Articles Posted in Healthcare Reform

cross-1-971655-m.jpgA premise of the Affordable Care Act (ACA) is to provide “affordable coverage” to more Americans with the idea being that newly insured individuals and families will have enhanced “access” to quality health care. Whitehouse Policy Snapshot. Particularly important is access to primary care, the means by which millions of Americans can obtain preventive care and better wellness as a way to avoid more expensive health care treatment in, for example, an emergency room. Following enactment of the ACA, there has been a strong push for previously uninsured Americans to obtain insurance via the new Health Insurance Market Place.

Atlanta and Augusta, Georgia Health Care Law Firm

That push appears to have succeeded to some extent. According to the White House, by virtue of the ACA, 8 million people have signed up for private insurance in the new Health Insurance Market Place, 3 million young adults have been able to stay on their parents’ health plan, and 3 million more people were enrolled in Medicaid and CHIP (as of February 2014) compared to before the Health Insurance Market Place opened. See FACT SHEET: Affordable Care Act by the Numbers. But being “covered” under insurance may not always equate to real access – or timely access — to health care. One reason for this reality is that as the numbers of enrolled insureds have increased under the ACA, the shortage of primary care physicians appears to have increased. According to Kaiser Health News (citing HRSA), about 20 percent of Americans now reside where there is an inadequate presence of primary care doctors to meet their health care needs. HRSA provides detailed demographic information demonstrating what areas/populations are medically underserved. Citing a report by the Association of American Medical Colleges, KHN reports that absent changes, there will be a shortage of 45,000 primary care doctors in this Country by 2020. And many doctors are leaving primary care practice due to the strains of diminishing reimbursement rates and an overbearing regulatory environment in which they ply their trade. So, with millions of new insureds needing the promised access to primary care, and an insufficient number of primary care doctors to deliver the care, how will the promised heath care “access” be obtained?
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doctor-patient-relationship-673855-m.jpgThe strain of health care reform and third-party-payer bureaucracy will likely continue to push physicians towards non-traditional business models for practicing medicine. This is especially true for non-specialists. As the trend of physicians to find viable practice model alternatives grows, it is widely expected that the number of direct pay and concierge physician practices will increase significantly.

Atlanta Medical Practice and Health Care Law Firm

Our health care law practice is particularly interested in direct pay and concierge medicine legal issues. While the particulars may vary, the typical concepts upon which such medical practices are built are fixed, affordable fees for patient “membership” in the direct pay/concierge program, 24/7 access to a physician, much more time and involvement in the physician-patient relationship, better preventive care and planning, and a more rewarding professional life for the physician without (or with reduced) headaches of a third party payer medical practice.

The legal and business issues raised by setting up such a practice, however, are important and must be carefully evaluated. For example, one such issue is whether the details of a particular direct pay or concierge model violate Medicare billing rules. The federal laws that govern Medicare patients and federal reimbursement can make it very risky for concierge practices to charge Medicare beneficiaries retainer fees for certain medical services. Medicare billing rules have heavy consequences for double billing of a Medicare covered procedure. The setup of the concierge practice model has the potential to trigger this issue, and some practitioners may be better off opting out of Medicare entirely. However, physicians also have the option of accepting or not accepting assignment, with their choice affecting who they bill for their services. Physicians accepting assignment will bill Medicare directly, while those not accepting assignment bill the patient, who in turn seeks reimbursement from Medicare.
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calculator-stethoscope-1004851-m.jpgMore than ever, physician innovation is needed in business models for medical practices to deal with problems associated with our cumbersome third party payer healthcare system. Our Atlanta health care law firm supports direct pay practice medicine as a positive trend. Many doctors are now setting up direct pay (a/k/a “concierge”) medical practices. This practice model in its purest form eliminates third party payers, and the patient-“member” of the concierge plan pays a fixed, prepaid fee for a menu of physician services that typically offer the patient greater access to the doctor. Varying hybrid concierge models exist that include some limited use of insurance plans. Direct Pay practices will likely continue to emerge and flourish as doctors seek smart business alternatives to deliver care in spite of a challenging regulatory and third-party payer healthcare environment.

For patients, belonging to a concierge practice usually means more access to and time with a doctor who really gets to know them and increasingly with flexible, affordable financial options to suit individual needs. For doctors, direct pay practice models can offer handsome compensation and desired relief from the medical hamster wheel of having to see a patient every six minutes to make reimbursement numbers work, with all the red tape and other burdens that attend having to spend too much time dealing with insurance companies. So what is the downside to a direct pay practice?

There are many legal and business issues unique to health care that confine doctors in how they set up a medical practice. These issues must be carefully evaluated to ensure medical compliance and avoid unpleasant business issues down the road. Although policy makers have not created direct restrictions prohibiting the concierge practice model, for those physicians who want to start or convert to this model, many legal considerations warrant caution and special care in setting up the business. Medicare presents a strong example. Doctors that accept Medicare reimbursement can either accept assignment and bill Medicare directly for their services or seek payment from the patient (who, in turn, seeks reimbursement from Medicare). Physicians can execute “participation agreements” with Medicare and receive greater reimbursement (5%). However, Medicare participating doctors cannot charge more than what is allowed by the Medicare fee schedules. Non-participating doctors who do not accept assignment cannot charge more than 115% of applicable amounts in the Medicare fee schedules. Violations of Medicare assignment rules can be prosecuted under the federal False Claims act.
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whistle-718988-m.jpgControlling healthcare costs is essential to the economic security of the United States. Total healthcare spending in the U.S., already an astronomical $3 trillion dollars in 2013, is expected to grow almost 6% annually through 2022.1 Spiraling healthcare costs is an obvious problem on many levels, including the fact that, through Medicare, the federal government is the single largest purchaser of healthcare in our third party payer system. Total Medicare spending is expected to increase from $523 billion in 2010 to $932 billion by 2020.2

The Patient Protection and Affordable Care Act, commonly known as the Affordable Care Act (ACA) or “Obamacare,” has frequently been in the spotlight for website issues and intense political debate over the law. However, a less publicized – but critical – aspect of the ACA is its intended role of curbing the rise in our nation’s healthcare costs.3
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hospital-room-449234-m.jpgMedicare payments to community health centers are expected to increase by as much as $1.3 billion over the next five years, according to Bloomberg News, based on a new prospective payment system. On April 30, 2014, the U.S. Department of Health and Human Services’ Centers for Medicare & Medicaid Services (CMS) rendered a Final Rule that, among other things, implements methodology and payment rates for a prospective payment system (PPS) for federally qualified health centers (FQHC), effective October 1, 2014. The Final Rule stems from the Affordable Care Act’s (ACA) provisions to establish a new payment system for FQHC services under Medicare Part B (supplemental medical insurance) based on prospectively set rates.
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dark-dollar-2-1193021-m.jpgShopping savvy largely derives from the discomfort of parting with money. If health insurance pays all (or most) of the bill for healthcare services, why should the patient care what the cost of the healthcare is, how such cost is calculated, or how cost might be reduced? But as a patient begins to spend money out-of-pocket for healthcare, his attention to cost and his interest in how cost is determined and what alternatives might save money quickly increase. When his money is spent, he tends to want to know more about his medical bills, what the details are and, ultimately, how price is calculated. Historically, how healthcare is priced has been all but impossible for consumers to ascertain. Now, there is a push in the healthcare industry toward greater pricing transparency, which may dovetail well with increasing financial responsibility placed upon patients for their healthcare costs. Many experts argue that greater price transparency will lead to more intelligent “shopping” by patients for their healthcare, which in turn may (at least theoretically) put downward pressure on healthcare costs.
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us-capitol-building-2-431642-m.jpgHouse Republicans gained the support of 27 Democrats and passed The Suspending the Individual Mandate Penalty Law Equals Simple (SIMPLE) Fairness Act (H.R. 4118), a bill that would delay for one year the Affordable Care Act (ACA) individual mandate penalty tax for those failing to buy health insurance before the deadline this month. As reported recently in the Washington Post, while destined to fail in the Democratic-controlled Senate, this Bill nonetheless underscores mounting pressure upon the Administration and Democrats in an election year, as the troubled healthcare law struggles to get traction in its implementation and with voters. Republicans want mileage in November from increasing public confusion and disenchantment about the ACA. They seize upon much publicized trouble spots of ACA implementation, such as the disastrous rollout of the website, cancelled policies, patients unable to stay with the doctor they prefer, and higher insurance premiums.

Insurers and proponents of the ACA view the individual mandate as critical to the financial mechanics of the health insurance reform intended by the ACA, namely expansion of insurance coverage to most Americans irrespective of health conditions and without lifetime or annual caps on benefits. With the new law’s imposition upon insurers of a requirement that they insure all Americans — even the most high-cost patients — it is important that the young and healthy, whether they need insurance or not, pay insurance premiums to help fund the insurers’ cost of paying for the health care of unhealthy Americans. Hence the law’s controversial individual mandate that everyone obtain coverage and pay insurance premiums or, alternatively, pay a penalty tax based on household income. The penalty is to begin this year, phased in at 1 percent of taxable income, then 2 percent in 2015, and 2.5 percent in 2016.
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medical-equipment-1342025-m.jpgThe Affordable Care Act (ACA), widely known as “Obamacare,” will create new opportunities for primary care doctors (and some specialists) who weigh starting or converting to a direct primary care model. At first blush direct care medicine practices, also known as “concierge,” “boutique” and “retainer-based” practices, which charge patients a monthly or annual membership fee and tend to exclude (or limit) third party payer involvement (one of the strong points for pursuing the model), would seem limited as an opportunity by the ACA’s objective of getting everyone “insured.” But the opposite may prove to be the case. Actually, the ACA may drive a strong need for new concierge medicine doctors.

A New Era of High Deductibles

While a stated goal of the ACA is to decrease the number of uninsured Americans, a consequence of the ACA will likely be that many newly insured patients under plans obtained via the new insurance exchanges will soon realize that due to very high deductibles, much or all of the costs of treatment (i.e., all non-preventive care) incurred over the course of a year must be paid out of pocket by the insured. For a typical household in Richmond County, Georgia, for example, as of this writing there are 18 plans available via the exchanges: 7 “Bronze Plans,” 6 “Silver Plans,” 4 “Gold Plans,” and 1 “Platinum Plan.” For the Bronze Plans, the annual deductibles range from $4,000 to $6,300. It is widely expected that most people will seek to minimize their premiums and opt for one of the Bronze Plans, only two of which have annual deductibles of less than $5,000.

What will that mean? That will mean most doctor visits (excluding preventive care) will be paid out of pocket by the “insured” patients who presently may not realize what is in store for them by way of doctor bills. As the public becomes aware of how the ACA will actually work for them (i.e., even though they are “insured” they are writing checks for doctor bills), the appeal to consumers of concierge options will increase. As recently reported in the Wall Street Journal, “People with deductibles of $5,000 or more should think about how many times a year they typically see the doctor and for what, keeping in mind that annual checkups are free under the ACA. If doctor visits typically cost $150 and the patient has six appointments a year, a concierge practice offering the same services for $40 or $50 a month might be cheaper.” Pros and Cons of Concierge Medicine (November 1, 2013).
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dollars-1412644-m.jpgThe price Americans will pay for Affordable Care Act (ACA) changes may include lost wages and job benefits due to the price tag of ACA compliance for employers. It may seem to many like a good and noble thing to require insurers to insure everyone irrespective of health conditions and the attending financial risks and costs the insurer must assume; to make all individuals buy health insurance, irrespective of whether they want or need it; and to force employers to provide what the government decides says is the right kind of health insurance to employees. But nothing is free or without consequence, especially sweeping legislation intended to overhaul healthcare. Unfortunately, while the ACA will undoubtedly benefit many Americans, the true costs of the ACA will prove unaffordable for many employers and likely result in lost wages and job benefits for many Americans.

For example, the University of Virginia and United Parcel Service recently informed employees that it would no longer offer healthcare coverage to employee spouses able to obtain insurance from other sources. UVA announced what it described as “major changes” in their health plan options to employees and explained the changes were necessary based on UVA’s projections that the ACA will result in $7.3 million in additional costs associated with its health plans in 2014 alone. UVA is attempting to defray the cost of complying with the ACA by cutting health benefits to many spouses. UPS indicated that costs of complying with the ACA contributed to its need to drop spouse coverage, which will affect as many as 15,000 employees. UPS explained that due in part to the ACA, it is “increasingly difficult to continue providing the same level of health care benefits to our employees at an affordable cost.” Other employers have limited non-management workers’ hours to 29.5 for the purpose of circumventing ACA requirements that are triggered by having 50 or more “full time” employees (i.e. 30 hours or more, under the ACA). For example, Forever 21 recently announced to its employees that effective August 31 they would not be full-time employees.
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freedom-2-889854-m.jpgNationwide there is much consternation and debate about what sort of “healthcare reform” might cure our health care system’s many ills, its growing price tag in particular. Of course, there is no shortage of answers and opinions about possible solutions or improvements. To be sure, the issue is highly complex, so there is room for much concern and debate. But since quality of health care is indisputably better than ever, it is important to focus on what actually needs to be reformed. The health care itself is good – what needs to be reformed is how we pay for and how we reduce the need for health care.

That the root cause of many of our health care system’s woes is a broken third-party payer system is difficult to deny. Rather than healthcare provider and patient conducting a simple economic transaction – one party provides care, the other party receives and pays for it – our healthcare system’s current payment methodology requires involvement of a third party insurer (or other “payer”) with a powerful financial interest in the provision of health care, no real ability to evaluate the patient and her health needs, yet strong influence in decisions affecting how or what health care is provided. While the patient wants (and expects) the doctor to provide medical judgment and care, she wants (and expects) someone else (the payer) to pay for it.

Before World War II, this horrible dynamic — a third party paying medical bills and influencing medical decisions — did not exist as it does today. With the advent of “health care insurance” as an employer-sponsored benefit to compete for employees, the American consumer’s mentality about health care began a transformation that led to the current consumer’s mindset: “who will give me health care”? Or, “where is the health insurance to which I am entitled?” This entitlement thinking drives the third party payer system and increases health care consumption.
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