Sweeping heath care reform changes are coming, ready or not

June 1, 2010

Health care reform is what it is, and we have to learn to live with it for now and the foreseeable future. Currently, it is the law of the land.

You may not agree with the recently passed Patient Protection and Affordable Care Act of 2010, or certain parts of it. You may not agree with the way it was passed. You may not like the direction in which health care is headed.

With the renewed effort to fight fraud, significant pressure to cut costs, and strong movement to shift all health care into large delivery systems (accountable care organizations, bundled payments, etc.), your contracting, practice, and income are going to change. Expect to be paid less for each service you provide. In this new environment, there will also be opportunities for urologists, but they will take intelligence, organization, and initiative.

Intensified anti-fraud efforts

The new law puts more teeth into fighting fraud by doubling the fine to $50,000 per incident and decreasing the burden of proof; the government no longer has to prove intent. Many are concerned that it will be "back to the Clinton days" for physicians. Dust off your compliance plans and prepare to spend time analyzing your coding and documentation practices, even if you are using an electronic medical record.

Decreasing income

The new legislation puts cost containment efforts on steroids. There will be a decrease in income from ancillary services and a continued decrease in payment for any service that is currently considered profitable. The recent changes in value for many radiology services and the soon-to-be-implemented requirements for accreditation are just the beginning.

Also, be aware that the sustainable growth rate (SGR) was not fixed in the health care reform law and that the projections for costs included the SGR formula. Any change to the SGR will require more money in the system. This does not bode well for physician service pricing in the current economic environment.

The movement for hospitals to employ physicians and to form larger delivery systems has been put on the front burner. This will expand rapidly. This does not make sense in the current model, as hospitals are the most expensive part of the system, and previous alliances between the hospital and physicians have been less than successful. One option for many physicians will be to form accountable care organizations to contract for the delivery of care. The closer you can get to the health care dollar, the fewer dollars you will lose to middlemen. Control of your own destiny will also be increased as you move closer to the health care dollar. The advantage is the "shared saving" component that will supplement the decrease in fee for service income.

There are two silver linings to this cloud. First, those who live in rural areas and in areas in which there is not a dominant hospital or health organization may be spared the move to consolidation for a long time or possibly forever. However, there will be a continued decrease in fee for service payments and a loss of ancillary income. Second, there is an opportunity for demonstration projects allowing groups of physicians to organize for contracting directly to provide care. Would it be possible for urologists to contract for urologic care or for chronic disease management for urologic diseases? We have already seen a move toward consolidation. It appears that strength in numbers will help in surviving reform.