Health care reform in 2015: You do have choices

January 16, 2015

If you feel like the practice of medicine is becoming more complicated and that the government and the payers are out to get you, you are not alone, nor are you paranoid. In this article, we examine a few of the issues you are currently facing and some of the choices you have to make.

If you feel like the practice of medicine is becoming more complicated and that the government and the payers are out to get you, you are not alone, nor are you paranoid. In this article, we examine a few of the issues you are currently facing and some of the choices you have to make. Remember, you do have choices, whether they involve the size of your practice, practice setting, or even your participation in Medicare. 

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For starters, Medicare has officially moved away from incentive payments when it comes to programs like EHR meaningful use, e-prescribing, and the Physician Quality Reporting System (PQRS). Medicare recently announced that 48% of eligible physicians will begin to see a 1% reduction in Medicare payments for services on or after Jan. 5, 2015 for failure to meet EHR meaningful use requirements. An additional 28,000 health care providers will face a 2% reduction for failing to meet both the meaningful use and e-prescribing program requirements. For those of you who received a letter in December that the penalty is coming, you have until the end of February to appeal.

The next penalty/bonus is beginning next year for larger groups based on activities in 2014. Smaller groups will start in 2017 and will be based on activities in 2015. We focus on 2017 in this article, as this will be the first year that all practices are affected by the value-based payment modifier and because your actions in 2015 will be the basis of your penalty or bonus. The table below provided by Medicare reflects payment adjustments for 2017 and their basis.

The table includes not only penalties, but also a few potential bonuses noted under the value-based modifier; however, no group is eligible for a bonus unless they successfully report PQRS.

Next: Medical necessity denials rising

 

Medical necessity denials rising

Medical necessity in documentation has become a target for both government and commercial programs. Regardless of practice size, 2013 and 2014 saw a steady increase in medical necessity denials and requests for review of medical records. The increased hassle of getting paid for services rendered under the increased record review is a common complaint.

Payment rules, such as local coverage decisions and prior authorization, also increase your burden to navigate a successful path to payment. We were anticipating the development of complicated billing rules when we incorporated Physician Reimbursement Services 25 years ago. The degree of complexity we are now dealing with has exceeded our expectations.

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And the list goes on. In total, it is hard not to be depressed looking at 2015 and the practice of medicine beyond. However, it’s not all gloom and doom. In fact, the future still looks good for urologists. Some of you may remember the gloomy HMO go-go days as well as the Clinton administration, when the feds accused docs of fraud. The practice of urology has survived both of those challenges and incomes continued to rise.

Many we have spoken with around the country have made or are in the process of making major changes in how, where, and for whom they are practicing medicine. Remarkably, “why” physicians practice urology still remains, from a clinical perspective, largely intact. A recent survey by the Western section of the AUA indicated that 78% of urologists are mostly or totally satisfied with the clinical practice of urology, while only 6% are mostly or not at all satisfied with urology (16% of respondents were right in the middle).

Neither of us has met a urologist who agrees with all the policies and changes in the practice of medicine. However, we have seen many who take action and appear to be confident they are moving in the right direction. Some have made choices they are not comfortable with and plan to make additional changes. Change has been a constant in health care. Although we have not seen a magic bullet or solution that will work for all, we wanted to share a few approaches to the current chaos in hopes that you will find a path that allows you to continue doing what you love. One thing we can say for sure is that your current options are being determined by the setting in which you practice. The changes occurring in the delivery of health care are different in each geographical area and may affect your choices.

Group together or sell out?

At this point, the most common response for a solo practitioner or a small or medium group to the changes in health care is to sell or become an employee of a hospital or large multispecialty group. Others are selling to competitors or merging with others to form larger groups.

Large groups generally provide more administrative assistance and will remove some of the burden from the provider so one can go back to practicing medicine. There are other advantages, including greater financial stability, increased contracting abilities, and greater marketing presence. As we have worked with groups around the country, we have seen many successful shapes and sizes. The more a group acts like a truly integrated unit of individuals with a common goal, the more successful-both financially and professionally-the practice should become.

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Bigger is not always better. Unfortunately, joining a group or becoming an employee does not automatically solve your problems and comes with its own pressures and problems. As you can see in the table, groups are under greater pressure financially to meet the administrative burdens of health care reform. Joining a large group also means contending with multiple different personalities and goals of physicians and staff. If you become part of a large group, you must still be interested in the group’s bottom line, for interests in the groups must be aligned if you are going to remain in the group and with your current or improved salary.

Some large groups lack expertise in billing, collections, organization, and/or other best practices. Do not let these inefficiencies trickle down to you. We have worked with many groups that, with a few tweaks to processes, corrections of misconceptions, additional education, and/or a renewed focus on training, have increased revenue between 10% and 20%.

Next: Staying the course

 

Staying the course

Many practices we have worked with have chosen to meet these challenges with their current business construct. This does not mean they have not made changes. Actually, many groups in this category are making significant changes to meet current challenges, but choose to do it with those they have worked with for years, whether in a solo practice, small group practice, or large practice.

Practices have taken many different approaches to these issues, including:

  • adding new staff to help address certain parts of the practice

  • increasing focus on partnerships with other multispecialty or primary care groups

  • pursuing hospital subsidies

  • increasing the focus of compliance

  • contracting with consultants to address specific areas of need

  • hiring temporary CEO or planning assistants

  • hanging protocols for compliance with PQRS

  • adapting protocols to meet the administrative issues surrounding EHRs.

Geography and the competitive shape of the market play a big role in these decisions. Many of these groups have market presence and reputations that can be capitalized on. The ability to maintain the small-business feel of the small-to-medium-size practice may provide a big market advantage in a geographic area dominated by a large provider.

Single practitioners and small group practices are not dead! But as noted, small groups may need more help with their administrative burdens. Whether addressed through better hiring or the assistance of outside consulting services or increased administrative time for the owner, the small practice has to take into account the requirements and, if they choose to compete, commit the necessary resources to succeed. Weigh your options, measure your prospects, and jump in with both feet.

Experts in the administrative side can also help with meaningful use, implementing EHRs, etc. Remember, you are a specialist and you have seen the mistakes that primary care providers make in treating urologic diseases. Look at your business the same way. Focus on what you know and acquire assistance to tackle those items that you don't.

Consider ‘niching’ options

We use the term “niching” to encompass a number of practice options. But in general, this requires scaling back the practice in either full revenue goals or in number of services offered.

In this category, we include opting out of contracted health care and Medicare or reducing the number of contracts and becoming non-par with Medicare. While a “cash” practice still encompasses a very small percent of the market, those who have successfully revised their practice to limit or eliminate insurance agreements, don’t necessarily report higher revenue but often indicate they are happier, less pressured, and love the ability to practice at their own pace.

Other practices or providers have elected to move into a treatment specialization either in disease or patient mix.

Not all moves in this category move a practice or a group out of the requirements for health care reform; however, practices and providers in this group have simplified to allow them to focus on smaller, more manageable issues.

Conclusion

We realize we discussed only a few options that are available to urologists in the face of health care reform. We also realize that many providers feel that the choices they have are between “bad” and “not as bad.” Of course, whatever choices you are faced with in today’s market, we can guarantee that your options will change again.

We have found over the years that urologists focused on good clinical urology, practiced in a consistent manner with concern for the patient, will always attract patients regardless of setting. To run a successful business in a form chosen by the practice, your practice must add planning, organization, communication, and commitment to quality clinical care and good business practices. We have seen it and believe.

The information in this column is designed to be authoritative, and every effort has been made to ensure its accuracy at the time it was written. However, readers are encouraged to check with their individual carrier or private payers for updates and to confirm that this information conforms to their specific rules.

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