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 Government Affairs Newsletter, Jan 2011

Tort Reform

Workers Compensation: New York

Insurance Coverage: New Jersey and New York

Independent Payment Advisory Board (IPAB)

Physician EMR use passes 50% as incentives outweigh resistance

Special Feature: Accountable Care Organizations to be imposed in Massachusetts over the next 5 years - From Bruce M. Leslie, MD (Mass.)

Tort Reform - From New York County Medical Society
Phil Gingery, MD (R-GA), an obstetrician-gynecologist, introduced H.R. 5690, the "Meaningful End to Defensive Medicine & Aimless Lawsuits (MedMal) Act of 2010.’’ This legislation has 29 cosponsors. The bill would:

• Establish a three year statute of limitations (one year if injury is discovered later)
• Establish early offer rules
• Reform collateral source rules
• Shield benevolent gestures
• Enact a fair share rule
• Reform punitive damages awards
• Reform expert witness standards
• Shield stronger state laws

In late March 2010, the Missouri Supreme Court ruled that the state’s medical liability damage award cap, which was enacted in 2005, cannot be applied retroactively to patients injured prior to the law taking effect. The Missouri State Medical Association supported the ruling, as it keeps caps on non-economic damages awarded in medical liability cases intact. Similar caps on non-economic damages were struck down as unconstitutional by both the Georgia and Illinois Supreme Court in early 2010.

Workers Compensation: New York - From New York County Medical Society
Effective December 1, 2010, the NY state Workers Compensation Board approved a 30% increase to the Evaluation and Management services fee schedule. Also effective, the NY State Workers Compensation Board outlined the required use of the Medical Treatment Guidelines which has become the mandatory standard of care for the mid and low back, neck, shoulder, and knee for dates of service on or after December 1, 2010.

Insurance Coverage: New Jersey and New York
New Jersey Senate Bills 1742 and 1743 are being held in the Senate’s Commerce Committee after a May 27, 2010 hearing. Both pieces of legislation have significant implications on plastic surgery: 1742 requires a health care provider participating in carrier network to give notice to a covered person of a provider’s referral to out-of-network provider; 1743 establishes a waiver, rebate or payment of insured’s deductible, copayment, or coinsurance by health care practitioner as a form of insurance fraud subject to criminal and civil penalties. Currently, no action has been scheduled on either bill.

New York enacted legislation requiring no-fault insurance carriers to compensate surgeons and other health care providers for emergency services provided to patients regardless of whether they were injured when driving while intoxicated. After several years of advocacy activity by surgeons and the College, and numerous vetoes by numerous governors, the surgical community achieved this victory in late July.

Independent Payment Advisory Board (IPAB) - From ASPS
A bill intended to "remove unelected, unaccountable bureaucrats from seniors' personal health decisions by repealing the Independent Payment Advisory Board" was recently introduced into the U.S. Senate by John Cornyn (R-Texas).  Supported by Sens. Jim Bunning (R-Ky.), Tom Coburn (R-Okla.), Orrin Hatch (R-Utah), Jon Kyle (R-Ariz.), John McCain (R-Ariz.), Pat Roberts (R-Kan.), and Roger Wicker (R-Miss.), S.B. 3653 is the Senate version of an independent payment advisory board (IPAB) repeal bill introduced earlier this year in the U.S. House by Rep. Phil Roe, MD (R-Tenn.). That bill, known as the Medicare Decisions Accountability Act of 2010 ( H.R. 4985), has 55 cosponsors and has been referred to the House Energy and Commerce Committee for further debate and consideration.

Physician EMR use passes 50% as incentives outweigh resistance - From AMA
Age demographics of doctors and financial assistance to help them adopt the technology are responsible for the transition, analysts say

For the first time, a majority of office-based physicians are using an electronic medical records system, according to a survey by the Centers for Disease Control and Prevention's National Center for Health Statistics. The survey doesn't explain why EMR use in offices rose to 50.7% in 2010, more than double the adoption rate in 2005. However, peer pressure is apparently moving from fighting EMRs to embracing them. "We're in an electronic age. You either go with it, or you're in the Dark Ages," said Pat Willis, RN, chief nursing officer for seven-physician Big Sandy Healthcare, in eastern Kentucky, which installed its first EMR in July.

Special Feature: Accountable Care Organizations to be imposed in Massachusetts over the next 5 years
By Bruce M. Leslie, MD (Mass.)

Everyone understands that our present health care system is untenable. Providers and institutions are expected to do more with less while patient expectations remain unchanged. The government sets the tone by demanding more services for less money while state governments and insurance companies are doing everything they can to cut expenses and healthcare payments. The result is that we spend far too much of our GNP to support a system that is inequitable and inefficient.

In an effort to restrain the escalating cost of health care many are turning to the concept of an Accountable Care Organization (ACO). The concept depends on 3 key attributes: organized care, payment reform and performance measurements. The performance measures are a key component and are supposed to help the providers guarantee and improve the care that is provided. As simple as the concept might be, the implementation will be tricky. There are a number of stakeholders involved in the conversion to an ACO not the least of which is the patient. The patient will need to be educated and then accept that there will be imposed limits on the care they can receive. Limitations in care will necessitate revisiting the issue of medical liability. Doctors will need to find a way to share income with hospitals. The issue of referrals, something that is of crucial concern to surgical specialists will need to be addressed. Doctors and other health care providers will need to be incentivized. Needless to say, these complex issues have delayed the implementation of ACO’s in all but one state. Beginning in 2011, the Commonwealth of Massachusetts is expected to propose legislation that will roll out ACO’s across the state. By 2016 the Massachusetts legislature expects that 90% of the health care in Massachusetts to be integrated through an ACO.

What is driving the push for ACO's in Massachusetts is the exploding unrestrained cost of health care. Arizona, Wisconsin and Texas have either cut back or are in the process of cutting back on covered services. Other states will soon follow. In Massachusetts healthcare spending accounts for OVER one third (37%) of the state budget. This is up from 21% in 2000. The numbers are staggering. In the last 3 years Medicaid grew by $2 billion. Since 2006 there has been a 24% increase in the number of people enrolled. The continued growth of Medicaid and other health care costs is forcing cuts in other state services.

The biggest component of Massachusetts healthcare spending is Medicaid. As part of the Federal Stimulus Package, Massachusetts has had 62% of its Medicaid expenses reimbursed by the Federal government. Beginning in July 2011 that contribution will drop to 50% and the Commonwealth will either need to come up with additional funding, curtail some covered health services and/or change reimbursement. The state legislators and governor recognize that they need to do something. That something is to change the way healthcare providers are reimbursed.

The following is a Question and Answer primer that was put together for the physicians of the Commonwealth of Massachusetts. The primer will give you more specifics on the history, implementation and anticipated problems associated with the creation of ACO's. Some of the questions are particular to Massachusetts, but can easily be extrapolated to your state.

Who can form an ACO?
Any large healthcare provider group can form an ACO, with hospitals and physicians being the most likely to do so. There is general concern among the physician community that hospitals will dominate the creation of ACO’s. Hospitals have the capital, the administrators and an increasing number of employed physicians. An ACO formed by physicians will need to contract with a hospital to control hospital admissions and coordinate care. If hospitals dominate the ACO’s, there is concern that hospitals will reap more of the anticipated savings and that physician’s income and independent status will decline.

Has this been tried around the country?
Medicare set up 10 carefully chosen pilot programs over the past 5 years. During the first year all 10 met quality goals, but only 2 were able to produce savings that would allow them to profit from the savings. After 3 years only 5 groups could produce savings that would allow them to share in the profits generated by the savings.  

Why are ACO’s and Global Payments of Concern to Massachusetts physicians right now?
In 2009 a "Roadmap to Cost Containment" was issued by the Massachusetts Special Commission on the Health Care Payment System (Health Care Quality and Cost Council or HCQCC). Quoting from the HCQCC website:

"The Roadmap thoughtfully outlines 11 key strategies to allow the Commonwealth to meet its goals of sustainably containing cost growth in health care as well as improving the quality of health care. The Roadmap states that all stakeholders in the Commonwealth must enact policies and changes to create a health care system that supports, encourages, rewards and augments health care system redesign and population health management in order to be successful and have the maximum impact on cost and quality".

Included in the roadmap was the development of "ACOs" as the basis for transitioning to a global payment structure for all commercial and public payors in the Commonwealth. A HCQCC subcommittee on Payment Reform will issue recommendations that will form the basis of legislation that is expected to be filed in January 2011. Governor Deval Patrick and the Mass state legislature have stated payment reform is a priority in the upcoming legislative session.

What is the anticipated timetable for implementation of ACO’s and bundled/global payments?
According to the Massachusetts Health Care Quality and Cost Council (HCCQC) draft on decision points:

At least 25% of all patients in the commonwealth shall obtain integrated health care services through an ACO under global payment by July 2012;
- 40% by July 2013,
- 60% by July 2014,
- 80% by July 2015, and
- 90% by July 2016.

At least 20% of all expenditures for integrated health care services in the commonwealth shall be under global payment methodology by July 2012,
- 40 % by July 2013,
- 65% by 2014,
- 85% by July 2015, and
- 95% by July 2016

How would it impact PHO Physicians?
Transition to an ACO with some form of global risk would result in the PHO physicians being more directly responsible for the overall cost and quality of care for a cohort of patients. This patient population would most likely include the commercial HMO and POS (point-of-service) patients who have a PHO.

It is unclear how the PPO patient population would be treated under an ACO and global risk model. These patients are not required to formally select a PCP and typically choose this type of product since they want greater freedom of choice in their providers and where they access care. The freedom of choice associated with a PPO is seemingly inconsistent with an ACO. These patients could be assigned to an ACO in a manner similar to how Medicare will assign its beneficiaries. We do have some precedent in doing this given our current Pay-for-Performance contracts that incorporate PPO patients based on a PCP attribution model.

HMO/POS/PPO patients not in a PHO primary care practice would not be included in the hospital ACO, but rather would be included in the ACO of their primary care physician. This may not affect primary care physicians, but would affect medical and surgical specialists who receive referrals from outside our primary care network. It would probably also affect the income of hospital based specialties that depend on in-hospital studies, lab tests, referrals or consultations. Depending on how the final legislation is written, it is conceivable that under an ACO model, these patients would not have the freedom to go outside their network and access care from our hospital specialists.

Will the elimination of fee for service really bend the cost curve and eliminate incentives to do procedures that add cost but do not improve health care?
Maybe. Maybe not. High cost pharmaceuticals and imaging add greatly to the cost of health care and in most cases do not add to a doctor’s personal income. Self-referral may be an issue, but self-referral is not being used as the reason to switch to ACO’s. Savings will be realized by withholding care, but withholding care can only be supported with appropriate high quality studies. Since such studies are rare doctors will continue to rely on clinical judgement, which will probably vary based on the doctor’s experience.

Who is on the Health Care Quality and Cost Council (HCQCC)?
By statute, the HCQCC has 15 members. On the HCQCC are representatives of the Patrick administration, health care economists, insurers, hospitals, and one physician, Dr. Tom Lee, representing Partners Health Care Systems. Partners is the largest healthcare system in Massachusetts and includes the Massachusetts General Hospital and the Brigham and Women’s Hospital.  Because of its clout Partners Healthcare also commands a higher reimbursement than most other physician groups in Massachusetts. The executive committee also consists of Dr. Judy Ann Bigby (Chair) and secretary of the Massachusetts Executive Office of Health and Human Services; Joseph Lawler (Vice Chair), a Certified Employee Benefits Specialist, Beth Capstick (Treasurer), and Tom O'Brien.

Who represents doctors on the HCQCC?
Prior to her appointment as Secretary of Health and Human Services, Dr. JudyAnn Bigby was the Medical Director of Community Health Programs at Brigham & Women's Hospital. Tom Lee, MD is CEO of Partners Community Healthcare, Inc. The Massachusetts Medical Society is not represented on the executive board, but is a member of the HCQCC Advisory Board, as is Dr. Gene Lindsey, Atrius Health (a large multispecialty group practice based in the Boston area), and Dr. John Lentini, a family physician. Dr. Lentini is the only community based private practice doctor on the executive board of the HCQCC.

What will happen to specialists in an ACO?
According to Elliott Fisher, MD who coined the term ACO: "They will spend more time thinking about how to improve the quality of care of the patients in their population." Right now no one seems to know if a specialist will be able to receive referrals from outside their ACO; that will depend on how the final legislation is written. Specialists would obviously like that to happen, but it would make ACO cost control more difficult.

How is this going to be different than capitation?
According to the Massachusetts Payment Reform Commission that started this whole process, the key difference between global payments and capitation include: a careful and thoughtful transition period; robust monitoring of results; performance measures linked to patient-centered care; improved risk-adjustment tools; and improved health IT tools. "There is much more data available to us today than even 10 years ago." This sounds good, but a cynic would note the problems we have measuring quality measures, the shortage of primary care physicians, the legislature’s apparent rush to implement ACO’s and incompatible computer systems.

Is Malpractice Reform a Part of the Legislation?
Succinctly: No. Dr. Judy Ann Bigby, the Secretary of the Massachusetts Executive Office of Health and Human Services, recently told the Boston Surgical Society that malpractice reform was not going to be part of this legislation. The physician community, however, is urging the HCQCC to include medical liability reform when discussing payment reform. There is a real concern that unless patients accept the limitations inherent with managed care doctors will be even more vulnerable to malpractice suits. Whether or not malpractice reform is included will depend on how the final legislation is written.

Do patients know what is being planned?
Probably not. There have been many articles and stories about the high price of health care. There have been many public meetings discussing how health care costs are unsustainable. The concept of ACO’s has been published in local papers, but specifics have been few and far between. Patients are unaware of how an ACO may change the way they receive their health care. In Massachusetts, right now, there is no organization that is publicly challenging the desire of the HCQCC to implement ACO’s over the next 5 years.

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