Billion worth of incentive payments for eligible professionals and hospitals that attain meaningful use of certified electronic healthcare records (EHR) technology. To obtain any money, eligible parties will have to demonstrate full compliance no later than 2015, and earlier (2011!) if they want the full benefit. Medicare has allocated roughly $44K worth of incentives for each compliant physician; and Medicaid offers another $20K roughly, but the real incentive is not the money; it’s the fact that financial penalties apply if you don’t comply by 2015.
Financial incentives are available for eligible professionals who use certified HIT which satisfies the “meaningful use” regulations, which were issued August 2010. They are complex and limited by time lines which industry insiders claim to be unreachable. Vendors are, nevertheless, selling and physicians are buying software and solutions in hopes they will qualify for the incentive payments. Physicians should make sure that their contracts with such vendors protect them by requiring the solutions to be certified and meet the meaningful use guidelines.
Healthcare Reform
Though everyone is scared about how healthcare reform will unfold, remembering the past may help. The fact is the concepts in the Act are not new. For instance, IPAs, PHOs, capitation and the like are the cornerstone of the reform. Physicians have seen these before, though not on a government mandated basis. Moreover, where those models were once purely financial, there is a heavy clinical outcome component woven into the regulations.
No matter how one views it, the Act creates huge opportunities for physicians and others. Risk based compensated Accountable Care Organizations (ACOs) are slated to be the new platform for healthcare delivery. Good news for PCPs: regulators and think tankers think that physicians, especially primary care physicians, are the best positioned to lead the ACO development charge. That said, the form the ACOs will take is completely unclear and is expected to unfold over a period of ten years. Like technology vendors, physicians have to be wary of anyone who has something to sell at this time. One size does not fit all! IPAs might be a great vehicle to start. Capitated models are familiar, but a bundled payment methodology may work better in some circumstances. One thing that is certain: whatever business model a physician explores ought to be able to bear financial risk (e.g. capitation or bundled payments) and measure clinical outcomes, because both elements will form the basis of payments of the future. Though specifics about the future of healthcare are unavailable, the following is a fair list of what’s likely:
OIG and CMS Pronouncements
May was a busy month for healthcare regulators. SMS issues the Ambulatory Surgery Center Waiting Area Separation Requirements, which has had the effect of preventing creative business opportunities between ACSs and other healthcare businesses.
Additionally, the OIG recently issued an Advisory Opinion which makes it very difficult for imaging centers to do prior authorizations for referring physicians.
Fraud and Abuse
If the first 2/3 of 2010 are any indication of the future in healthcare law, healthcare business professionals have a lot to keep up with. Enforcement by the Justice Department and the Office of Inspector General is in full swing. Already, for instance, nearly $2 million has been repaid as the result of employing a person who has been excluded from a federal healthcare program. Examples include:
Read On at www.FloridaHealthcareLawFirm.com
