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The Abbreviated Life of an Initiative

Posted by J. Paul Spencer, CPC, CPC-H in Hot Topics

I’d like to start today’s rumination with some equations based on life span and time. I beg the reader to stay with me as I do some quick calculations.

The common house fly has an average life span of 15 to 30 days. As of today, I have been alive for 16,500 days on this planet (yes, I count them; my last fatalistic thread hanging on for dear life). The average life span of a male in America is roughly 75, so if I was a fly with a maximum life span, I would be roughly 20 days old right now.

Now given that I am 16,500 days old, that would mean that if we broke up a human life into 30 segments, with each segment equal to 1 day in the life of a fly, we come to the point where each human-fly segment is equal to roughly 825 days in real time. As well as being an appealing mathematical exercise, this becomes a great way to transistorize your own past. As an example, if I were a fly, my first marriage would have only lasted for about a day and a half. If only……….

In the world of health care this week, we had a further demonstration of the brevity of a lifespan. In the  New York Times on Sunday, June 26th, there was a story regarding a CMS initiative to send out “mystery shoppers” to gage the simplicity of getting an appointment with a doctor. The article was based on a proposed rule that was released by CMS close to two months ago for public comment.

The study was to include a series of three telephone calls by “patients” to 4,185 physician offices in 9 states. The first of these calls would have been from someone posing as a patient that has commercial insurance attempting to get an appointment. The second call would have been from someone with the same medical problem as the first, but with a government insurance plan. The third call was to be from someone who clearly identified themselves as being from the Department of Health and Human Services, with the person asking what type of insurances the office accepts. At the conclusion of the call cycle, the answers would have been compared, with the goal being a determination of what percentage of physicians perhaps discriminate due to type of coverage.

I used the past tense in the above paragraph because this initiative was scrapped by CMS on Tuesday. That’s roughly 48 hours from the pages of The Gray Lady to the cemetery, a time frame envious of your average house fly.

The present day is a lousy time to be a primary care physician. Currently, there stands in the American health care system a dire shortage of internal medicine and family practice physicians. If the Patient Protection and Affordable Care Act stands as written (and the 6th Circuit Court of Appeals ruled that it should this week), there will be a population of over 40 million people suddenly insured through a combination of expansion of Medicaid and new or established state exchanges, and every one of them will suddenly have a desire for a doctor’s appointment. This will be in addition to the patient volume already experienced by front-line providers, who on average spend a paltry 12 minutes with their patients during a visit. Given that the new population will be under penurious government fee schedules, you can excuse providers for their lack of excitement about the Affordable Care Act.

As if this most obvious of challenges isn’t enough, expanded audits by multiple independent contractors will soon pose a direct threat to the monetary health of the practice. With CMS’ announcement of the addition of predictive modeling technology being added into the mix, physicians are now financially at risk both prior to and after claim payment being received, making it virtually impossible to draw up a budget for a medical practice. 

With all of this as a backdrop, there was quite a bit of blow-back to the “mystery shopper” proposal, with criticisms of ”over-regulation” and “government spying” increasing in volume as comments were submitted. This was in spite of the fact that CMS guaranteed that the collected data from the survey would have remained confidential.

Thus we conclude this week’s abject lesson in abbreviated life spans. As I face the last ten fly-days of my life, it is with the knowledge that some flies, as well as an assortment of government initiatives, have shorter existences than others. Enjoy it while you can.

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July 1st, 2011 | No Comments »

A Casualty of Extrapolation

Posted by J. Paul Spencer, CPC, CPC-H in Hot Topics

This September, the state of New York will celebrate the 30th anniversary of one of the darker chapters in its history. It was on September 13th, 1971 that state troopers responded to a riot / hostage standoff at Attica State Prison by throwing tear gas and opening fire indiscriminately. The resulting deaths of 39 people, including 10 hostages, took 19 years to settle in the courts. It was an abject lesson in casting too wide a net to solve an immediate problem.

Something is about to occur in New York which, while not on the scale of the human loss at Attica, becomes yet another abject lesson in cutting too wide a path of destruction. It is being reported from state news sources that Jim Sheehan, the Medicaid Inspector General, will be asked to resign his post within 30 days of the conclusion of the current state assembly session.

On the surface, this would seem to be a counter-intuitive move based on Sheehan’s record of returning almost $1 billion to New York’s Medicaid coffers. Critics charge that Sheehan’s methods have been heavy-handed, with the word “fraud” being used too often in cases of honest billing mistakes. Terms such as “shakedowns” and “punitive nitpicker” have been offered from some corners of the provider community to describe Sheehan’s tactics.

One such method that has come under fire is Sheehan’s use of extrapolation to collect six-figure recoveries from some providers. Being a former Assistant US Attorney in Philadelphia, this method of determining overpayments would certainly not be foreign to him. However, as we enter the realm of expanded government investigations, many methods of extrapolation used by various audit entities have come under fire for being wildly inaccurate and mathematically flawed.

Better mathematicians than myself have explained to me that selecting one wrong set of parameters while performing extrapolation can lead to widely divergent results, many of which up to this point have been detrimental to the providers. Variations totalling hundreds of thousands of dollars, if not properly reviewed for accuracy, have the potential of putting providers quickly out of business. With the largest amount of criticism coming from institutional providers, such as nursing home companies that would take a much bigger financial hit through extrapolation, it becomes easy to see why Mr. Sheehan became suddenly unpopular in the state of New York.

Someone of Sheehan’s stature will more than likely find work very quickly. In addition to his recovery successes, he has built a solid reputation in compliance circles by attempting to educate the provider community on how to avoid audit repayments. New York is attempting to control future activities of the Office of Medicaid Inspector General through the legislative process to insure that future IGs have perhaps a less freewheeling approach.

With that said, extrapolation, no matter how trusted the source, should come under immediate suspicion. As an example, the RAC contractors, who have yet to prove their competence in the audit field in utilizing other methods, will be allowed to use extrapolation as one way of identifying improper payments. If someone with the stature of Jim Sheehan gets his head handed to him partly due to these methods, how forceful can we expect the push back to be against the RACs for utilizing the same techniques?

We all exist in a new world with regard to audits, but not all investigations equate to one another. Because of Mr. Sheehan’s competence, providers asked for his ouster. With lesser audit entities, I encourage providers to build strong defenses, lest the innocent be slaughtered alongside the guilty.

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June 24th, 2011 | 3 Comments »

UPDATE: Physician Pay Cut Postponed For One Year

Posted by J. Paul Spencer, CPC, CPC-H in Hot Topics, J. Paul Spencer, CPC CPC-H, Medicare Fee Schedule

This afternoon, the House of Representatives passed a bill previously ratified by the Senate that delays a scheduled 25% pay cut in the Medicare Physician Fee Schedule. The bill now goes to President Obama for his signature.

The cost of the pay fix is estimated to be $19 billion. As a possible harbinger of things to come, the offset of the cost of the program comes from a provision in the Patient Protection and Affordable Care Act (PPACA).  The line item affected allowed for tax credits for wage earners at or near the poverty line who pay their own insurance premiums.

The passage of the bill freezes the current fee schedule until December 31, 2011. This gives Congress yet another year to devise a replacement to the Sustainable Growth Rate (SGR) formula. The SGR was brought forward in 1997 as a solution to Medicare spending. In every year since, Congress has passed a delay in scheduled cuts, leading to the 25% cut level now removed from the table for 2011.

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December 9th, 2010 | 1 Comment »

The Uncertain Future of Healthcare Reform

Posted by J. Paul Spencer, CPC, CPC-H in Health Care Reform, Hot Topics, J. Paul Spencer, CPC CPC-H

I have no interest in astrology whatsoever. Letting something like this run your thought process for the day is akin to planning your retirement around Powerball. In those rare instances when I read my horoscope, it’s always at the end of the day, and surprise, it’s always either wrong or so generalized that I find it hard to believe that someone in charge of a checkbook paid money for someone to write it.

Making predictions always makes one look either terribly uninformed or incredibly lucky, but rarely intelligent. It is with this thought in mind that I observe the posturing and chest-thumping currently on display in the handful of days since Tuesday’s midterm elections, particularly with regard to the Patient Protection and Affordable Care Act (PPACA).

On one side, we have the Republicans, whose plan is nothing short of repeal. On the other side, we have the Democrats, who are making preliminary arguments along the lines of “we set this up as an entitlement, not as discretionary spending, so repeal would be quite the trick”.

So let me give you the evidence-based answer of what will happen with PPACA. Congress is a corporate brothel, so the lobbyist with the biggest check gets the most service, so wait and see who writes that check.

That was simple. Now, let’s move on to the other reality that no current or future legislator has the courage to address, because it’s not a problem for which they are receiving large checks to form an opinion, which is the ticking time bomb of the Medicare Physician Fee Schedule.

Beginning on December 1st, physicians are facing a 24.1% cut in reimbursement. As I stated in a previous post, the actual deadline for this cut, based on what occurred earlier this year, is December 14th, due to 10-day hold that can be put in place statutorily by CMS. If that wasn’t enough, the initial decrease is followed by a cut of an additional 6% on January 1st.

It is the outgoing Congress that must deal with this problem, in between self-anointed extended vacations for Thanksgiving and the holiday season. Congress does not reconvene until November 15th, and the biggest “burning issue” of the lame duck session (in a country where the current U6 unemployment rate is 17%) has become extending tax cuts for the richest 1% of America’s population. Under Eisenhower, this group’s tax rate was 91%. It now stands at 36%, but expires at the end of the year and threatens to go to 39%. Apparently, the prospect of doctors being forced to delay care to existing patients, or perhaps cease care to new Medicare patients, is not as urgent as the possibility of a river of crocodile tears from billionaires. Did I mention that in addition to going bed at 7 in the evening, the elderly, the majority of whom are Medicare beneficiaries, tend to vote angry and often?

Legislators like to selectively shout “FRAUD!” when they want to demean a federal program that they do not like. Given this, I can say with great confidence that whatever the future of the PPACA, I would find it incredibly surprising if the extension of internal and external audits were rolled back in any fashion. The RACs, MICs, ZPICs and CERT programs are here to stay. As long as Medicare is in existence, acting as a third rail in any political discussion, both sides will have an interest in controlling the dollars flowing out of the program. Successful return of federal funds back into Medicare that never should have left is something everyone can agree upon.

I’m fully of the realization that I’m not previewing a romantic television miniseries here, but rather a bloodsport along the lines of Rollerball. I don’t suggest popcorn and a drink, or for that matter food of any kind, as the viewer has a good chance of seeing it again in pre-digested form. I know that I don’t write lobbying checks for a living, so any result we see will benefit someone in a suit in addition to being completely devoid of reason and accountability. In the eternal words of H. L. Mencken, “ Under democracy one party always devotes its chief energies to trying to prove that the other party is unfit to rule – and both commonly succeed, and are right”.

November 5th, 2010 | No Comments »

A Halloween Tale Of Medical Travail

Posted by J. Paul Spencer, CPC, CPC-H in Electronic Health Records, Hot Topics, J. Paul Spencer, CPC CPC-H

“The barren trees of late Autumn, as if sketched against the sunset sky with a piece of charcoal, tapped in the wind against the windows of an operating room at Rhode Island Hospital. A patient was being wheeled away as a surgical technician wondered why there was one less drill bit in the OR than before…”

Rather than being the beginnings of an Agatha Christie mystery or yet another book by H. P. Lovecraft about reanimating the dead, what you have just read is the beginning of a story that led this week to the imposition of a $300,000 fine against Rhode Island Hospital. The missing drill bit was discovered to have been left in the patient’s head during brain tumor surgery. One wonders if this was discovered because the patient’s head kept pointing to Magnetic North, as the hospital didn’t follow an internal protocol of performing a postoperative x-ray in the OR when it is discovered that a surgical instrument is missing. Shortly after this incident, the same hospital had a similar incident involving a pair of forceps being left inside a patient’s abdomen.

While the above story is newsworthy, we have come to realize that medical mistakes have become problems that require increased attention. In an earlier posting in this space, I talked about steps taken in this year’s OIG Work Plan towards determining whether the quality of care provided is deserving of Medicare reimbursement. This goes hand in hand with fairly recent CMS efforts to eliminate payments to hospitals for “never events” and hospital acquired conditions. The two examples above topped a list of these occurrences first implemented in 2008 and which continues to expand.

As Rhode Island Hospital so unceremoniously discovered, having protocols in place is not the problem-solving panacea to adverse patient care events in a health care setting.  Incidents like the one above shed light on the inherent problems of this approach, not the least of which is that human beings are still the predominant providers of medical care. Given this fact, we tend to look for better, less spooky paths to improved outcomes.

With the current Halloween candy-like incentives being offered for implementing an electronic health record (EHR), the medical community seeks news of a positive return on this particular investment. Yesterday, CompTIA, an information technology trade group, released a study that gives a snapshot of EHR adoption. The study showed that roughly 50% of all physicians are using either a complete or partial EHR in their practices, which is a heartening figure given that the incentive payment period begins in 2011. Due to its source, the report included no news of how EHR adoption is affecting patient care. While some preliminary studies have yielded results showing that an EHR can be of great assistance toward favorable patient outcomes, the medical world awaits a larger volume of hard data to show this beyond a shadow of a doubt.

Another horrific element of the equation are the many different conceptions of “quality care” held by the patients themselves which become the great intangible in this debate. On one end of the scale is a person like me, who sees his doctor either once a year or in cases of abnormal bodily processes that I myself am unable to stop. The opposite end of the patient care spectrum is the malingering patient who looks forward to further testing for nothing in particular. In cases like this, can it be accurately determined whether a poor outcome is a patient’s frightening perception or the cold, skeletal deathly hand of harsh reality? 

Of all the ghastly and gruesome stops along the road to improved outcomes, medical providers are about to find that worst among these is declining reimbursement for care determined to be avoidable or unnecessary. As Rhode Island Hospital discovered this week, the path to providing consistent and quality care requires continuing effort and eternal vigilence against the dark forces who pay for care, but cheer up. In the end, the road is not half as scary as the effect of this on the world of acting. Now that’s terrifying!

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October 29th, 2010 | No Comments »

Are Small Details The Key To Quality Care?

Posted by J. Paul Spencer, CPC, CPC-H in Hot Topics, J. Paul Spencer, CPC CPC-H

Yesterday, I had a scheduled day off due to contractors visiting my house for future work. It quickly turned into a day of major revelations about my house.

My wife and I were in the early stages of replacing our front door. I say “were” because we had someone come out to take measurements and he discovered that our house is equipped with roll-down hurricane shutters over the front door and a majority of the front windows which render the replacement of the front door impossible.

To put this in perspective, we’ve lived in this house for five years and had no idea that the house had this feature. The realtor didn’t mention it among the house’s features when we were in the process of buying the house. After our decision to purchase the house, the home inspector (a man whose last name, based on this and other unearthed oversights, I suspect is Magoo) didn’t find them. We thought that the 5 poles hanging from the wood molding in our sunroom were the remnants of some type of  long-deactivated awning system. Imagine our surprise to find that we have a house with hurricane protection in a part of the country known more for snowfall by the foot.

The discovery of this one unknown detail has suddenly made us rethink our entire approach to improving our home. Stumbling in the dark for topics in this space as I normally do, I came across a parallel in the field of medicine. Imagine for a moment that my house was a patient in a hospital. How would the diagnosis and treatment of this patient change if one small detail of the patient’s overall health was either undiscovered, not documented or underdocumented?

I came across an article this week that covered this topic in passing reference. The link references a recent article in The Journal of the American Medical Association regarding a Mayo Clinic study that made a connection between medical student burnout and poor patient care habits down the road. 43 percent of medical students surveyed by the study have admitted to unprofessional conduct, such as documenting a physical examination finding as “normal”, when the exam wasn’t performed at all. There were other findings in the study with regard to a lack of altruism towards underserved patient populations and student views of conflicts of interest that are somewhat outside the mainstream, but the idea of what could be an important detail of a medical condition being ignored should have some universal resonance.

By a combination of natural curiosity and accidental aptitude, I find myself squarely placed in the business of being a physician advocate. I grew up in a family that included five doctors and a few nurses, so it is not a position that causes me deep personal discomfort. However, the business of medicine is in the midst of major change. Physicians in the American health care system will now be assessed based on patient outcomes, with the future of individual reimbursement being affected by these measurements.

In this setting, every detail of the patient’s condition and how it is documented and approached medically increases in importance. If 43% of a cross section of medical students are basically telling us that they are not seeing small details as important, in what condition will the medical delivery system find itself five or ten years from now? Further, if the documentation, as in the example above, is knowingly false, can the physician-reported PQRI data be believed? Following all of this in my mind is the natural question for me, as it applies to my day-to-day tasks, which is whether or not I can trust that the services billed are the services performed if the documentation as it appears may be falsified?

The Mayo Clinic study came to the conclusion that medical schools should do a better job in the academic process of stressing basic medical ethics and what relationships are acceptable. I would see this as but one element of a comprehensive plan that appears to be needed to control student burnout, but any light in a storm may be welcome at this point.

Quite a bit of what is written above can be chalked up to the built-in skepticism of being a compliance officer, but I can pretty much guarantee that someday I’ll also be a patient. I am personally ruled by a trust in the scientific and all things evidence-based, so to this point I have not had any reason not to trust a physician rendering care to me, as I approach medicine without fear.  I’ll more than likely continue this mental approach when it comes to my health. In addition to adding some information to my documentation training sessions with physicians,  I think I’ll keep the hurricane windows of my emotional mind down about three-quarters of the way going forward just to be on the safe side.

September 17th, 2010 | No Comments »

Welcome to The RAConteur!

Posted by J. Paul Spencer, CPC, CPC-H in Fi-Med News, Hot Topics, Industry Updates, J. Paul Spencer, CPC CPC-H, RAC / Recovery Audit Contractors, The RAConteur™

If any of us had any doubts about the expected longevity of the Recovery Audit Contractor (RAC) program, this year’s passage of the Patient Protection and Affordable Care Act (PPACA) left no doubt that RAC’s are here to stay.

To date, because of the monetary incentives built into the RAC program, services paid under Medicare Part A have been the preferred target of the four regional RAC contractors. Hospitals and other facilities paid by Part A continue to deal with the ever-expanding demands of the contractors in the realms of both DRG validation and medical necessity. Simultaneously, individual physicians and groups have been existing in a world seemingly beneath the radar of the RAC’s.

The new world under PPACA is about to change this set of circumstances, with RAC’s gearing up to train their sights on a distracted physician population that after years of federal warnings and compliance guidance, remains ill-prepared to weather the storm. The planned expansion of the RAC program into avenues currently traveled by Medicaid Integrity Contractors (MIC’s) only makes the need for data on practice vulnerabilities, and opportunities for coding and documentation improvement, that much more important.

Stepping into this information void comes…….The RAConteur.

As the RAC contractors begin to circle above the heads of the individual and group physician populations, there are steps that can be taken pre-emptively to:

  • Identify probable RAC audit targets;
  • Determine practice vulnerability based on these targets; THEREBY
  • Strengthening your practice’s defenses against your RAC contractor.

Every Wednesday, The RAConteur will focus on RAC information specifically tailored for the physician practice. In future posts, it is my hope that I can assist practices to begin to view the paper trail that accompanies their daily work product with the same highly trained critical eyes developed and possessed by all physicians as part of their medical training. Rather than leaving physicians to continue guessing about where their vulnerabilities may exist. Instead it is my mission to empower the physician to detect errors and modify long-held thinking and behaviors, which will hopefully lead to decreased risk and increased peace of mind.

The paved-over swamp that is official Washington, D. C. has decided that increased audit recoveries are the pathway to offsetting the cost of healthcare reform for the next decade. While the opportunities to weed out the fraud in the American healthcare system is a task for which we all have a positive financial stake, The RAConteur will relate as much information and advice as possible to ensure that you are not the physician providing a high percentage of this healthcare funding.

As we go forward together, I look forward to your comments and questions on specific elements of physician RAC audits, coding, documentation and best practices in a world of hyper-investigation.

Welcome to The RAConteur!

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September 1st, 2010 | 3 Comments »

Court Ruling Obliterates “Good Cause” for RAC Audits

Posted by J. Paul Spencer, CPC, CPC-H in CMS, Hot Topics, RAC / Recovery Audit Contractors

Life is nothing without meaning.

As a demonstration of this statement, imagine for a moment that everything in your life that has some kind of fixed value or representation suddenly shifts. Here are a few illustrations to help you: the nickels in your pocket are now worth nine cents, the dishwasher in your kitchen is now used for the cleaning of clothing and your family dog is now an animal known as a boopwiffle.

To the best of our abilities, we have attempted to assign shape and definition to everything that exists. The moment of debate occurs when someone else applies a different set of definitions to things in our world with a long-established value. Depending on the new person’s definition, the result is either a clearer understanding of the things that surround us (such as someone like Copernicus or Galileo) or a complete and total breakdown of established order, leading to chaos. Last week, a judicial decision was handed down from a U. S. District Court in a case involving a hospital and a Recovery Audit Contractor that, if left to stand, could hold dire consequences for all providers of medical services paid by the Medicare program.

In February of 2009, CMS issued Change Request 6157, that stated that a contractor could go back as far as 4 years to reopen an initial determination on a claim, provided that the contractor has ”good cause” for the reopening. Specifically, this update clarified what constituted new and material evidence needed to substantiate good cause. The Change Request stated that the information has to be something that was not readily available at the time of initial determination. There was a key passage in this document that was at issue in last week’s case:

“A contractor’s decision to reopen based on the existence of good cause, or refusal to reopen after determining good cause does not exist, is not subject to appeal.”

The plaintiff in this case sued the Department of Health & Human Services, stating that a RAC auditor reopened a claim 20 months after the initial determination without sufficiently providing just cause for the reopening. The final decision of the judge was that a decision by a contractor to reopen a claim is not subject to appeal, regardless of whether “good cause” exists.

In summation, this decision means that RAC’s and ZPIC’s no longer have to follow any rules for the reopening of claims. No appeal rights are available to any provider to force the disclosure of a reason for claim reopening and no court can provide relief. Any contractor can reopen any claim at any time for any reason, and CMS isn’t interested in monitoring contractor reopenings to determine whether good cause exists.

While the RAC program as designed on paper was to find both overpayments and underpayments, there is no financial incentive for the RAC’s to identify both with the same veracity. If one factors in that RAC’s keep anywhere from 9% to 12.5% of all overpayment dollars collected depending on geographic area, the judge’s decision has devastating potential.

If I were to identify one silver lining with regard to the RAC’s, it would be the success rate of appeals of RAC determinations. Currently, 8.2% of all RAC decisions have been appealed by providers with a success rate of 64.4%. This indicates a high error rate on initial determination, and provides a great argument for internalizing an inherent mistrust of any RAC determination. Thanks to a short-sighted court decision, appeals against a RAC as it relates to the administration of statute are limited. Yet if the decision of the RAC as it relates to the payment determination for services seems incorrect, anecdotal evidence strongly suggests that it is, and that’s worth an appeal.

I can’t promise that the process is as easy as taking your boopwiffle for a walk around the park, but half of survival is the art of making yourself an unappealing target for predators. An aggressive response is a provider’s best defense against continued RAC audits.

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August 6th, 2010 | 2 Comments »

Where Will Your Contracts Take You?

Posted by J. Paul Spencer, CPC, CPC-H in Hot Topics, J. Paul Spencer, CPC CPC-H

Today’s post requires that I share a bit of personal philosophy with the reader. This will be the less frightening parts of my psyche, so you can stop trembling.

To start out with a bracing dose of truth, I tend to live by very few rules, mainly because I fall back on survival instincts for most of my decision making process. This includes not dancing barefoot in poison ivy, realizing that I’m not cut out for living in the forest and stopping at the occasional red light. However, when it comes to what is referred to in more puritanical quarters as a moral code, my list of rules is rather short: don’t kill, don’t steal and don’t profit from other people’s bad luck (there’s one more multitiered rule that’s rather graphic and won’t be shared in this forum).

A good example of the application of these ideas is the fact that on the side, I’m a singer. My mother once suggested to me that there could be money to be made singing hymns at funerals and I found this idea incredibly revolting and insulting. It’s not enough that someone has just lost a loved one, but you’re going to stick a hand in the family’s pocket for the act of ushering the deceased into the next life with song? I find the very thought disgraceful.

As an extension of this rule, I have a deeply wired disdain for anyone who makes a living profiting from human misfortune. My hit list of occupational vultures includes funeral homes, pawn shops, payday and title loan stores and drug dealers. For purposes of this posting, let’s add an obvious one to the list: health insurance companies.

It is a well-documented reality that since the introduction of “managed care”, insurance companies are making out pretty well on the profit side. Hand in hand with this is the fact one study indicates that in 2007, 62% of all bankruptcies filed were due to outstanding medical expenses. Of that number, 80% had health insurance coverage. Given this statistic, why are we calling the purchased product “insurance”, as the very definition of this term suggests a contract that provides a guarantee against loss?

The effects of this same industry upon the provider community are no less damaging. Due to over 20+ years of deleterious contract terms, providers across the country are struggling with the costs of practice operation. With the proliferation of PPO plans that expand abhorrent fee schedules and payment rates to insurers across the country through the use of silent PPO’s and wraparound plans, the reimbursement playing field is evolving into a mine field.

It is my duty to inform the provider community that after six paragraphs, 400+ words and a brief discussion of funeral music, I’ve reached the point in this narrative where I can relay some good news; these mine fields have maps, and these would be your insurance carrier contracts.

Provider contracts make for interesting reading. What at first presentation will sound like an opportunity to expand your patient base to another insurance population can quickly shift in shape to something more resembling indentured servitude with the simple act of a signature. Knowing this, there is no longer any valid reason for not reviewing your insurance contracts on a regular basis, at the very least yearly.

In addition to the base contract, it is equally important to be wary of any and all amendments to that contract that are offered after initial contracting. I recently came upon a case where a physician had been under contract with an insurer for 4 years (with no legitimate review of the base contract language in that time span) and was sent an amendment that he dutifully signed which gave the insurer permission to share their pricing structure with other insurers. This had the effect of extending already negative contract terms far afield to insurers to which the provider had never been formally introduced.

Health care delivery finds itself on the brink of entering a world of increased physician cost and time investment. If a provider looks at his or her bottom line today and can see beyond all doubt that the current path is unsustainable, the best way to plug the income leak engulfing the practice is to go right to the source, which would be your insurance contracts. There are many directions that can be taken with regard to building a successful and sustainable medical practice. Given what we know about the singularly predatory nature of the modern insurance industry, the time has come to ask the most important question; where are your contracts taking you?

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July 23rd, 2010 | 1 Comment »

Physician Pay Fix Passes

Posted by J. Paul Spencer, CPC, CPC-H in Hot Topics, J. Paul Spencer, CPC CPC-H, Medicare Fee Schedule

Late yesterday, the House of Representatives passed a 6-month fix to the Medicare Physician Fee Schedule. The legislation passed not only reverses the 21.3% pay cut that affected claims with dates of service from June 1st, but also provides for a 2.2% increase to the previously determined fee schedule for 2010. This enhancement in pay will now be in effect for all claims with dates of service between June 1 and November 30, 2010.

The legislation that originally contained the pay fix was returned to the Senate for consideration by House Speaker Nancy Pelosi on Friday June 18th. In addition to the pay increase, the larger bill contained extensions of unemployment benefits and supplemental payments to the states to augment Medicaid programs. Senate Majority Leader Harry Reid spent the second half of yesterday afternoon attempting to garner the 60 votes needed to advance the legislation to a full vote on the floor. Ultimately, his efforts failed when the cloture vote tally of 57-40 doomed the bill. Minutes after the Senate vote, the House, by an overwhelming majority, passed the breakaway bill containing the pay fix that was sent to them late last week. The legislation was signed this morning by President Obama.

CMS has been processing claims with a 21.3% cut for the last 5 working days.  It is expected that CMS will soon announce that claims are now going to be processed at the pay fix rate. Any claims that have been processed over the last week will need to be reprocessed at the new, higher rates absent the previous cut.

While this legislation brings the latest chapter in this drama to a close, the story will begin anew as December 1st approaches. If either another temporary remedy affecting the fee schedule or a permanent fix to the Sustainable Growth Rate (SGR) formula is not passed prior to this date, physicians will face a 23% across-the-board cut in reimbursement.

I invite you to look very carefully at the mathematics involved with this. The conversion factor for 2010 was frozen at the beginning of January at 36.0846. Due to the larger health care reform legislation passed earlier in the year, the conversion factor was decreased for all 2010 claims to 36.0791. This did not affect claims already processed, but if you have recently submitted claims to your contractor for dates of service from early 2010, you may have noticed that the payments are decreased by a few pennies from how similar services were processed in the beginning of the year. The 2.2% increase now in effect applies to the lower, updated conversion factor.

While the latest conversion factor for the six-month period has not been released as of yet, a 2.2% increase to 36.0791 gives you a number in the neighborhood of 36.8728. Now, let’s suppose for purposes of envisioning the worst-case scenario that a 23% cut goes into effect on December 1st. This cut would be applied not to the temporary conversion factor, but the legislated conversion factor of 36.0791, which would give you a conversion factor closely resembling (again, not exact due to a lack of CMS announcement at the time of this writing) 27.7809.

The conversion factor is slated to take a further hit at the beginning on 2011, which would result in reductions that would bring the total net cut very close to the 30% range. Words have yet to be devised that would fully describe the negative impact on the healthcare delivery system in the United States that occurs if such a cut ever takes place.

For now, enjoy the summer sun and bask in the beauty of Autumn’s color when it arrives, as it could very well be a winter longer than any other we’ve ever experienced.

June 25th, 2010 | 1 Comment »

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