Healthcare Business Information Review

Posted on November 5, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Breaking News – “U Can Use”

Staff Reporters

Mental Health Policy: The Senate adopted HR.-6049 with mental-health parity. Bipartisan lawmakers are working to make the bill law before 2009.

Regulations: Under new Medicare regulations, doctors, with a financial stake in hospitals, must tell referred patients about ownership links.

Compliance: CMS proposed October 1, 2011, for full implementation of the International Classification of Diseases, Tenth Revision (ICD-10), code sets.

Policy: Congress [S. 2041 and HR 4854] is considering changes to the False Claims Act that could lead to more vigorous qui tam litigation.

Accreditation: CMS approved Norwegian company Det Norske Veritas [DNV] to accredit hospitals for Conditions of Participation [COP] standards. Authority to also certify ISO 9001 compliance runs, through 2012.

Bankruptcy: Hospitals filing bankruptcy this quarter include: a two-hospital system in Honolulu; one in Pontiac, MI; Trinity Hospital in Erin, Tennessee; Century City Doctors Hospital in Beverly Hills, Lincoln Park Hospital in Chicago, and the four-hospital-system Hospital Partners of America, in Charlotte.

Insurance: First Professionals Insurance Company told the SEC that it held securities with an amortized cost of $4.1 million in Lehman Brothers, $2.1M in American International Group, $2.5M in Morgan Stanley, $2.1M in Washington Mutual and $300,000 in Fannie Mae.

Business: Emdeon, a developer of revenue and payment cycle health management products, acquired the patient statement business of GE HIT.

Finance: Minnesota’s HealthPartners new Web tool provides prices for 83 procedures in its primary care and radiology network.

More info: www.HealthcareFinancials.com print-journal and November 2008 – February 2009 issue: http://healthcarefinancials.com/Nov08Jan2009.aspx

Disclosure: Dr. David Edward Marcinko is the editor of Healthcare Organizations: [Financial Management Strategies].

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Filed under: Breaking News, Health Economics, Health Insurance, Health Law & Policy, Healthcare Finance | Tagged: healthcare business, healthcare economics, Healthcare Finance | Leave a comment »

The Healthcare Financial Crisis

Posted on November 4, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Will the Economy Affect the Healthcare Industry?

By Dr. David Edward Marcinko; MBA CMP™

Publisher-in-Chief

The past decade has seen the healthcare industry move toward, away, and then back to capitation which is a system that provides a: “1) Method of payment for health services in which a physician or hospital is paid a fixed amount for each person served regardless of the actual number or nature of services provided, (2) A method of paying health care providers or insurers in which a fixed amount is paid per enrollee to cover a defined set of services over a specified period, regardless of actual services provided, and (3) A health insurance payment mechanism that pays a fixed amount per person to cover medical services,” according to the Dictionary of Health Insurance and Managed Care www.HealthDictionarySeries.com

Others simply called it “wholesale medicine.”

The Last Decade

Only a decade ago, astute physician executives and healthcare administrators found it hard to believe that they would ever accept pre-payment for unknown commitments to provide an unknown amount of medical care. They argued that it would mean fewer patients seen and less care rendered. More than a few medical providers and healthcare facilities had a natural aversion to capitated, fixed payment or contractual medicine. It had always been associated with the worst components of managed care — hurried office visits and soul-less physicians.

Today’s Marketing Force

Today, a modified form of capitation reimbursement is re-emerging as a market force, and not merely a temporary healthcare business trend. More than 40% of all physicians in the country are now employees of a managed care organization that uses, or is re-considering, actuarially equivalent medical capitation in a reincarnated form.

Legislative Example:

For example, in February 2008, the California legislature passed Welfare and Institutions Code section 14105.19. It required a 10% fee-for-service payment reduction to Medi-Cal physicians and mental healthcare providers. The new payment reform law took effect on July 1, 2008. The Centers for Medicare and Medicaid Services plan to launch similar demonstration projects in Colorado, New Mexico, Oklahoma and Texas in January 1, 2009. The rush to find capitated contracts may be on once again.

Is Capitation the Answer?

Has capitation finally fulfilled its promise as a quality-improving and revenue-enhancing model? Or is it just another cost reduction strategy that squeezes doctors and hospitals, and limits patient care and choice during this financial crisis? To answer this query, one needs to review the Stark Laws.

Stark Laws I, II and III

Curiously, Stark Laws I, II and III were created to eliminate concerns that self-referral could lead to excessive medical care and fee-for-service payments. Ironically, this system, with its potential for self-enrichment, had long been perfectly acceptable. Many also never understood how a commitment to treat an entire patient population could be made with little or no actuarial information. Hence, frustration was the initial reaction of many medical providers to capitated reimbursement.

Capitation Advantages

Contemporary medical cost accounting has demonstrated that capitation has some advantages over traditional fee-for-service care. For example, it can create and align incentives that help patients, providers, and payers by limiting their contingent fiscal liabilities. In the current credit-deprived economy, capitation is increasingly being viewed in a more positive way.

Where Are We Heading?

How should physician and nurse-executives, hospital administrators, CXOs, managers and financial advisors navigate these treacherous fixed-payment waters? What’s the trend?

Micro-capitation … Is the Word … Is the Word!

What is it — and how does it work? Most importantly, how can a healthcare organization profit by it?

For the financial cognoscenti, micro-capitation [termed by Scott Shreve; MD – personal communication] focuses on medical conditions, or subsets of clinical conditions rather than traditional CPT® codes or MS-DRG patient activities. Care is delivered in discrete “self-organized medical care packages,” not patient care packages, as before. This creates a true healthcare marketplace where price, quality, and medical outcomes can be compared side-by-side, or provider-by-provider, or facility-by-facility.

New Level of Expertise

For instance, services provided by vertically or virtually integrated medical teams would enable a new level of expertise. High-volume providers would develop additional experience, which would enable them to introduce innovations and efficiencies in a classic economies-of-scale cycle. With additional delivery and outcomes experience, providers would be much more willing to put out a set-fee for a standard grouping of clinical services, because they would have confidence in their ability to deliver care for that price.

Still Capitation, but Better

Philosophically, this is still capitation, but it is distinguished by a finer “micro-capitation” at the medical condition level (lowest common unit of care delivery that can be measured), not the patient level. So, the healthcare delivery marketplace is again attempting to control economic risk — not with toxic credit default swaps [CDSs] or other financial derivatives, but by moving to micro-capitated “units” that can be understood, measured, and marketed.

Assessment

As the domestic corporate credit crisis escalates, the pharmaceutical industry implodes, the population ages, and the media focuses on the increasing number of uninsured citizens, a growing number of hospitals are shuttered, re-sized, or struggling onward with trepidation. Nevertheless, by considering alternate reimbursement models, like microcapitation and others, healthcare organizations might again thrive going forward.

More info: www.HealthcareFinancials.com print-journal and November 2008 – February 2009 issue: http://healthcarefinancials.com/Nov08Jan2009.aspx

Conclusion

Your comments are appreciated.

Disclosure: Dr. David Edward Marcinko is the editor of Healthcare Organizations: [Financial Management Strategies].

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Filed under: Health Economics, Health Law & Policy, Healthcare Finance | Tagged: capitation, micro-capitation | Leave a comment »

Healthcare, Medicine and AIG

Posted on November 1, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Hospitals, Doctors and Insurance Companies Affected

Staff Reporters

The federal government recently announced a $100 billion rescue of American International Group [AIG], the largest insurer in the nation. Those involved in the business of insurance should know that it was the financial services operations and other non-insurance operations of AIG, and not its insurance companies, that forced the federal government to bail them out. Medical professionals should be aware, as well.

How it Happened

According to experts, the reason for AIG’s problems is two-fold. It is partly based in its dealings with credit default swaps, complicated financial instruments that investors use to protect themselves from bond defaults—which also caused the collapse of Lehman Brothers.

Insurers try to keep premiums low and profits high by investing. And while all insurers invest premiums in different forms of assets, AIG invested much of its enormous income in securities that were backed by sub-prime mortgages. As the mortgage-crisis came to a head, the value of those securities fell, creating financial problems for AIG. Insurers, like AIG, who attempted to profit from high risk investments found those investments to be so risky that they failed completely. When the investments failed, the insurer’s operating assets were reduced and it needed a major infusion of working capital. The federal loans, although enormous, are fully backed by saleable assets.

I Have AIG Insurance – Should I be Worried?

Generally no; because of the corporate structure of AIG. The holding company can be experiencing financial problems while the individual insurance company subsidiaries that agreed to insure you remain secure. They have more than adequate reserves to pay the claims anticipated. Each AIG branded insurer is a separate corporate entity that, by law, must maintain funds in secure reserves to pay claims presented.

And yet; First Professionals Insurance Company [FPIC] of Florida, recently told the SEC that it held securities with an amortized cost of $4.1 million in Lehman Brothers, $2.1M in American International Group, $2.5M in Morgan Stanley, $2.1M in Washington Mutual and $300,000 in Fannie Mae.

Will AIG Claims be Paid?

Probably, yes. If the insurer has maintained adequate reserves, as required by state laws, there will be sufficient funds to pay all claims reasonably presented. If the individual insurer should fail, it will be taken over by the state where it is domiciled. If the insurer is faced with a catastrophe that it cannot cover and if your insurance is with an AIG company that is admitted to do business in your state, the state’s Insurance Guarantee Fund will pay your claim up to a limit that is usually no more than $500,000. Of course, there is no absolute certainty in any situation relating to insurance, but the AIG companies are well-funded and very capable of handling all predictable claims.

On the one hand, if the insurer is put into receivership, the state regulator will use the insurer’s own assets to make payments before seeking funds from the insurance guarantee fund which is financed by assessments on all insurance companies that do business in the state. If, on the other hand, the AIG insurer is not admitted to do business in the state but does business through the surplus lines market, you are not protected by a guarantee fund and must be certain the insurer has the assets sufficient to cover any potential losses.

How Do I Determine That My Insurer Has Adequate Assets?

Contact your state department of insurance to determine if the insurer is admitted to do business and is protected by the Guarantee Fund. Also, check your policy; the insurer must tell you in writing if it is not admitted. Contact your state department of insurance to obtain financial documents filed by the insurer.

Assessment

The credit-crunch is on everywhere, and hospitals filing bankruptcy this quarter include: a two-hospital system in Honolulu; one in Pontiac, MI; Trinity Hospital in Erin, Tennessee; Century City Doctors Hospital in Beverly Hills, Lincoln Park Hospital in Chicago, and four hospital system Hospital Partners of America, in Charlotte [See www.HealthcareFinancials.com; November 2008 issue].

Assessment

Finally, conventional wisdom suggests a ratings reveiw of any policy provided the insurer by Bests. It should be at least “A” rated. Review financial ratings of the insurer issued by Standard & Poors. Of course, these have become suspect of late, too! So, search the Internet with a query including the name of the insurer and the words “financial problem.” Be sure to ask your insurance agent or broker.

Conclusion

Your thoughts and comments re appreciated.

Disclosure: Dr. David Edward Marcinko is the editor of Healthcare Organizations: [Financial Management Strategies] www.HealthcareFinancials.com

Speaker:If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Filed under: Breaking News, Financial Planning, Health Insurance, Health Law & Policy, Insurance Matters, Investing, Op-Editorials, Risk Management | Tagged: AIG, bankruptcy | 6 Comments »

For-Profit versus Not-For-Profit Healthcare

Posted on October 27, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

An Often Contentious Problem

[By Staff Writers]

In general industry, as well as in healthcare, there has been a longstanding discussion on the relative efficiencies of for-profit businesses versus not-for-profits, which concerns the very merits of competition itself.

The Studies

According to Robert James Cimasi MHA, ASA, AVA, CMP™ of Health Capital Consultants in St Louis, a number of recent studies, some more controversial than others, have investigated the effect of tax status on the relative costs and quality of services at these different types of hospitals.

For example, Bob Cimasi of www.HealthCapital.com reported that one study, published in the New England Journal of Medicine (NEJM), compared Medicare spending (adjusted for local costs, patient demographics, and the types and numbers of local healthcare providers and facilities) in markets with only non-profit hospitals, only for-profit hospitals, and those with both types.

The results for the years studied, 1989, 1992, and 1995, showed that the government spends more for every type of service studied (hospital, physician, home health, and other facility services) in those areas with only for-profit hospitals. Costs for areas with only not-for-profit hospitals were the lowest, with spending in markets with both for-profit and not-for-profit hospitals falling in the middle of the range.

This study also tracked adjusted mean per capita spending for hospitals that had a change in their tax status.

For the period of the study, 1989-1995, they found that areas where all hospitals were non-profit, and remained so, had cost increases of $866, compared with $1,295 for areas where non-profits converted to for-profit status. Areas with only for-profit hospitals had cost increases of $1,166 from 1989-1995, whereas those which changed to non-profit hospital areas had the smallest cost increases of $837.

These results may indicate that the tax status of hospitals affects the costs of health services provided by physician providers and other healthcare facilities. Further, this reported effect, if real, may be considered by many to be detrimental to the public good. In the six years examined by this study, the difference in costs between these market types was indicated to have grown from 12.7% to 16.5%. In 1995, annual Medicare spending was $732 higher per enrollee in markets with only for-profit hospitals than in non-profit markets. This difference may be extrapolated to $5.2 billion dollars in total extra annual costs to Medicare.

Even More Studies

Other studies, according to Cimasi, have examined these cost differences and have found them to result from increased administrative and ancillary services costs. For-profits appear to spend less on personnel, charity care, hired help, and length of stay than not-for-profits. Moreover, spending differences are reflected in measurements of outcomes and quality. A study of death rates has presented them to be 6-7% lower in not-for-profit hospitals as compared to for-profits and 25% lower for teaching hospitals.[1]

The fact that costs in those markets with both for-profit and not-for-profit hospitals were in the middle of the range may be interpreted as resulting from the averaging of costs from these different classifications of organizations. However, the behavior of the not-for-profit class was apparently also affected by this “competition” with for-profits in mixed markets. For example, studies have shown that charitable care by non-profits in these markets is reduced to levels similar to those provided by for-profits.

The NEHJM Editorial

A NEJM editorial, several years ago, discussing several hospital costs studies attributes these higher costs to a lack of competition (or other motivation such as charity) that might act to prevent for-profit companies from seeking to maximize their profits at the cost of the public good.

“Market medicine’s dogma, that the profit motive optimizes care and minimizes costs, seem impervious to evidence that contradicts it.” Then further, “The competitive market described in textbooks does not and cannot exist in health care for several reasons.”[2]

Thus, even if competition could improve care and lower costs, this isn’t happening because expected results from competition are missing in the healthcare markets.

Competition

An examination of hospital competition is also of interest, as many hospital markets are too small to support more than one hospital (a monopoly) or more than a very few competing organizations. The authors of the NEJM editorial went on to cite hospital monopolies and “virtual monopolies” as one of the barriers to competition, stating that roughly half of Americans live in markets too small to support medical competition and that for-profit chains have focused acquisitions on these markets.

More Barriers

The next barrier discussed is constraints on consumer demand imposed by illness. The authors point to the difficulties consumers have in comparing costs, outcomes, and quality in order to choose among competing services.

Lastly, the fact that the government makes the purchasing decisions and pays the majority of healthcare costs, rather than the consumers or employers who are using the services, is presented as a significant barrier to competition.

Assessment

Many healthcare planners find these studies to be a stark illustration of the argument that the benefits of competition for profits are lost whenever competitive market controls are absent to prevent the abuses of profiteering. As one might expect, for-profit hospital companies might point out that this is the case for both not-for-profit and for-profit dominated markets.

References:

1. Wolfe, S. M., M.D., Editor, “Hidden Rip-off in U.S. Health Care Is Unmasked In New England Journal of Medicine Articles.” Health Letter 15: 9, Public Citizen Health Research Group, (Sept. 1999):

2. Woolhandler, S. and Himmelstein, D. U. “When Money Is the Mission — The High Costs of Investor-Owned Care.” NEJM 341: 6 (Aug. 5, 1999): 444

Conclusion

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Filed under: Health Economics, Health Law & Policy, Healthcare Finance, Practice Management, Research & Development | Tagged: for-profit hospitals, not-for-profit hospitals | 9 Comments »

HHS, OIG and DOJ Fight Health Fraud

Posted on October 23, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

New Five Point Strategy Revealed

[By Staff Reporters]

According to the Report on Medicare Compliance, October 20, 2008, the Health and Human Services [HHS] Office of Inspector General [OIG] recently unveiled a five-point strategy for fighting fraud and abuse in anticipation of a new presidential administration.

Five Pillars

The five “pillars” are:

scrutinize who is allowed to bill before enrollment.
establish reasonable and responsive payment methodologies.
help industry adopt practices that promote compliance.
vigilantly monitor claims for payment, and;
respond quickly to detected fraud.

OIG and DOJ

Among other activities, the OIG and Department of Justice [DOJ is using data mining to identify claims problems before they get out of hand.

Assessment

For example, the Office of Evaluation and Inspections [OEIs] issued a 2006 report on aberrant physical therapy billing – physicians were billing for services performed by unlicensed people in the patients’ homes – while an OIG attorney deputized by the Department of Justice [DOJ] is now prosecuting cases based on this violation in the Southern District of Mississippi.

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Conclusion

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

PRACTICES: www.BusinessofMedicalPractice.com
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CLINICS: http://www.crcpress.com/product/isbn/9781439879900
ADVISORS: www.CertifiedMedicalPlanner.org
FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
Dictionary of Health Economics and Finance
Dictionary of Health Information Technology and Security
Dictionary of Health Insurance and Managed Care

Filed under: Health Law & Policy, Healthcare Finance, Risk Management | Tagged: DOJ, HHS | 7 Comments »

Vote Presidential Debates [An E-P Poll]

Posted on October 16, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Healthcare Politics 2008

[Executive-Post readers decide]

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Filed under: Health Law & Policy, Op-Editorials, Voting Polls | Tagged: debate, presidential debates | 1 Comment »

Medicare and/or Medigap Acceptance by Doctors

Posted on October 15, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

More on the Balance-Billing Conundrum

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]

In light of the large number of elderly people, hospitals and doctors often accept Medicare and Medigap coverage without charging above the fees specified by these health insurance programs [ie., do not “balance-bill”].

Other doctors however, do not accept the specified Medicare fees and charge above those fees on a “balance billing” basis (i.e., charging more for their services than the Medicare or Medigap reimbursement schedules provided).

Balance Billing Limitations

Providers are not permitted to “balance bill” more than 15 percent above the schedule amounts. In many circumstances, “balance billing” is limited even further or forbidden outright on a contractual basis with private plans, insurance companies, HMOs, MCOs, etc.

Physician Refusal

Originally, it was projected that “balance billing,” or the refusal of leading medical specialist physicians to accept Medicare for payment, would increase as Medicare fees were further reduced. This apparently did not happen during the last several years.

However, as many managed care plans and HMOs are now reimbursing physicians and other providers at fee schedules considerably below Medicare rates in 2008, this refusal may finally be emerging in some cases. But, we trust it will not be dishonestly sought through inappropriate balance billing.

Assessment

A number of organizations, including the American Association of Retired Persons (AARP), assist seniors with submitting medical bills. After a major health setback, however, seniors may want to rely on health insurance claim specialists to have all their medical expenses properly and speedily processed for reimbursement.

Conclusion

In many cases, traditional Medicare (but not Medicare+ programs) is now the payer of choice for many physicians. And so dear colleagues; either sign-on or refuse, but play by the rules. User opinions and comments, sent to the Medical Executive-Post, are appreciated.

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Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Filed under: Health Law & Policy, Healthcare Finance, Practice Management | Tagged: medigap | 1 Comment »

Ayn Rand on Domestic Health Care

Posted on October 9, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Right or Privilege? [The Beat Goes On!]

By Staff Writers

After watching the presidential debate last night, we were struck with two divergent opinions, on the status of domestic healthcare, from the candidates.

Barack H. Obama

Obama says healthcare is an American “right”.

John S. McCain

McCain opines that healthcare is a personal “responsibility”

Ayn Rand

The objectivist philosopher Ayn Rand opines thusly.

Link: ayn-rand-healthcare

Assessment

And so, what do you think about this contentious topic?

Conclusion:

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Filed under: Ethics, Health Economics, Health Law & Policy, Op-Editorials | Tagged: Ayn Rand | 5 Comments »

Hospital Acquired Conditions

Posted on October 5, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Survey from Aon Insurance Corporation

Staff Reporters

According to a new analysis by insurance giant Aon Corporation, hospital-acquired conditions accounted for 12.2 percent of total legal-liability costs incurred by health care facilities in 2007.

Top Four Injury Claims

In addition, according to a brief about the Aon study in Modern Physician, one out of six claims against health care facilities was associated with hospital-acquired conditions, in 2007. Claims for these injuries were the most frequent of the four hospital-acquired condition categories:

Infections
injuries,
pressure ulcers, and
foreign objects left in the body after surgery.

Assessment

Costs of claims associated with pressure ulcers were the most expensive for health care facilities, which paid about $145,000 on average in claims for that condition. Aon analyzed nearly 78,000 claims with a total $9.3 billion of incurred losses for its professional liability report, which included information from more than 1,200 facilities that provided loss and exposure data.

Conclusion

Your thoughts and comments are appreciated; especially by our physician, medical quality improvement, risk management and insurance agent readers and subscribers.

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Filed under: Health Economics, Health Law & Policy, Professional Liability, Quality Initiatives, Risk Management, Surveys and Voting | 1 Comment »

Hospital Accreditation

Posted on October 3, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Medicare Approves New Organization

Staff Writers

According to Richard Pizzi, of Healthcare Finance News; the US Centers for Medicare & Medicaid Services [CMS] announced its approval of the first new hospital accreditation organization in more than 40 years.

About DNV Healthcare, Inc.

The decision allows DNV Healthcare Inc., a division of the Norwegian company Det Norske Veritas [DNV], to immediately begin determining if hospitals are in compliance with the Medicare Conditions of Participation [COP]. DNV joins the Joint Commission on the Accreditation of Healthcare Organizations [JCAHO] and the American Osteopathic Association [AOA] as the only national hospital accrediting agency approved by CMS. The company’s authority to accredit hospitals runs through September 26, 2012.

NIAHO

According to DNV, its product – NIAHO – is the first CMS-approved accreditation program to integrate hospital accreditation with ISO 9001. It’s touted as a choice that allows innovation and propels continual improvement. The process is said to unleash a commitment to clinical excellence thru NIAHO accreditation.

According to the website: www.DNV.com NIAHO is revolutionary and yet familiar to all healthcare organizations seeking to meet the Medicare Conditions of Participation, in this manner:

NIAHO is designed from the ground up to drive quality transformation into the core processes of running a hospital.
With NIAHO, healthcare organizations meet their national accreditation obligations and achieve ISO 9001 compliance in the same, seamless program.
Surveys are conducted annually.

National Integrated Accreditation for Healthcare Organizations

As part of the CMS approval process, DNV’s accreditation program, National Integrated Accreditation for Healthcare Organizations [NIAHO] was implemented in multiple hospitals across the country and demonstrated its effectiveness to domestic healthcare officials. To date, 22 US hospitals have been accredited by NIAHO, according to president, Yehuda Dror.

Assessment

Why a new accrediting body for hospitals? Rising costs and increasing medical errors, of course! Clearly, quality isn’t the result of spending more money. Many believe it’s a result of core system effectiveness. In that regard, innovation is needed now, more than ever.

Conclusion

Your comments are appreciated. Is this an example of greater healthcare competition and transparency; or just more bureaucracy?

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Filed under: Breaking News, Health Law & Policy, Quality Initiatives, Risk Management | Tagged: accreditation, DNV, NIAHO | 2 Comments »

Repeat Warning on Physician Blogs

Posted on September 29, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Understanding New-Wave Patient Privacy Risks

[By Staff Reporters]

Many people are blogging these days, including physicians. Some say the rapidly expanding medium provides a great opportunity for doctors to better educate patients and the public about the practice of medicine.

Warning

But, others warn that medical or just personal opinion blogging, also presents new risks of breaching patient privacy. As blogs proliferate, some hospital privacy officers are considering policies that would provide professional standards for employees engaged in the activity, and protect their institutions from potential violations of HIPAA.

Ohio State Advice

In a recent Report on Patient Privacy [9/22/08], Julie Chicoine, compliance director at The Ohio State University Medical Center, offers the following pointers for physicians:

Be careful. “You should … write as if your patients, co-workers, colleagues, etc. are going to read your posting every day, and know that it came from you.
Focus on education and general medical principles. Avoid information that is too specific and situations that are likely to be identified by others in your local community.
Ask your malpractice carrier if they have issues with this topic.
Never post in the heat of passion. No matter what the circumstances, allow yourself a cooling-off period before logging on and sharing your concerns.
Blogs are not the appropriate forum for medical mistakes or hospital errors. Pursue those concerns through the appropriate administrative channels within the hospital.
Include a disclaimer that posts are not medical advice.

Conclusion

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

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ADVISORS: www.CertifiedMedicalPlanner.org
FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
Dictionary of Health Economics and Finance
Dictionary of Health Information Technology and Security
Dictionary of Health Insurance and Managed Care

Filed under: Health Law & Policy, Information Technology, Op-Editorials, Risk Management | Tagged: blogs | 4 Comments »

When an ER – Is Not an Emergency Room

Posted on September 22, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

About “InQuickER”

[By Dr. David E. Marcinko; MBA, CMP™]

[By Prof. Hope Rachel Hetico; RN, MHA, CMP™]

Visits to emergency rooms climbed to a record high of 119.2 million in 2006, up from 115 million in 2005; with an average of 227 visits per minute, according to a new report from the Centers for Disease Control and Prevention [CDC]. So, it’s not surprising that “InQuickER” is a new service of Emory-Adventist Hospital [EAH] in Smyrna, Georgia.

How it Works

According to the hospital’s website, patient may schedule his or her trip to the emergency room through an open access process that takes three steps.

1. Reserve an appointment time through the InQuickER website when emergency care for a non-life-threatening issue exists. The site shows the soonest possible time to be seen. You can either reserve that time or choose another time more convenient for you; up to 6 hours later than the first available time. All you need do is briefly describe the injury or illness, and the ER will waiting for you to arrive.

2. Time is saved by filling-out an online registration with medical history that includes allergies and current medications. This allows patient’s to bypass front-desk registration and go straight to a ready and waiting treatment room upon arriving.

3. A printable appointment confirmation slip, with driving directions, completes the online transaction.

Guaranteed or it’s Free

Be seen in 15 minutes or less — or you don’t pay!

The cost for this premium service is $24.99. Of course, regular charges for diagnosis, treatment, consultants and admission may still apply. Online visitors are admonished to visit the website for additional terms and conditions.

The SIMPLE Button

The average time spent waiting for treatment in an emergency room in a United States is 3.2 hours. So, EAH wants to make life easier by allowing patients to wait in the comfort of their own homes. According to EAH, it’s really that simple.

But, is it really as easy as the SIMPLE button of retail giant, Staples, might suggest? Or, is this an economic operating-room, in-patient, or out-patient-poaching tactic?

Three Key Points

1. Patients don’t always know whether their conditions constitute an emergency.

2. What’s the optimal rate of “inappropriate” ER visits as the surgical analogy of appendicitis comes quickly to mind.

3. How harmful are inappropriate ER visits, as opposed to ER closure due to unfunded EMTALA or other initiatives?

Open-Access Scheduling

The concept of open-access scheduling is not new, and should be embraced more than it is by the medical community. Many feel the public is clamoring for it. But, is it appropriate for emergency room use? Or, is this an artifice just a clocked marketing gimmick.

And, what new term shall we give to “real emergency rooms?” Can the public even marginally discern the term’s meaning, given the gross abuse of other potentially life saving healthcare mechanisms like 911 calls; as demonstrated by one Reginald Peterson, of Florida, who called the service – twice – because his spicy Italian Subway® sandwich was missing its sauce?

One also wonders how local hospital staff members, and surrounding primary care doctors, internists and related front line practitioners; as well as walk-in and retail-clinics feel about this service; competitive threat or community boon? Is the idea of a non-emergent – emergency – an oxy-moron; muck like the term “jumbo-shrimp”?

Patient Computer Access?

Do the usual homeless, tired, hungry and mentally deranged patients typically seen in inner city ERs have computer access, or “homes to wait in comfort?”

And, wasn’t the managed care revolution, with its no and low-cost copays supposed to put an end to “ER-squatters?”

Assessment

We believe this business strategy will work because of its affluent location, in North-West Atlanta. It will save the ER money and earn income for the hospital. Suburban patients and soccer moms will also love it. But, as young students, we worked in the ER admissions departments of the old Cook County Hospital in Chicago; and Pennsylvania Hospital on Pine Street in Center-City Philadelphia [City of Brotherly Love]. And, we don’t think the scheduling concept would work there; then or now; nor here at Grady Memorial Hospital in Atlanta. Please opine and comment.

Conclusion

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***

Filed under: Career Development, Health Economics, Health Law & Policy, Information Technology, Managed Care, Practice Management | Tagged: ER | 12 Comments »

CRS Report for Congress

Posted on September 20, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Enforcement of the HIPAA Privacy and Security Rules

By Darrell K. Pruitt; DDS

I recently came across the “CRS (Congressional Research Service) Report for Congress – Enforcement of the HIPAA Privacy and Security Rules,” updated on August 11, 2008.

http://assets.opencrs.com/rpts/RL33989_20080811.pdf

ADA News Online

If those responsible for American Dental Association publications were paying attention, someone would have posted a link to the report more than a month ago on ADA News Online. Was an editor asleep on the job or something? I think members need to know important information like this as soon as news breaks. The ADA has both the technology and the capability of serving members much more responsibly.

ADA Lobbyists

The cover sheet to the report says that the report is “Prepared for Members and Committees of Congress.” Dentists need to know what their representatives are being told by stakeholders and their lobbyists. By the way, where are the ADA lobbyists? Quite frankly, it is my opinion that they are not earning their pay unless they work for basement bargain prices – which they don’t.

HIPAA

The very first sentence of the report reminds us what the HIPAA Rule of 1996 was supposed to be about before it was quietly amended in 2003: “The Health Insurance Portability and Accountability Act of 1996 (HIPAA), directed HHS to adopt standards to facilitate the electronic exchange of health information for certain financial and administrative transactions.” (P.L. 104-191, 110 Stat. 1936 (1996), codified in part at 42 U.S.C. §§ 1320d et seq.)

That sounds benign, and the next paragraph even sounds benevolent. It promises reduced administrative costs for providers (doctors) as well as payers (insurance companies) through simplification of administration.

“Part C of HIPAA requires ‘the development of a health information system through the establishment of standards and requirements for the electronic transmission of certain health information.’ Such standards are required to be consistent with the objective of reducing the administrative costs of providing and paying for health care.”

HHS Simplification

The report expands on the HHS meaning of “simplification” under the topic: “The HIPAA Administrative Simplification Enforcement Rule” (CRS-8): “The Privacy Rule permits any person to file an administrative complaint for violations. An individual may file a compliant with the Secretary if the individual believes that the covered entity is not complying with the administrative simplification provisions.”

Less Administration?

What was that? Did you notice what happened? Doctors were promised less administrative costs through simplification, and then suddenly the CRS Report advertises to politicians that simplification is actually meant to help disgruntled constituents. Modern payback can be delivered using HIPAA inspectors instead of lawyers and nuisance suits. It not only simplifies scaring the water out of doctors, but it is cheaper (more accessible) for consumers when revenge is taxpayer-funded. For those providers expecting good news, I’m afraid promises once again took second seat to votes.

So if the simplification actually does not apply to providers, what are doctors left with? Responsibilities; of course via “Responsibilities of Covered Entities,” (CRS-9): “Covered entities are required to provide records and compliance reports to the Secretary to determine compliance, and to cooperate with complaint investigations and compliance reviews.”

Secretarial Action

Since there is a good chance that the HIPAA responsibilities will make a few covered entities angry, someone, probably a seasoned OSHA inspector, had the foresight to create a rule to take care of that potential problem as well. “Secretarial Action,” (CRS 9): “Finally, the Rule includes a provision that prohibits covered entities from threatening, intimidating, coercing, discriminating against, or taking any other retaliatory action against anyone who complains to HHS or otherwise assists or cooperates in the HIPAA enforcement process.”

Enter PWC

That means, providers would do well to be kind to HHS-contracted PriceWaterhouseCoopers inspectors as they search through office computers for evidence. For dentists, if you offer the contract worker a cup of coffee “with a whole lot of sugar,” be sure you are smiling. For one thing, they will probably be working on commission soon. And remember, it is a felony to intentionally contaminate someone’s drink, even before HHS starts adding up penalties.

Civil Money Penalties

Which brings us to “Civil Money Penalties,” (CRS 10): “Once a penalty has become final, the Secretary is obligated to notify the public, state, and local medical and professional organizations; state agencies administering health care programs; utilization and quality peer review organizations; and state and local licensing agencies and organizations.”

The NPI Number

Remember the voluntary but permanent NPI number, FOIA-disclosable data and the NPPES? This is where the modular HIPAA plan comes together to form a club-like weapon of intimidation. If HHS determines that a dentist steps out of line, the Secretary is obligated to let everyone know about the HIPAA infraction for the common good – using the Internet. That will keep the future doctors down on the farm. or anywhere else but med school. What are we doing to our grandchildren’s access to quality healthcare, friends?

Common Complaints

Here are the most common complaints: “HIPAA Enforcement Activity,” (CRS 14):

“According to HHS, the compliance issues most frequently investigated were for [1] impermissible use or disclosure of protected health information, [2] lack of adequate safeguards for protected health information, [3] lack of patient access to his or her protected health information, [4] the disclosure of more information than is minimally necessary to satisfy a particular request for information, and [5] failure to have an individual’s authorization for a disclosure that requires one.”

How Much Info is Enough?

I think we may be reading a mistake in the document concerning item number 4: “the disclosure of more information than is minimally necessary to satisfy a particular request for information.” Wow! How is a provider to know how much is just enough information, and not too much? Have doctors been sending insurance companies telephone books out of frustration?

Perhaps doctors think that even if all this sounds tedious, time consuming, expensive and otherwise heavy in liability, HHS isn’t interested in solo practitioners. PWC inspectors are going after the big players simply because patient complaints are more than likely being filed against impersonal hospitals, pharmacies and insurance companies. Not doctors.

Vague Statements

Doctors are sometimes wrong: “The covered entities most commonly required to take corrective action by HHS, in order of frequency, include private practices, general hospitals, outpatient facilities, health plans, and pharmacies.” Even though the statement is 180 degrees vague, I think the author means to say that private practices are hit most frequently.

Assessment

Now, as a bookend to this opinion piece, let me repeat the 1996 purpose of HIPAA: The Health Insurance Portability and Accountability Act of 1996 directed HHS to adopt standards to facilitate the electronic exchange of health information for certain financial and administrative transactions.”

Conclusion

It sounds hollow now; but your thoughts and comments are appreciated from all covered-entities, not just the dentists.

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Such a “Sleazy” Company

Posted on September 19, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

About Delta Dental

[By Darrell K. Pruitt; DDS]

“A contract provision that holds dentists to Delta’s maximum allowed fee for non-covered services will affect all of Delta’s Premier and Preferred Provider Organization participating dentists throughout the country by January 2011″ (my emphasis).

“Delta Caps Rates Nationally for Two Networks”

I copied the line from an American Dental Association News online article by Arlene Furlong’s article is titled “Delta caps rates nationally for two networks.”

http://www.ada.org/prof/resources/pubs/adanews/adanewsarticle.asp?articleid=3218

This means that if a Delta preferred provider wishes to make up for the profit lost from providing Delta customers 25% discounts on dentistry, doing more cosmetic dentistry will no longer help keep the doors open. Delta is telling its providers that it will demand discounts on everything for its customers.

Discount Factor Costs

How much does a 25% discount cut into a dentist’s pay? Overhead in dental practices typically run about 65%. Do the math. If the net profit is 35%, and Delta knocks off 25% the dentist’s fee; that means the dentist takes a 70% cut in pay to treat Delta patients. How happy do you think dentists are to see Delta patients who show up for appointments? You guessed it. Delta Dental preferred providers are disagreeable already, according to Doctor Oogle (www.doctoroogle.com), a Patient Driven Referral Site [PDRS].

The Delta Dental Rankings

To see how Delta Dental preferred providers rank in patient satisfaction against all other dentists, pick a few names off of Delta’s list and see where they fall on DR. Oogle’s ranking. I recently saw such a study involving Austin, Texas dentists from almost a year ago. The Delta dentists’ ranks averaged 206 out of 297 Austin dentists listed on the site. That is the bottom 30%. One could say the 70% cut in pay buys Delta Dental clients dental work from the most unpopular 30% of dentists; interesting coincidence.

Cogent Thoughts

Think about this way: In a little more than two years, if a dentist’s practice consists entirely of Delta Dental patients, the doctor cannot raise fees at all. What makes leaders of Delta think they can get away with tyranny in the land of the free?

Furlong further writes: “Tom Dolatowski, Delta’s vice president of marketing and communication, estimates that some 75 percent of dentists nationally are participating in the Delta Dental Premier plan, while some 25-30 percent are participating in the Delta Dental PPO plan.”

That’s how; effective sales techniques

Delta Dental is Simply a Sleazy Company.

This spring, at the Southwest Dental Conference in Dallas, Delta Dental employees encouraged me and other dentists to apply for NPI numbers. NPI application forms were prominently displayed in Delta’s booth. The Delta saleswoman who covers the east side of Fort Worth, my neighborhood, said, “You don’t want to wait until the last minute. May 23rd is the [final] deadline.” (The deadline had been delayed a few times).

Then she and other Delta employees emphatically agreed that the NPI number will soon become a licensure requirement for all Texas dentists anyway. That is an unethical and unlawful lie – condoned, if not encouraged by the leaders of Delta Dental to enhance corporate profits using deception. Everyone knows that the NPI number helps nobody but insurance companies.

Assessment

There is no question that Delta Dental desperately wants dentists to volunteer for NPI numbers. When a dentist applies for the number it gives Delta permission to mine the uninformed dentist’s “Freedom of Information Act-disclosable” data from dental claims. Delta will use its proprietary algorithms to rate the dentist. Then Delta will display the dentist’s value to society on an Internet website. This way Delta can direct its clients to the best neighborhood dentists according to Delta’s preferences – but not necessarily the patients’.

The fact that Delta’s customers generally don’t like Delta’s dentists means that the last thing Delta wants published is patients’ opinions – like those in DR. Ogle.

Conclusion

In my opinion, Delta Dental is such a sleazy company. What is your opinion?

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Filed under: "Doctors Only", Health Law & Policy, Managed Care, Practice Management, Research & Development | Tagged: delta dental | 12 Comments »

How to Hire a Medical Accountant

Posted on September 18, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Seek Healthcare Specificity

Staff Reporters

Use these 25 questions to educate yourself about accountants. And, use this 25-point checklist on how to pick a good healthcare focused CPA. It can be a powerful list for any medical professional and might help you bring in extra money, immediately.

Other Areas

In the areas of estate planning and financial planning, it is essential that doctors have a good team of financial professionals. This usually involves, at the very least, a CPA, an attorney, and a fiduciary focused financial advisor [maybe].

CPAs

If you are a CPA for docs, use this list as a reference for your doctor-clients. By bringing up the concept of due diligence on your own, it strengthens your position and makes a perfect opportunity to ask for referrals. You may also want to use this list as a newsletter insert or advertisement of some sort. Put a brief notice at the top of the list stating that doctors should ask their CPAs these questions, and if they need someone who fulfills these requirements, you would be glad to meet with them to discuss the questions.

Financial Advisors

As an FA, use this list as a networking tool. Refer your clients to a competent CPA who you already do business with or would like to do business with. When you refer clients to a good CPA, you open the opportunity for him or her to return the favor. Send this list to your existing clients at tax time as a neutral third party to help them find a good CPA (they already have a good financial advisor—you).

Attorneys

As an attorney, use this list the same way a financial advisor or account would—to network with the top CPAs and MDs in town. You can make it a standard piece in your mailings or newsletters once a year. When you start giving leads to other financial professionals, it will open up referrals that will be beneficial to your business.

Certified Medical Planner®

And, if you are a CPA, FA or attorney, be sure to promote your hard-won credentials for healthcare specificity; like the Certified Medical Planner® designation, for example.

25 Questions to Ask Your Future Accountant

What designations or credentials do you have?
Are you in practice full-time?
How many years of experience do you have in tax practice?
Do you do all your returns by computer?
What are your fees, and do you have a schedule that I can see?
Can you provide references from other businesses similar to my own?
Do you use any checklists to maximize my deductions?
How soon do you return calls from clients?
Do you teach any tax courses or have you written for any tax publications?
Are you conservative, aggressive, or somewhere in the middle?
What review process do you use in order to ensure a quality product?
Do you specialize in taxes?
What percentage of your practice relates to taxes?
What other accounting services do you personally perform?
May I look at your tax library?
What do you do after tax season?
How often do you take tax courses?
What is your attitude toward audits?
How do you treat gray areas?
Have you ever been disciplined by the IRS, the SEC, or any accounting society?
How many other clients like myself do you have?
Do you offer pre-year-end tax planning as part of your tax service? If so, is there an extra fee for this?
Are you generally familiar with current health law and managed care policy?
Do you offer any tax planning during the year?
Can you give me a recent tax planning tip or tax change that may benefit me?

Finally, and most importantly of all; how do all of the above synergize into medical and healthcare specificity, for me?

Assessment

As you likely now realize, this list is not for CPAs only; but as a due diligence reminder for most fiduciary financial advisors professionals or attorneys who wish to work with doctor clients; “often the most difficult clients in the business.”

Disclosure

Dr. David E. Marcinko MBA, our Publisher-in-Chief and former CFP®, is founder of the online CMP® program in healthcare economics, management and finance for advisors www.CertifiedMedicalPlanner.com

Conclusion

Your thoughts, opinions and comments are appreciated.

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Filed under: Accounting, Financial Planning, Health Law & Policy, Practice Management | Tagged: CFP, CPA, FA, JD | Leave a comment »

Certificate of Need Legislation

Posted on September 14, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Proposing New CON Barriers-to-Entry

By Staff Reporters

Certificate of Need [CON] laws, regulations, and licensure stipulations are known as Barriers to Entry [B2E] hurdles; and have been removed by many states after decades of utilization. For example Montana, Georgia and others have recently removed them, or currently are critically re-examining their CON laws.

The Mundy Proposal

Pennsylvania State Rep. Phyllis Mundy (D-Luzerne) testified at a recent House Insurance Committee [HIC] hearing on her legislation to re-establish a state Certificate of Need (CON) program for medical equipment as a way to rein in skyrocketing health care costs. Citing the three diagnostic imaging centers near her Kingston home as an example of market saturation, Mundy urged colleagues to require health facilities to justify the need for expensive medical equipment. The Mundy bill also would ban physicians from self-referring patients for procedures at outpatient facilities they have financial interests in, which she said invariably leads to more procedures being done at the facilities.

Purposes and Reasons

According to the September 4^thTimes-Tribune, Mundy believes that the proliferation of specialized clinics, imaging centers and surgical centers in communities is one reason health care costs are escalating. Her legislation would re-establish a state regulatory program that was in effect from the 1970s until 1996, requiring a health care facility to apply to the PA State Health Department for a certificate to start or expand services with costly technology.

Assessment

Allied health professionals are increasingly being accepted and recognized by payers and patients as a legitimate alternative to traditional providers and services [more providers equate to more facilities].

And so, can one really wonder about any new legislation to re-establish CON laws that were first in-acted and then disregarded, more than two decade ago. Moreover, is more legislation and health law policy needed, above and beyond Stark I, II and III?

Conclusion

Your thoughts on this dichotomy are appreciated; is it real or perceived; local, regional or national? And, is the aphorism ”doctors would sell Christmas tress if Medicare reimbursed them” true, or even fair. Please opine and comment.

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Filed under: Career Development, Health Law & Policy, Managed Care, Practice Management, Quality Initiatives | Tagged: B2E, barriers to entry | 1 Comment »

Health Care Complaints versus Compliance

Posted on September 13, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Medical Quality Confusion Reigns

By Dr. David Edward Marcinko; MBA, CMP™

Doctors, medical staff, healthcare administrators and patients can often get confused regarding what issues need reporting through their compliance mechanisms [terminology and definitions].

www.HealthDictionarySeries.com

For example, some staff members may think that every “complaint” should get reported through the system. Since the focus of this program is geared more to concerns of fraud and abuse, the staff needs to be educated about what should be reported and what should not.

Smaller Practices

In small healthcare organizations, education on “compliance-related” issues could be part of regular staff meetings or individual meetings with the compliance coordinator. Staff knowledge of the organization’s expectations can be reinforced on a consistent basis. This will avoid issues that larger organizations have been having, where the compliance hotlines have been used for customer complaints and labor issues.

Assessment

If a healthcare entity notices that inappropriate issues or complaints are being brought up through the compliance program, leadership should respond by evaluating the reasons why this is occurring and look at putting in actions to correct the confusion.

Conclusion

We hope you will opine on our concepts of health administrative definitional-stability concerning complaints versus compliance; please comment.

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Medical Coding Definitions

Posted on September 10, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Understanding CPT® Methods

By Patricia Trites; PhD

www.HealthcareFinancials.com

The American Medical Association Physicians’ Current Procedural Terminology manual (commonly known as the CPT® manual) is the recognized coding manual used by healthcare providers to bill third party payers.

CPT Codes

No quantitative values are assigned the CPT® codes contained within the CPT® manual. Each third party payers determines a value, whether a direct dollar or unit value, for each CPT® code. Each CPT® code represents a service, procedure, test, or study.

The CPT® manual attempts to define each of the codes specifically by individual descriptive phrases, and generally utilizing guidelines, rules, and definitions related to code groupings: medical, surgical, pathological, and diagnostic services. Third party payers develop for internal use additional protocols, guidelines, rules and definitions.

Assigned Values

The value assigned to each CPT® code is based on a determined amount of work, practice expense and risk inherently bundled into the service or procedure. Each procedure or service is further defined as a body of work made up of multiple lesser components all valued within the main CPT® code.

Case Example:

As an example, if the surgical lengthening of a leg tendon is the main procedure to performed, it would be assigned a unique CPT® code. Within the tendon lengthening code definition and assigned value would be included (bundled or “packaged”) seemingly obvious lesser procedures available to the surgeon in achieving the ultimate goal of the tendon lengthening. These lesser procedures include the incision itself, retraction of vital structures, tying off small vessels, suturing the tendon in a lengthened position, closing the soft tissue in layers, suturing the skin, application of a dressing, and application of a posterior splint.

Modifications

While some surgeons in a particular case may not need to tie off small vessels because no vessels interfered with the surgical exposure, or maybe they had to tie off two more vessels than they usually have to do, or they may elect not to apply a posterior splint, or the procedure takes twenty minutes more because a required instrument falls on the floor and needs to be re-sterilized, the overall code value of the tendon lengthening procedure does not change.

Essentially with the exception of minor modifications, one way or another, the main procedure remains essentially the same. Those minor modifications or variations in technique would be included in what would be called the global surgical description and allowance. Not all potential secondary or minor procedures need to be performed to fully reimburse the primary procedure.

Billing Fragmentation

The fragmentation, breakdown or unbundling of the main or primary procedure through the billing of each secondary procedure is billing abuse at best, intentional double billing at worse. Bundling is also addressed in the Correct Coding Initiative [CCI] issued by the Centers for Medicare and Medicaid Services [CMS]. This is a quarterly publication that lists the procedures and/or services that cannot be billed on the same day for the same patient.

Assessment

Healthcare providers intentionally billing unbundled services may be committing fraud or abuse.

Conclusion

Your thoughts and comments are appreciated.

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Dentists, HIPAA, IT and Reform

Posted on September 8, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Healthcare Reform and Presidential Candidates

[Surprising Obama and McCain]

By Darrell K. Pruitt; DDS

Some readers of the Medical Executive-Post may wonder why a dentist’s opinions on healthcare reform should be given space on a website that is about the personal business, management, finance and economics of healthcare.

Like Lab Animals

Even though dentistry is only around 5% of the healthcare market; when it comes to government/insurance regulation using the one-size-fits-all micromanagement model of MBAs and politicians – dentists are your lab animals. So, hear me squeal!

HIPAA Hurts

Our nation’s leaders could learn sobering lessons about how their rules affect healthcare by observing how they affect dentists. As businesses, dental practices are naturally much less complicated than medical practices.

For one thing, dentists maintain only a few thousand active patient charts, whereas family physicians may have three to ten-thousand. This is because physicians see forty or more patients a day. Dentists, whose work involves intricate, but routine hands-on procedures in unpredictable mouths, may see ten patients in a busy day – eighteen if one counts checking hygiene patients.

Sans Bottlenecks

In dentistry, patient bottlenecks have never occurred in the clinical setting, even when burdened by modern, strategically complicated insurance hoops. It takes just as long today to pull a tooth as it did in 1960.

Actually, considering the OSHA mandate of the late ‘80s, defensive medicine and non-productive paperwork such as the meaningless HIPAA privacy release that patients have signed without reading since 2003, dentistry takes a lot more time than it used to.

Thank goodness patients never take the time to read what they sign or dentistry would take even longer.

Pulling teeth will never be faster than it was a hundred years ago when x-rays, as well as surgical-grade alloys became available. Back then dentists were never delayed by the wait for onset of anesthesia. For a closely related reason, experienced patients didn’t want dentists piddling around indecisively using cold steel.

Of Peg-Boards and Ledgers

For decades, the busiest of medical and dental practices ran efficiently using only pegboards, ledger cards and lots of carbon paper, yet the staff still seemed to have time to ask patients about their families. The business of dentistry is so simple that even today some dentists choose to run their practices without the aid of a computer at all – thereby eliminating the unproductive expense of being a covered entity.

Always remember this: there is nothing holding down the cost of being HIPAA compliant, and doctors with small, three-and-a-half employee businesses will be held to the same standards as hospitals with large staffs and a fondness for busywork – busywork that demands department budgets that include overtime pay. HIPAA fits a sole-proprietor dental practice like socks on a rooster.

The Economics of Choice

Here is another important difference. For a considerable amount of dental care, one might delay the purchase of a home entertainment center to chew comfortably. For serious medical care, one might forgo a home to stay alive. Almost all acute, health-threatening dental emergencies can be quickly solved in an outpatient manner with a simple extraction that costs less than $200, and available in almost any neighborhood.

HIPAA

From a dentist’s perspective, the Health Insurance Portability and Accountability Act [HIPAA] was never about portability. Oh, I could tell you stories; couldn’t we all. And, considering how many electronic health records have been fumbled under HIPAA, accountability is a cruel joke as well. That leaves the original 1996 HIPAA Rule stripped down to HIA – the Health Insurance Act; transparency at last.

The Four Cornerstones

A year ago, President George Bush signed an Executive Order that centered on four “cornerstone” goals to help bring about a systematic approach for measuring quality and value in health care, and for making that information publicly available. They are:

Connecting the system through the adoption of interoperable health information technology;
Measuring and making available results and outcomes on the quality of health care delivery;
Measuring-Transparency and making available information on the price of health care items and services; and,
Aligning incentives so payers, providers and patients benefit when all are focused on achieving the best care-value at the lowest unit-cost

The last three cornerstones, Measuring, Measuring-Transparency and Aligning are dependent on providers volunteering for the first – Connecting. Even though dentists were intended to be included in Bush’s plans for healthcare reform, connecting with dentists never happened – especially for dentists who did not volunteer for an NPI number – which gives stakeholders a legal right to Measure, Measure-Transparency and Align.

Or, as my dad, a furniture maker, used to say, “Measure twice, cut once (and for your own sake do not get personally involved in the machinery).”

Assessment

As a dentist who has observed physicians methodically lose control of doctor-patient relationships to stakeholders who hold payments for ransom, I say that if this is interoperability, I hope it never connects to my sheet metal file cabinets full of paper. HIPAA has nothing to offer but expense and liability.

Mark my words. History will show that HIPAA was exposed as a national failure in dentistry first, and that the presidential candidates still don’t know.

Won’t presidential candidates Barack H. Obama and John S. McCain be surprised!

Conclusion

Politicians never consider dentistry. Though it is unfortunate and very expensive, it is nothing new. Stick around. I have other issues, as well, and am not bashful. Of course, your thoughts, opinions and comments are appreciated.

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Filed under: Health Law & Policy, Information Technology, Op-Editorials, Quality Initiatives | Tagged: dentist | 5 Comments »

The Healthcare Whistleblowers

Posted on September 5, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

A New DOJ Report

[By Staff Reporters]

According to the Deportment of Justice [DOJ], $9.3 billion was recovered from health care providers accused of defrauding the states and federal government the past decade.

The Study

The department ramped up efforts in the 1990s to combat healthcare fraud by using private citizens with insider knowledge of wrongdoing. They now initiate more than 90 percent of the department’s lawsuits focusing on fraud in health care, and receive between15 percent and 25 percent of the amounts recovered.

The Results

According to an Associated Press report on September 2, of the $9.3 billion recovered between 1996 and 2005, whistle blowers got more than $1 billion. And, while the number of claims dropped in recent years, recovery amounts have soared – jumping from about $10 million a case in 2002 to $50 million by 2005.

Assessment

The reason for this up-tick was the late addition of pharmaceutical manufacturers to the list of defendants.

Conclusion

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HIPAA Rules and Dentistry

Posted on September 1, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

A Survey of Dentists [Pilot Study]

By Darrell Pruitt; DDS

A survey of 18 dentists was performed using the Internet as a platform. The dentists were presented with ten HIPAA compliancy requirements followed by a series of questions concerning their compliancy as well as the importance of the requirements in dental practices.

Frustration with the tenets of the mandate, as well as open defiance is evident by the written responses. In addition, it appears that a dentist’s likelihood of satisfying a requirement is related to the dentist’s perceived importance of the requirement.

Even though this is a limited pilot study, there is convincing evidence that more thorough investigation concerning the cost and benefits of the requirements need to be performed before enforcement of the HIPAA mandate is considered for the nation’s dental practices.

Excerpt:

“Dr. Gerald Daniel seems to have captured many of the dentists’ feelings about the HIPAA Rule when he lamented, “We try to comply, however many times I feel every government agency in the country wants to run my practice without regard to the problems, expense or aggravation it causes the health provider.”

READ IT HERE: hipaa-survey-dentists4

GRAPHS: hipaa-survey-graphs1

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The NPI Debate Heats Up

Posted on August 31, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Questionable Benefits for Providers

[By Darrell Pruitt; DDS]

I really hate lies!

Even though I have been a member of the American Dental Association [ADA] for 26 years, and intend to remain a member for the rest of my life, I cannot stand by silently any longer while my professional organization uses lies and/or deception to trick trusting members into volunteering for NPI numbers.

Now, to see what I mean, please read what the ADA tells dentists about the benefits of the NPI number http://www.ada.org/prof/resources/topics/npi.asp

1. Once implemented across the entire health care industry, the NPI will be accepted by all dental plans as a valid provider identifier on electronic dental claims and other standard electronic transactions.
2. Dentists will not have to maintain multiple, arbitrary identifiers required by dental plans, nor will they have to remember which number to use with which dental plan.
3. NPIs introduce an important element of standardization to electronic transactions that should improve transaction acceptance rates.

Questionable Benefits Review

See what I mean? Now let’s review:

1. Number one clearly benefits only insurers and number three is unwashed tyranny. The smell of sweet buzzwords counter-balancing the odor of the verb “should” immediately revealed to me traditional PR hucksterism … and I’ve seen better. The NPI number, which is conveniently necessary for electronic transactions, will only make it cheaper for insurers to deny claims. I think anyone can see that denials will increase for natural, bottom line reasons.
2. That leaves benefit number two – reduction of ID numbers – as dentists’ last hope of a return on investment in the voluntary NPI. And, ROI could take a while. In the first place, how much do multiple identification numbers actually slow dentistry production in a computerized dental office? Why don’t we get silly?
3. Of all things, for the ADA to list simplification as a benefit of the NPI is embarrassing, but here is what will make a few ADA leaders avoid each other in the halls of Headquarters next week. Even though the promise of simplification is lame, it is technically the only benefit the NPI number lends dentists and their patients.

Enter the AAFP

Here now, is some fresh bad-news for certain ADA leaders and members who trusted their advice.

In an article that was posted yesterday on the American Academy of Family Physicians (AAFP) website, it looks like CMS reneged on simplification.

http://www.aafp.org/online/en/home/publications/news/news-now/practice-management/20080829keep-ptans.html

PTANS

“Notice to physicians: Hold on to your Medicare Provider Transaction Access Numbers [PTANs], also known as legacy numbers which were to have been retired after the mandatory use of National Provider Identifier [NPI] numbers on May 23.” CMS has found another use for those old PTANs.”

Imagine that. Instead of eliminating all of those identifiers as promised, the NPI is just one more number to add to the hard drive.

Assessment

Regardless, patients don’t suffer harm from all this, right? Wrong.

I’ll describe harm from HIPAA, the biggest blunder in the history of dentistry, and medicine, next time.

Conclusion

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Filed under: Career Development, Ethics, Health Law & Policy, Information Technology | Tagged: AAFP, ADA, CMS, Darrell Pruitt, NPI, PTANS | 8 Comments »

Health Insurers Secrets

Posted on August 31, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Seven Things you don’t Know about Health Insurance

By Staff Reporters

“Myth Busters”

Wrapped up in all the noise these days are myths on health insurance that were perhaps once true – or maybe never were.

So, here’s a look at seven things you probably didn’t know about your health insurer.

Link: http://articles.moneycentral.msn.com/Insurance/InsureYourHealth/7SecretsOfHealthInsurers.aspx

Conclusion

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Practicing Medicine “Bare”

Posted on August 26, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Understanding Hold-Harmless Managed Care Contract Clauses

[By Dr. Charles F. Fenton, III; JD]

Most doctors would not think of “practicing medicine bare”; yet perhaps the definition of this term should be re-framed?

Historical Definition

In the past, the term “practicing-bare” meant that a medical provider did not have malpractice insurance.

However, some current managed care contracts require that providers not only have certain limits of malpractice insurance coverage, but also furnish the company with evidence of same. Therefore, some of these providers are under the impression that they are not “practicing-bare.”

Hold Harmless Clauses

Unfortunately, most medical providers have no protection from adverse results arising out of a “Hold-Harmless” clause in a managed care contract or provider-agreement. And, most malpractice insurance companies do not provide such coverage.

So, if your malpractice insurance company does not provide coverage for such events, it is incumbent upon you and your associations to lobby malpractice insurance carriers to provide this coverage.

An additional rider, at an additional premium for Hold-Harmless coverage, would help the doctor sleep better at night.

Contract Considerations

The first question doctors should ask is: Would I consider practicing without malpractice insurance?

If the answer to this question is “no”, then the next question that should be asked is: “Why am I assuming the risk under the Hold Harmless Clause?”

If you cannot provide a lucent answer to this question (stating: “I have no choice,” is not a lucent answer!), then you should consider not signing the managed care contract.

Judgment Proof

Nonetheless, if a medical provider has signed a managed care contract, then they should understand that they are essentially practicing bare, and should take steps to reduce this exposure. In effect, the provider should attempt to become “judgment-proof.”

Such a step does present its own risks. Ultimately, the first step for every physician who signs a managed care contract, with hold harmless agreement, is to read the contract and then consult an attorney or other professional. Of late, plaintiff-attorneys are beginning to make inroads in suing managed care companies. The managed care attorneys foresaw such events and provided protection for the company in the contracts most providers have signed.

As your patients and other plaintiffs become successful in suing and recovering from managed care companies, those companies are going to seek indemnity from you; the provider. Unless you protect yourself, you are likely to become a collateral casualty to some degree or another.

The current practice of medicine presents may perils and risks to doctors and other providers. A doctor may not be able to insure against all these risks, and should take defensive steps to avoid future problems.

Channel Surfing the ME-P

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Filed under: Health Law & Policy, Insurance Matters, Professional Liability, Risk Management | Tagged: Managed Care, practicing bare | 3 Comments »

Physician Owned Hospitals

Posted on August 24, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

New Patient Disclosure Rules

Staff Reporters

According to Bloomberg News, August 19, 2008, doctors with financial stakes in hospitals where they work must tell patients being referred to those facilities about the ownership link, under new rules from Medicare.

Patient Queries

Patients who ask about investors in a physician-owned hospital must be furnished with a list of all doctors, and their immediate family members, who own or have an investment interest and make referrals.

Assessment

Medicare is seeking to make it harder for doctors to boost their payments by referring patients to their own facilities; and it already bars self-referrals for 11 services. The agency said it would end reimbursement agreements with physician-owned hospitals that don’t follow the new disclosure requirements.

Conclusion

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Stark Amendments [I-II-III]

Posted on August 22, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

A Review for Physicians, Consultants and Advisors

By Dr. David Edward Marcinko; MBA, CMP™

By Dr. Charles F. Fenton, III; FACFAS, Esq.

The Stark Amendment to the Omnibus Budget Reconciliation Act of 1989 was a step by the federal government to prohibit physicians from referring patients to entities in which they have a financial interest. Originally, the Stark amendment applied only to referral of Medicare patients to clinical laboratories in which the physician had a financial interest.

Stark I Provisions

The Stark Amendment provides that if a physician (including a family member) has a financial interest in a clinical laboratory, then he may not make a referral for clinical laboratory services if payment may be made under Medicare. A financial interest is an ownership interest, an investment interest, or a compensation arrangement.

Exceptions

There are certain exceptions to the Stark Amendment. For example; if a physician personally provides the service or if a physician or employee of a medical group, provides the services.

Safe Harbor Regulations

Like the Safe Harbor Regulations [SHRs], the Stark Amendment permits physician investment in large entities and provides an exception for rural providers. Under the Stark Amendment, large entities are defined as publicly traded entities with assets greater than $100 million.

But, there are certain other exceptions that are similar to the safe-harbor regulations. They include items such as provision for rental of office space, employment and service arrangements with hospitals, and certain service arrangements. These arrangements must be at arms-length and at fair market value.

Stark II

Stark II was passed in 1993 to modify and expand the Stark amendment. In particular, it acts to bring numerous other entities, besides clinical laboratories, within the prohibitions of the Stark amendment.

Stark III

The Federal Register notes that “Stark III” regulations went into effect on March 26, 2008.

Link: http://mamedicallaw.com/blog/2008/06/15/what-do-i-need-to-know-about-the-stark-iii-rules/

Assessment

Self-referral and over utilization may become less of a problem as managed care makes further in roads in medical practice control and quasi-subrogation. Future legislation is likely to address the concerns of the financial incentives towards under utilization of ancillary medical services.

Update

Quote: Self-referrals

Docs and dollars: This one’s a twofer. The first is a hotly-discussed NEJM paper showing that urologists (not radiation oncologists, as we’ve covered earlier) owning a stake in radiation therapy equipment tend to recommend that equipment more often than docs without an ownership stake. The second is a less-publicized government report showing that surgeons with a stake in device distributors also recommend those devices more than other surgeons. This shouldn’t surprise anyone — doctors are human, after all. The Stark laws designed to prevent physician self-referral, for some reason, make an exception for the IMRT conflict-of-interest in the first paper. And I don’t think any legislation foresaw the physician-owned-distributorships in the second article.

-Austin Frakt PhD

Conclusion

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Stark III Legislation

Posted on August 22, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Self-Referral Rules Unveiled

[Staff Reporters]

The Centers for Medicare and Medicaid Services [CMS] recently reported changes to the Stark self-referral ban that could have a significant effect on physician-hospital relationships and Physician-Hospital-Organizations [PHOs].

Final IPPS Regulations

The new changes appeared in the final Inpatient Prospective Payment System [IPPS] regulation unveiled on July 31, and due for publication in the August 19th 2008 Federal Register [FR].

“Standing-in-the-Shoes” and other Issues

The healthcare industry will soon have to navigate new Stark rules on issues like percentage-based compensation, per-click arrangements and other “stand-in-the-shoes” legal analysis. And, it’s time to sunset “under-arrangements” with physicians because CMS finalized its revised definition of entities that provide Designated Health Services (DHS) under Stark.

But, CMS also cleared a path for returning to Stark compliance over unsigned physician contracts, and clarified how providers can end the “period of disallowance,” when a Stark violation renders Medicare claims un-payable.

Assessment

According to the Report on Medicare Compliance [8/11/08], the Stark self-referral law bans Medicare payments to entities providing DHS if patients were referred by physicians with an ownership, investment or compensation relationship with the DHS entity.

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Prescription Data-Mines and Insurance “Credit-Reports”

Posted on August 7, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

The End to “Rx” Privacy?

[By Staff Reporters}

Collecting and analyzing [HIPAA protected?] personal health information [PHI] in commercial databases is a fledgling, but exploding industry, despite privacy concerns.

Industry Leaders

For example, Milliman’s IntelliScript provides personal drug profiles to insurers. And, Ingenix’s MedPoint is owned by UnitedHealth, the corporation that owns UnitedHealthCare. UHC is also the nation’s second-largest health insurance company.

Large Data Bases

Both firms created their large profiles by mining rich databases of prescription drug histories [eRXs], kept by pharmacy benefit managers [PBMs], which help insurer’s process drug claims. The data-base then aggregates and ranks the information, based on the drugs and dosages, dates filled and refilled, therapeutic class, and the name and address of prescribing doctor; etc. Higher scores imply higher health insurance premium costs.

Thus, prescription data is used to “rate” or economically judge potential insured patients via these “health credit-reports.”

***

Assessment

And so, while politician’s debate how to regulate electronic medical records [EMRs], and attorneys monitor HIPAA policies, some health insurers have already begun tapping into other information sources such as clinical and pathological laboratories, as well. And, other sources are sure to follow.

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Medicare GAO Report on Radiology

Posted on August 5, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Prior Imaging-Authorization Suggested

Staff Reporters

As reported in the Wall Street Journal, on July 14, 2008, Medicare may be soon requiring prior authorization to curtail unnecessary utilization of CT scans, MRIs and other forms of medical imaging, a new Government Accounting Office [GAO] report suggests.

The Medicare Report

To cut imaging costs, Medicare has been reducing certain physician payments, sifting through its data to spot improper claims, and educating medical practitioners about the issue. But, the GAO reported that post-payment claims review alone is inadequate to manage medical imaging – one of the fastest growing parts of Medicare – and suggests that Medicare include prior authorization as a possible front-end tactic.

The Findings

The GAO pointed to new evidence of imaging overuse in physician practices, including:

The proportion of Medicare spending on in-office imaging rose from 58 percent to 64 percent from 2000 to 2006.
Imaging became an increasingly large slice of doctors’ revenue pie. For example, cardiologists got 36 percent of their total Medicare revenue from in-office imaging in 2006, compared with 23 percent in 2000.
In-office imaging spending per Medicare patient varied widely nationwide in 2006, from $62 in Vermont to $472 in Florida.

Assessment

What might proponents of the classic Dartmouth Study on healthcare quality say about these findings?

Conclusion

Please comment on the above; opinions from health economists, actuaries and our radiology colleagues are especially welcomed.

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Patients Challenging Medical Invoices and Bills

Posted on August 5, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Root Cause is Money, Failure-to-Disclose and Frustration

[By Staff Reporters]

Patients are challenging their medical bills with lawyers and lawsuits, out of frustration about the lack of up-front disclosure over costs by doctors and hospitals.

Involve More than a Few Cases

For example, after being charged $82,282 for a 23-hour stay in doctor-owned Westfield Hospital for two operations on her abdomen, a 56-year-old West Penn Township woman called the hospital and her insurer for an explanation.

Not satisfied with the response, she hired a lawyer and notified a reporter, after which Westfield officials said she was overcharged due to human error.

In another 2006 class-action Seattle lawsuit that was expected to have a ripple effect on consumers and hospitals, two patients of the Virginia Mason Medical Center filed suit against the center and won, after which Virginia Mason agreed to pay back an estimated $60 million to more than 3,200 patients who over six years had been charged ”overhead” for procedures performed in hospital-owned clinics – in some cases adding 60 percent to the price patients would have been charged for the same procedure performed by the same doctors in their offices.

Assessment

Although private legal action over medical bills is hard to track, the number of billing and coverage complaints filed with the Pennsylvania Attorney General’s health care unit has risen steadily, with the 2,000 or more complaints so far this year representing a five or six percent increase over last year; according to Morning Call, July 13, 2008.

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***

Filed under: Health Insurance, Health Law & Policy, Healthcare Finance, Professional Liability, Risk Management | Tagged: Add new tag, medical bills, medical invoice | 3 Comments »

Physician Malpractice Liability Immunity

Posted on August 4, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Free Charity Medical Care?

[By Staff Reporters]

Sen. Mike Enzi [R-Wyoming], the senior Republican on the Senate Health, Education, Labor and Pensions Committee [HELP], recently introduced legislation that would allow physicians and other medical professionals to volunteer their services at charity clinics and community health centers free from medical liability concerns.

Query

What is your opinion on this idea, given that there are more than 42 million uninsured Americans, in need? Please comment and explain? We are especially interested in hearing from doctors, lawyers, actuaries and health economists.

Conclusion

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Filed under: Ethics, Experts Invited, Health Law & Policy, Insurance Matters, Professional Liability, Risk Management | Tagged: charity medical care, david marcinko, hope hetico, mike enzi, physician immunity | 7 Comments »

CMS to Bonus Doctors for PQRI

Posted on July 31, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

July – December 2007 Reporting Period

[By Staff Reporters]

According to Anne Zieger, of Fierce Health Finance, the Centers for Medicare and Medicaid Services [CMS] will pay out more than $36 million in monetary incentives to medical providers who reported data on quality of care delivered between July 2007 and December 2007; as part of its Physician Quality Reporting Initiative [PQRI].

Physician Quality Reporting Initiative [PQRI]

Under the PQRI, healthcare providers who choose to participate get bonuses of 1.5 percent of their total CMS payments during the reporting period in which they reported quality data.

Assessment

Average payments for the most recent period range from $600 for individual physicians to $4,700 for groups. The largest payment CMS plans to make to a practice is more than $205,700. Solo physicians, physician group practices, and other PQRI-eligible professionals should receive their payments by August, according to the agency.

Source: CMS press release

Conclusion

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FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

Filed under: Career Development, Health Economics, Health Law & Policy, Healthcare Finance, Quality Initiatives, Surveys and Voting | Tagged: CMS, P4P, physician bonus, PQRI | 14 Comments »

Internet Drug Rx Abuse

Posted on July 30, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

NCASA Study

Staff Reporters

A large majority of 365 Internet sites that advertise or sell controlled medications by mail are offering to supply the drugs without a proper prescription, while the online trade is stoking the rising abuse of addictive and dangerous prescription drugs, according to a National Center on Addiction and Substance Abuse [NCASA] at Columbia University.

The Study

Federal and state efforts to crack down on Internet sales appear to have reduced the number of sites offering such drugs, from 581 last year, according to a New York Times report on July 9, 2008. Drugs offered online include generic versions of opiates like OxyContin, methadone and Vicodin, which are legitimately prescribed as painkillers; benzodiazepines like Xanax and Valium, which are prescribed for anxiety; and stimulants like Ritalin.

DEA Assessment

The Drug Enforcement Administration [DEA] found that 85 percent of all Internet prescription sales involved controlled drugs, compared with just 11 percent of those filled through regular pharmacies, suggesting that online sales often are destined for misuse.

Conclusion

Do you think the current eRx initiatives will drive or reduce this phenomenon; please opine and comment?

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Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

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Filed under: Breaking News, Drugs and Pharma, Health Law & Policy, Information Technology, Surveys and Voting | Tagged: internet, Rx | 3 Comments »

“Loss of Chance” Liability

Posted on July 29, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Judicial Court of Massachusetts

Staff Reporters

The Supreme Judicial Court of Massachusetts [JCM] recently ruled that doctors can be held liable for negligence that reduces a patient’s chance of survival, even if the patient’s prospect for recovery was already less than 50 percent.

“Loss of Chance”

The SJC recognized for the first time a legal doctrine known in medical malpractice cases as “loss of chance,”

Definition

LOC allows a patient whose odds of recovery are 50 percent or less to receive damages for any negligence that reduced those odds. The court also established a formula for juries to award damages proportionate to the reduced survival rate caused by the doctor’s negligence, according to the Boston Globe July 24, 2008.

Assessment

Some medical malpractice lawyers opine that the decision could help patients who previously had little chance of collecting damages from physicians.

Conclusion

Your thoughts and opinion are appreciated; please comment?

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Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

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Filed under: Career Development, Health Law & Policy, Professional Liability, Risk Management | 1 Comment »

Doctors Unite!

Posted on July 10, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

On the “Open Letter from America’s Physicians”

By Dr. David Edward Marcinko; MBA, CMP™

Publisher-in-Chief

As we have seen in this healthcare-charged election season, almost every form of political activism or debate has moved online. So, it is no surprise that a coalition of disgruntled physicians would electronically socialize and network together, as seen with www.sermo.com

About Sermo – Peer 2 Peer Doctor Network

First billed as a physician’s only online community, where 65,000 doctors around the nation exchanged the latest medical insights with each other to improve patient clinical outcomes, some portions of the Sermo community have morphed into a kind of political action committee [PAC] representing a particular flavor of zealot doctor activist.

Political Activism

And, not to miss out on a marketing opportunity, Sermo has allowed itself to be used as a vehicle for an open letter signed by physicians, decrying the state of domestic healthcare, that’s only going to get more public.

According to Mr. Matthew Arnold of Medical Marketing & Media, the letter is a physicians’ manifesto of sorts, composed by selected Sermo doctors demanding an end to intrusive insurers and overzealous regulators. To date it has garnered 5,200 signatures in the several weeks since it was posted on www.mmm-online.com

So, You Want a Revolution?

According to Arnold, “There’s a sense of revolution in this,” said Dr. Daniel Palestrant, founder and CEO of the physician social networking site, which boasts around 70,000 members. “It’s doctors coming together for the first time, voicing discontent with the representation they’ve had to date, and making it clear to the public that the quality of care is going to be suffering based on some of these outside forces.” http://www.mmm-online.com/Fed-up-Sermo-docs-draft-manifesto/article/112006

Doctors Unite

The “Open Letter from America’s Physicians,” hosted at www.doctorsunite.org blames “The insurance industry’s undue authority and oppressive control over healthcare processes,” “Excessive and misguided government regulation” and “The practice of defensive medicine in response to a harmful and costly legal environment” for America’s healthcare crisis, and vows: “We, the physicians of the United States, will no longer remain silent. We will not tolerate a healthcare system where those without medical expertise or genuine interest in our patients’ health have absolute control.”

Assessment

As almost every other form of political activism has moved online, don’t be surprised to see more websites, blogs, wikis or social e-communities like this. Of course, if the details get specific, it’s tricky to know whether the coalition of disgruntled doctors will stay together, and/or whether Sermo will emerge as representing a new breed of doctor “turned-political-pundit.”

Conclusion

And so, is political activism an appropriate initiative for the medical community; why or why not?

Might it be considered more self-serving; or more patient centric? Your thoughts and comments are appreciated.

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Healthcare Organizations: www.HealthcareFinancials.com

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Filed under: "Doctors Only", Health Economics, Health Insurance, Health Law & Policy, Healthcare Finance, Op-Editorials | Tagged: Add new tag, sermo | 3 Comments »

Ending Governmental Barriers to e-Prescribing

Posted on June 28, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

AMA’s – HOD Wants End to Governmental e-Prescribing Barriers

[By Staff Writers]

According to Modern Healthcare [June, 2008] the American Medical Association’s-House of Delegates [HODs] adopted a resolution calling for an end to government-imposed barriers to e-prescribing.

The Resolution

The resolution called for the removal of all federal Medicare and state Medicaid requirements mandating the use of paper prescription forms for certain drugs – that the AMA initiate discussions with the federal Drug Enforcement Administration to allow e-prescribing of schedule 2 drugs – and that Medicare or Medicaid payments not be contingent upon adoption of e-prescribing.

Assessment

The resolution also called on the AMA to work with federal and private entities to ensure universal acceptance by pharmacies of electronically transmitted prescriptions.

Assessment

Should we really bite the [Medicare] “hand that feeds us?”

Conclusion

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Filed under: "Doctors Only", Health Economics, Health Law & Policy, Information Technology | Tagged: e-prescribibg, EMRs, HIT, IT | 2 Comments »

New Hospital Rating Service

Posted on June 7, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Consumers Union

[By Staff Reporters]

The nonprofit Consumers Union is launching a new hospital ratings service, adding to the growing competition to provide online consumer information about health care, as reported in the Wall Street Journal.

A Consumer Reports Publication

The effort, by the publisher of Consumer Reports magazine, is a gamble that the credibility of the magazine’s name and its no-advertising stance can translate into the field of health care.

Of course, it is no secret that doctors and other medical providers have objected to some evaluations proposed previously, by insurers and others,

Content and Functionality

The online hospital service will include about 3,000 facilities, and consumers will be able to view a graph showing how intensely each hospital treats patients, on a scale from zero for the most conservative, to 100 for the most aggressive.

Intensity of care is based on time spent in the hospital and the number of doctor visits, while the index reflects the hospital’s handling of nine serious conditions, including cancer and heart failure when it treats patients in the last two years of life.

Assessment

The new Consumer Reports online offering will also include a dollar figure that reflects an average out-of-pocket cost for doctor visits during the last two years of life, for the nine listed conditions, though that doesn’t match up to the charge for any particular service.

Link: http://www.consumerreports.org/health/home.htm

Conclusion

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Filed under: Career Development, Health Law & Policy, Managed Care, Quality Initiatives, Surveys and Voting | 3 Comments »

Doctors and Divorce Settlements

Posted on May 28, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Effects on a Physician’s Financial Plan

[By John R. Connell, MBA, JD, CPA / PFS]

Just because a physician or other couple is getting divorced, does not mean that all previous financial planning has become untenable. The parties’ goals and objectives may remain the same. However, even though assets are divided equally, income and expenses rarely follow the same pattern.

Therefore, savings rates may decrease from previously projected levels. Consequently, the main planning activity for divorcing doctors and spouses may be segregating goals and objectives and fine-tuning the previous financial plan. This is where a healthcare focused financial advisor may be very helpful.

The Advisor

It is likely that a physician focused financial planner will be called upon to provide specific advice related to the actual divorce settlement. Such advice generally includes strategies for disposition of assets, determining reasonable levels of maintenance, and tax and other considerations.

The Process

It is important for the financial advisor providing advice to a first-time divorcing couple to help explain the divorce process to them [doctor client and/or spouse]:

Generally, the first step in a divorce is the service of summons and petitions. The petition briefly states what is being requested. The party that commences the dissolution is, in most cases, the Petitioner (unless both parties commence, in which case each would be called Co-Petitioner).
The person answering the petition files a response and is known thereafter as the Respondent. The response indicates the requests of the Respondent. In no-fault states, no wrongdoing is necessary to obtain a divorce. In states which do not have a no-fault provision, fault is generally required to allow the parties to divorce. Also, jurisdictions may have waiting periods that must pass before the divorce can be finalized. Because many domestic court dockets are quite full, the chances are that most cases will not be heard within the 90-day waiting period.
Discovery may begin at this time. Discovery is used to determine the assets of the parties. Once the assets are determined, each asset must be categorized as either marital or non-marital.

At this point, it may be possible to propose a settlement. In most cases, however, some time will pass before settlement discussions begin.

Temporary Orders

It may become necessary for the case to proceed to the stage of Temporary Orders. At this point many items may be considered, including use of the assets, payment of debts, payments of attorneys’ and accountants’ fees, custody of children, and temporary maintenance. Then the court will issue Permanent Orders, which permanently decide the questions of custody of children, division of assets and debts, and provisions for maintenance and child support.

Separation Agreement

When the parties are amicable, court appearances may not be necessary and the parties may be able to create a separation agreement outlining issues related to custody, maintenance, property, and debt. The financial advisor should feel free, with the client’s permission, to discuss the process with the attorney handling the matter. Because divorces are governed by jurisdictional statutes, each advisor must educate him-or-herself regarding the statutes of his or her individual jurisdiction.

Areas to Consider

A survey of the general areas of financial planning suggests that typical advisory engagements will include cash flow and budgeting, analysis of net worth, estate planning, tax planning, and risk management, including life insurance, disability insurance, property insurance, and umbrella liability insurance. In addition, a planner may be called upon to provide advice on funding for education and other goals.

Post-Marriage Changes

In almost all situations, cash flow is most significantly affected by a divorce. The net worth of the parties will generally be halved, the tax situation may be significantly different, insurance matters may change, estate matters will probably be quite different, and planning for education and other goals may be significantly affected.

As with all financial planning engagements, the planner’s first step should be to understand the assets of the parties and cash flow so he or she can assist the client in formulating realistic goals and objectives. The more focused the goals and objectives, the better the results of the process will be.

Unusual Events

In a physician divorce situation, the financial planner may be faced with certain unusual issues that must be considered. Such items will likely have a significant effect on the future lives of the parties. Major other considerations can include the disposition of the family residence, division of retirement plans (especially with use of a Qualified Domestic Relations Order [QDRO]), structuring of property settlements and maintenance, deferred income taxes and their effects on the property settlement, and analysis of partnership interest and tax shelters, etc.

Assessment

Other physician specific or medical practice management topics include practice valuations and appraisals, practice succession planning, buy-sell agreements and restrictive covenants, potential partner dissolutions and a host of other considerations depending on specific circumstances.

Conclusion

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HIT Congressional News

Posted on May 28, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

New CBO Report

Staff Reporters

Official congressional analysts just dealt a blow to the prospects of broad legislation to boost health information technology, by taking a skeptical view of the savings that would likely result.

Yet, iMBA Inc www.MedicalBusinessAdvisors.com – a sponsor of the Executive Post – took the opposite posture this past summer with release of the Dictionary of Health Information Technology and Security.

Link: www.amazon.com/Dictionary-Health-Information-Technology-Security/dp/0826149952/ref=sr_1_4?ie=UTF8&s=books&qid=1211753612&sr=1-4

The Report

In an analysis released this week, the Congressional Budget Office [CBO] discounted earlier projections of large cost savings that might result from the adoption of information technology, such as digital health and patient records, particularly questioning an estimate of $77 billion a year that appeared in a widely cited RAND Corporation analysis.

The CBO has an important voice in such debates because of its role in calculating how much legislation will cost the federal government.

Assessment

Although the CBO found savings potential under certain circumstances – particularly when information technology was combined with broader reforms – it found that the technology itself was unlikely to generate sizable financial benefits; according to the Wall Street Journal.

Conclusion

Is any practicing physician today surprised with this report; why or why not?

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Filed under: Funding Basics, Health Law & Policy, Information Technology, Surveys and Voting | 1 Comment »

The “Risky Business” of Web 2.0 Doctor Bloggers

Posted on May 16, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

A Mashed-Up Opinion

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]

Today, after personally reviewing far too many blogs, and according to www.NPR.org, there are more than120, 000 health care forums on the Internet with opinions ranging from pharmaceuticals, to sexual dysfunction, to acne.

The same goes for commercial doctor blogs that promote lotions, balms and potions, diets and vitamins, minerals, herbs, drinks and elixirs, or various other ingest-ants, digest-ants or pharmaceuticals, etc. Link: www.MyFootShop.com

And, to other doctors, the blogging craze is a new novelty where there are no rules, protocols, standards or precise figures on how many “medical-doctor” or related physician-blogs are “out there.” Unfortunately, too many recount gory ER scenes, or pictorially illustrate horrific medical conditions, or serious and traumatic injuries. www.physicianspractice.com/index/fuseaction/articles.details/articleID/1136.htm

Of course, others simply are medical practice websites, or those that entice patients into more lucrative plastic surgery or concierge medical practices. Some are from self-serving/credible plaintiff-seeking attorneys wishing to assist patients. Link: www.FootLaw.com

Disgruntled Doctors

But not all physician blogs are geared toward practice information, marketing or medical sensationalism. In fact, just the opposite seems to be the case in extremely candid blogs, like “Ranting Docs”, “White Coat Rants,” “Grunt Docs”, “Cancer Doc,” “The Happy Hospitalist,” “Mom MD”, “Cross-Over Health”, “Angry Docs” and “M.D.O.D.,” which bills itself as “Random Thoughts from a Few Cantankerous American Physicians.” Link: www.thehappyhospitalist.blogspot.com

According to some of these, they are more like personal journals, or public diaries, where doctors vent about reimbursement rates, difficult cases, medical mistakes, declining medical prestige and control, and/or what a “bummer” it is to have so many patients die; not pay, or who are indigent, noncompliant, etc.www.CrossOverHealth.wordpress.com

We call these the “disgruntled doctor sites.” Some even talk about their own patients, coding issues, or various doctor-patient shenanigans.

Privacy Issues

But, according to psychiatrist and blogger Dr. Deborah Peel and others, the problem with blogging about patients is the danger that one will be able to identify themselves – the doctor – or that others who know them will be able to identify them.” Her affiliation, Patient Privacy Rights, rightly worries that patients might tracked back to the individual, and adversely affect their employment, health insurance or other aspects of life.

And, according to Dr. Charles F. Fenton; III, JD and Dr. Jay S. Grife; Esq., MA, both frequent posters to this Executive-Post blog forum, it is certainly true that if a doctor violates a patient’s privacy there could be legal consequences. Under HIPAA, physicians could face fines or even jail time. In some states, patients can file a civil lawsuit if they believe a doctor has violated their privacy. Still, internet privacy issues are an evolving gray-area that if not wrong, may still be morally and ethically questionable. Link: www.patientprivacyrights.org

Opinions May Vary

Our colleague Robert Wachter MD, author of a blog called “Wachter’s World,” says it’s important for doctors to be able to share cases, as long as they change the facts substantially. On the other hand, the author of “Wachter’s World” and a leading expert on patient safety alternately suggests “You might say we as doctors should never be talking about experiences with our patients online or in books or in articles.”

But, he says that “patients shouldn’t take all the information on blogs at face value. Taken for what they are — unedited opinions, and in some cases entertainment — blogs can give readers some useful insight into the good, the bad and the ugly of the medical profession”. Link: http://www.the-hospitalist.org/blogs

Assessment

Well, fair enough! But, the above caveats are a big “if” according to Gene Schmckler of the Institute of Medical Business Advisors, Inc. Link: www.MedicalBusinessAdvisors.com

Eugene Schmuckler, PhD is a behavioral psychologist and stress management expert who opines that “doctors unhappy with their current medical career choice, or its modern evolution, should probably consider counseling or even career change guidance, re-education and re-engineering.” It is very inappropriate to vent career frustrations in a public venue. It’s far better for the blog to be private and/or by invitation only; if at all. Link: www.healthcarefinancials.wordpress.com/2007/12/03/physician-career-development-essay

In My View – Risky Business

I believe that a hybrid mash-up of both views can be wholly appropriate, or grossly inappropriate in some cases. Of course the devil is in the details; linguistics and semantics aside. Nevertheless; what is not addressed in electronic physician “mea-culpas” are the professional liability risks and concerns that are evolving in this quasi-professional, quasi-lay, communication forum.

For example, we have seen medical mistakes, and liability admissions of all sorts, freely and glibly presented. In fact,

“some physicians find that the act of liability blogging as a professional confession that is useful in moving past their malpractice mistakes. And, it is also a useful way to begin a commitment to a better professional life of caring in the future. It helps eliminate the toxic residue and angst of professional liability and guilt. Moreover, as they are unburdened of past acts of omission or commission, doctors should remember to also forgive those who have wronged them. This helps greatly with the process and brings additional peace.”

However, although some may say that this electronic confession is good for the soul, it may not be good for your professional liability carrier, or you, when plaintiff’s attorneys release a legion of IT focused interns, or automated bots, searching online for your self-admissions and scouring for your self-incriminations.

Of course, a direct connection to a specific patient may still not be made and no HIPAA violation is involved. But, a vivid imagination is not need needed to envision this type of blind medical malpractice discovery deposition query even now. www.jbpub.com/detail.cfm?TemplateName=alliedhealth&bc=3342-3&ThisPage=Table%20of%20Contents

Q: “Doctor Smith, I noted all the medical errors admitted on your blog. What other mistakes did you make in the care and treatment of my client?”

And so, the question of plausible deniability, or culpability, is easily raised.

If you must journalize your thoughts for sanity or stress release; do it in print. And, don’t tell anyone about it so the diary won’t be subpoenaed. Then tear it up and throw it away.

Remember, with risk management, “It is all about credibility.” Don’t trash yours!

These thoughts may be especially important if you covet a medical career as a researcher, editor, educator, medical expert or something other than a working-class or employed physician.

Link: https://healthcarefinancials.wordpress.com/2007/12/07/122

Assessment

Remember, there are all sorts of new fangled risks out-there for the modern medical practitioner to consider; so beware!

Conclusion

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FINANCE: Financial Planning for Physicians and Advisors
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Dictionary of Health Economics and Finance
Dictionary of Health Information Technology and Security
Dictionary of Health Insurance and Managed Care

Filed under: Career Development, Health Law & Policy, iMBA, Inc., Insurance Matters, Managed Care, Op-Editorials, Risk Management | 4 Comments »

On Malpractice Award Caps

Posted on May 9, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Struck Down in Georgia

[By Staff Reporters]

The Atlanta Journal-Constitution recently reported that Fulton County Georgia, Superior Court Judge Marvin Arrington, struck down the cap on monetary awards in a medical malpractice case. It was a decision that if upheld on appeal, could undercut a major component of Georgia’s tort reform laws.

Non-Economic Damages

The judge wrote that the legislative cap of $350,000 for non-economic damages, such as pain and suffering, was unconstitutional because it gave special protections to the medical profession.

Assessment

The case has not yet gone to trial, and Arrington’s decision does not apply to other cases. But, if appealed, it would give the Georgia Supreme Court a chance to overturn the caps in malpractice cases. In 2006, the Georgia Supreme Court stuck down another provision of tort reform when it ruled that defendants couldn’t decide in which county their medical malpractice case was tried.

Conclusion

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FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
Dictionary of Health Economics and Finance
Dictionary of Health Information Technology and Security
Dictionary of Health Insurance and Managed Care

Filed under: Health Law & Policy, Professional Liability | 5 Comments »

National Health Insurance [NHI] Survey

Posted on April 14, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

MDs Now Favor Reform – According to AIM

Staff Reporters

According to a study just released in the Annals of Internal Medicine [AIM], a majority of doctors now favor national health insurance [NHI] which represents a thought shift over the past five years.

Survey Results

The study conducted last year found that 59 percent of surveyed physicians supported “government legislation to establish national health insurance,” while 32 percent opposed it, and 9 percent remained neutral. In 2002, a similar survey found that 49 percent of physicians supported the concept, while 40 percent opposed it, reported the Washington Post.

Support Varies Among Specialists

The strongest support for NHI was among psychiatrists (83 percent), pediatric sub-specialists (71 percent), emergency room physicians (69 percent), pediatricians (65 percent), internists (64 percent) and family physicians (60 percent). About 55 percent of general surgeons support NIH or double the level of support in 2002.

NIH Definition

Typically, national health insurance plans involve a single, federally administered social insurance fund that guarantees health coverage for everyone, while in most cases these plans eliminate or substantially reduce the role of private insurance companies.

Conclusion

And so, your thoughts and comments on the above report are appreciated.

Institutional: www.HealthcareFinancials.com

Terms: www.HealthDictionarySeries.com

Filed under: Health Law & Policy, Surveys and Voting | 1 Comment »

Bars to Managed Care Lawsuits

Posted on March 12, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

A Historic Review

By Dr. Charles F. Fenton III; Esq.

Historically, managed care companies have been afforded immunity from negligence and malpractice lawsuits. Several state and federal bars, including ERISA (Employee Retirement Income Security Act of 1974), have insulated managed care companies from liability relating to the treatment of patients.

Likewise, managed care companies have historically been immune from malpractice committed by a health care member of its panel of providers.

State Arena

On a state laws basis, the Corporate Practice of Law often insulated managed care companies from such liability.

The theory underlying this protection was essentially uncomplicated; since corporations are prohibited under the Corporate Practice of Law Doctrine from practicing medicine, they should not be held liable for medical negligence and malpractice.

Recent Updates

However, in recent years, it has become apparent that managed care companies do in fact “practice medicine.” These companies tell their panel of providers how to practice, whether it is in a generalized or specific field of medicine.

For example:

They establish a formulary of approved drugs, limiting those medications available to their subscribers.
They review and then approve or deny needed medical care.
They create economic incentives for patients to be under treated or treated in a predetermined manner.
They effectively minimize referrals to specialists, often at the peril of the patient subscriber and the health care provider seeking that consultation.

Federal Arena

In the Federal arena, ERISA has been the primary deterrent to suits against managed care companies.

Under the theory of Federal preemption, even the lowest Federal regulation takes precedence over any and all state laws. ERISA has however been described as possessing “Super-preemption.”

This term was coined to evince the special deference that courts have displayed to potential defendants who allege defensive protection based upon ERISA.

In the past, most providers ran into the ERISA preemption when a health plan governed by ERISA was contrary to a state law, such as state anti-discrimination law (i.e., a state law prohibiting insurance payment discrimination based on degree).

Assessment

In this context, physicians should understand that liability claims, such as medical malpractice claims, are state law causes of action. Since the Federal ERISA law trumps state laws, bringing a medical malpractice action against an ERISA entity is almost impossible.

Conclusion

Have you ever been involved in such an issue; and what was the outcome? Please comment.

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Institutional: www.HealthcareFinancials.com

Filed under: Health Law & Policy | Tagged: Managed Care | 1 Comment »

The Federal False Claims Act

Posted on February 23, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Understanding Qui Tam

[By Dr. Charles F. Fenton III; Esq]

A civil war era law, titled the False Claims Act (qui tam [in the name of the king]), is increasingly popular with prosecutors who pursue inappropriate billing mishaps by physicians.

Why the False Claims Act?

The FCA rose to prominence because in 1990, the healthcare industry accounted for about 10% of all false claims penalties recovered the federal government. By 1998, the healthcare share was almost 40%. Today, it may be even more.

The “Act”

The False Claims Act allows a private citizen such as your patient, your employee, or a competing doctor to bring a health care fraud claim against you, on behalf of and in the name of the United States of America. The “relator” who initiates the claim is rewarded by sharing in a percentage of the recovery from the health care provider.

Essentially, the “Act” allows an informant to receive up to 30% of any judgment recovered against government contractors (Medicare, Medicaid, CHAMPUS, prison systems, American Indian reservations or the VA systems, etc).

With a low burden of proof, triple damages, and penalties up to $10,000 for each wrongful claims submission, these suits are the enforcement tools of choice for zealous prosecutors pursuing health fraud.

Assessment

All that must be proven is that improper claims were submitted with a reckless disregard of the truth. Intentional fraud is irrelevant to these cases, even if submitted by a third party, such as a billing company.

It is imperative that the attending physicians review all bills before they are submitted to any state of federal agency. The Federal False Claims Act is a federal law that has been on the books since the days of the civil war and which recently has become a tool to battle health care fraud.

So, what do you think about the Federal FCA?

Conclusion

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FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

Filed under: Glossary Terms, Health Law & Policy | Tagged: Charles Fenton, false claims act | 6 Comments »

About CLIA

Posted on February 21, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Clinical Laboratory Improvement Amendments

By Patricia A. Trites; PhD, MPA, CHBC, CMP™ (Hon)

The Clinical Laboratory Improvement Amendment (CLIA) was passed in 1988 and pertains to any healthcare provider or entity that performs any laboratory test.

A Series of Acts

This legislation is actually a series of acts that established quality standards for laboratory testing in order to ensure the accuracy, reliability and timeliness of patient test results regardless of where the test was performed.

Certification Types

Providers must register with the Centers for Medicare and Medicaid Services (CMS) by filling out an application and paying the required fees. These fees vary upon the type or complexity of certificate requested. After completing all of the requirements, the provider will receive a CLIA Certificate.

The four types of CLIA certificates are:

Waived Complexity
Provider Performed Microscopy [sub-group of moderate complexity]
Moderate Complexity
High Complexity

Revised Regulations

In 1997 CMS enacted a new regulation that requires providers to include their CLIA number on all claim forms (ex: HCFA/CMS 1500) that contain requests for payment for clinical laboratory services.

This is to insure that: (1) the provider has a current CLIA certificate and, (2) that the provider is performing only the laboratory tests that are allowed for the particular level of certificate. There are specific regulations and documentation requirements for the different levels of service.

Compliance Issues

A recent study in 2001 found that a large percentage of clinical laboratories were not in compliance. It has been recommended that increased inspection, both announced and unannounced, be instituted to better insure the quality of laboratory services.

The CLIA requirements can be found at: http://www.cms.gov/clia.

Assessment

What has been your experience with CLIA?

Conclusion

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Filed under: Health Law & Policy | Tagged: Health Law & Policy | 5 Comments »

About Medical Malpractice Depositions

Posted on February 8, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Understanding the Legal Process

[By Dr. Jay S. Grife JD MA]

[By Dr. David E.Marcinko MBA]

Depositions are a legal discovery method that deserves specific discussion because the deposition, or oral statement under oath, is such a vital piece of the puzzle.

In general, either party may depose any other person but in general, a deponent has some relevance to the case, whether it be as a fact witness, an expert witness, or a before and after witness (a person who can testify as to the state of affairs of a person before and after the incident in question).

Gaining Insight

Depositions are taken to gain an insight into what information will be necessary in order to prosecute or defend a case. Even more important is that the oral deposition provides the respective lawyer with a chance to evaluate that person’s reactions to stress, to personally see for the temperament of the witness, to view the witness’ demeanor, and to analyze how that person responds to spontaneous events.

Deposition Format

The format is typically oral and in person question and answer dialogue although recent technology has permitted depositions via telephone conference, video-conference, and various internet medium exchanges. Depositions can be taken via written question format but often this type has limited value because the deponent will not be asked any follow-up questions and a statement cannot be investigated further.

Do’s and Don’ts for Doctors

There are many lists of do’s and don’ts that lawyers often provide their clients, but the fundamental character of the deposition is for the deponent to tell the truth. While it is rare that a trial sees the Perry Mason moment, these do in fact happen and when it does, the result is often exactly what viewers of that classical television series see.

Skeletons in the Closet

As a rule, in light of the attorney client privilege, I insist upon knowing whatever skeletons are in my client’s closet, past or present. It is of ultimate importance that a client confides the truth to their lawyer so that the any adverse issue can be addressed through cognizant decision, rather than surprise.

In a recent case, my client was being deposed and admitted to me that she was a lesbian. Her sexual preferences did not matter but the fact that she disclosed a misdemeanor arrest for marijuana did. I advised her to tell the truth about both issues and explained why this was important. During her deposition, when the homophobic defense counsel abrasively probed her sexuality, she readily admitted her own sexual preference. That was fine but the defense lawyer continued to “push her buttons’ until she finally screamed at him to “shut the f… up”.

The die was cast because the next line of questioning involved her arrest record as to the marijuana. When my client denied any other arrests but for the drugs, it was simple for the defense counsel to show her documentation of four earlier felony arrests including one for fraud, which ultimately cost her the case.

The important fact to remember is that we all have a past and that being truthful as to its content can often dictate a successful outcome of a case.

Conclusion

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FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

***

Filed under: Health Law & Policy | Tagged: Malpractice Liability | 2 Comments »

The Medical Malpractice Discovery Process

Posted on February 7, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Understanding the Legal System

By Dr. Jay S. Grife; JD, MA

Since most medical negligence cases are fact driven, the topic of discovery demands a specific and integral role in the trial process. Discovery simply is the methodology used in American jurisprudence for each side to discover all of the evidence that is available in the case and to have that documentation analyzed. While specific states have rules that may limit discovery, the purpose is to prevent trial by ambush.

Federal Rules of Civil Procedure

According to the Federal Rules of Civil Procedure [FRCP], discovery can include written interrogatories or questions, requests for production, deposition, either oral or through written statements, request for examination, request for inspection of evidence, requests for admission, and finally independent, or as Plaintiffs’ lawyers commonly label them, compulsory medical examinations.

Definition and Scope

The scope discovery methods are generally a book onto itself. So, suffice it to say, discovery is the process where each party exchanges information so the merit of their respective cases can be evaluated. Lawyers will use this evidence in developing the theory of their case and the order in which that evidence will be presented to the trier of fact.

Conclusion

While discovery is often viewed as a mundane part of the litigation process, in reality it is the very topic that often proves dispositive in the ultimate outcome of a medical malpractice case; whether it is tried, settled, or rejected.

And so, your comments are appreciated?

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Terms: www.HealthDictionarySeries.com

Filed under: Health Law & Policy | Tagged: Malpractice Liability | Leave a comment »

Malpractice Trial Types for Doctors

Posted on February 6, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Understanding Different Trial Types

[By Dr. Jay S. Grife; JD, MA]

There are two types of malpractice trials available to doctors involved in litigation; by jury or a bench trial exclusively by the judge.

Jury Trial

In a trial by jury, the judge determines the law and the jury determines the facts.

Bench Trial

In a bench trial, the judge wears both the hats of being the trier of law, and the trier of fact. The U.S. Constitution guarantees a trial by jury. If a party does not request a jury trial that right may be deemed forfeit and by the same token, both sides must agree to waive a jury trial.

Which Trial Type is Best?

So, which trial type is best, and why would anyone choose to have a case heard by a judge as opposed to a jury, or vice versa? The reasons are mainly based on preconceived notions about judge and juror biases.

Generally, most litigants favor a jury over a judge because the decision is put into the hands of many rather than in the hands of one. Plaintiff patients usually like juries because lay individuals are believed to be more sympathetic, and a Plaintiff can appeal to the emotions of a jury.

Conversely, Defendant doctors usually prefer bench trials because a judge is thought to be more objective in deciding a case. Requesting a bench trial can also result in a much quicker trial date. Since court dockets in most large cities are becoming increasingly congested, the time difference between a jury trial date and a bench trial date can be literally years.

Assessment

None of the perceptions about the benefits of a jury trial or a bench trial apply to all situations—every case is different. And, there is at least some empirical evidence that some of the commonly held conceptions about bench and jury trials are actually misconceptions.

For example, while it is almost universally believed that juries tend to favor Plaintiffs and award much higher monetary amounts, a recent study by the Department of Justice suggests that judges favor Plaintiffs and return higher verdicts.

Still, jury trials outnumber bench trials by about two to one.

Conclusion

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FINANCE: Financial Planning for Physicians and Advisors
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Filed under: Health Law & Policy | Tagged: Malpractice Liability | 2 Comments »

Certificates of Need [CON] Questioned in Alabama

Posted on February 4, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Good Health Policy or Competitive Anachronism?

By Staff Writers

Modern Healthcare just reported on a new study by an Alabama policy research group that questions whether the state needs to have a certificate of need process in place to limit the growth of healthcare facilities in the state.

The API Study

The study, by the Alabama Policy Institute [API], argued that the state’s CON regulations should be repealed. Its author, Roy Cordato, contended that if the state removes its CON restrictions, doctors, clinics and hospitals would be able to respond to competitive marketplace needs more quickly, which would actually improve the efficiency of healthcare delivery there.

Methodology

To conduct the study, researchers looked at the experience of other states with CON programs.

Assessment

It found that 13 states have recently repealed CON regulations. Removing CON requirements has given consumers improved access to care in those states. Meanwhile, there’s almost no evidence that Alabama’s existing CON process has helped to reduce healthcare costs.

Conclusion

And so, are CONs needed for competitive modernity, or are they relics of the misguided political past?

Related info: www.HealthCareFinancials.com

More info: The US Healthcare Certificate of Need Sourcebook

www.beardbooks.com/beardbooks/the_us_healthcare_certificate_of_need_sourcebook.html

www.HealthcareFinancials.com

Filed under: Health Law & Policy | Tagged: Health Law & Policy | 2 Comments »

New MSA / HSA Patient Identification Programs

Posted on January 31, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Further Implications of the U.S. Patriot Act for Hospitals

By Dr. David E. Marcinko; MBA, CMP™

By Hope R. Hetico; RN, MHA, CMP™

With the recent popularity and growth of health savings accounts (HSAs) and / or medical savings accounts (MSAs), compliance with the USA Patriot Act of 2002 has become an important issue for these new, hybrid health insurance products.

Many of these insurance plans place patients and insurers into relationships with shared information institutions like hospitals, healthcare organizations, medical clinics and patient clients.

The “Online” Connection

This occurs because many, perhaps even the majority of HSAs, MSAs and high deductible healthcare plans [HD-HCPs] are opened online, as patients and insurance company clients use Internet search engines to find the “best” policy type to meet their needs.

Ditto, for more traditional health insurance plans, as well?

Example:

For example, on October 1, 2003, Section 326 (Customer Identification Program) of the US Patriot Act went fully into effect, requiring the implementation of reasonable procedures to verify the identity of new customers and certain existing customers opening a new MSA or HSA account.

And, Section 3261 of the Act also requires banks, savings associations, insurance companies, hospital and medical union credit unions, and certain non-federally regulated banks to have the CIP fully implemented. Broker-Dealers [BDs] in securities are subject to similar, but slightly different rules.

Bank Secrecy Act [BSA]

For additional compliance, The USA Patriot Act also amended the Bank Secrecy Act (BSA) to give the federal government enhanced authority to identify, deter and punish money laundering and terrorist financing activities.

Increased Hospital Vigilance

This, the passage of the USA Patriot Act – and these important derivatives – means that affected hospitals and healthcare organizations must be more vigilant about laws concerning money laundering; reporting of disease and quarantine; and cyber attacks.

Moreover, it means that healthcare organizations must adhere to the Act, regarding affected health insurance policies, by meeting its Customer Identification Program (CIP) and anti-money laundering requirements.

Assessment

Whatever the financial outlays required for compliance – there be very large savings later if affected hospital assets and patient health insurance information is safeguarded against attacks of virtual or real assets.

Conclusion

And so, what is your opinion on the above health law and policy?

Related source:Marc B. Royo and David B. Nash. “Sarbanes-Oxley and Not-for-Profit Hospitals: Current Issues and Future.”

Speaker: If you need a moderator or a speaker for an upcoming event, Dr. David Edward Marcinko; MBA is available for speaking engagements. Contact him at: MarcinkoAdvisors@msn.com

Filed under: Health Law & Policy | Tagged: Health Law & Policy | 7 Comments »

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