Healthcare

I was fortunate to have been invited to co-author a chapter on merit-based savings distribution models in The ACO Handbook: A Guide to Accountable Care Organizations, Second Edition with Bo Bobbitt.  Bo is a seasoned health care attorney who works with many ACOs and clinically integrated networks. He is with the Smith Anderson law firm in Raleigh, North Carolina, and speaks and writes on this subject extensively.

Breaking down the siloes that exist in our fragmented healthcare system requires the collaborative commitment of clinicians and facilities, and true clinical integration fosters (and, in turn, is promoted by) teamwork, transitional care, reduction in clinical variation, and information-sharing. For the ACO model to be successful, a correlation must exist between financial incentives and the common goals of improving experience of care for patients, improving the health of populations, and reducing the per capita cost of healthcare. 

I was offered the opportunity recently to observe a medical examination of a child in Guatemala, and I was able to accept because I didn’t have to leave home. The U.S.-based doctor examined the patient with the help of medical personnel in Guatemala, special instruments designed to transmit high-resolution images, and a high-speed internet connection.

Of course, I had heard about advances in telehealth, but until I saw the clarity of the images on the screen and heard the detail in the sound transmission, I really had no idea how much the field had progressed. We could see inside the child’s ear with detail that rivaled an in-person exam. Her heartbeat was loud and distinct. It was as if we were sitting in her local doctor’s office, conferring with a specialist – which, in a way, we were.

Given the regulatory risks associated with failure to pay fair market value (FMV) in certain physician compensation arrangements, parties contracting with physicians for services are rightly concerned about FMV and are justified in their efforts to find effective means by which FMV can be determined and documented.

One such means for the assessment of FMV is the use of widely available published survey reports on physician productivity and compensation. Several sources exist for this information, and there is a broad acceptance of published surveys in the industry as indicative of compensation for physicians in many specialties. Let’s look at what the government—specifically CMS—says about the use of surveys.

In the past several months, I’ve had the opportunity to discuss trends in the healthcare industry with some of the best minds in the business, and one topic keeps coming up – population health. What has surprised me is that everyone I talked to places a different emphasis on aspects of the larger concept. It’s as if there isn’t a universal agreement on the definition of population health.

I think it’s safe to say that the focus of population health is to improve chronic disease management, reduce risk factors and improve gaps in care, but there are a number of strategies available to reach those goals.

The recent Citizens Medical Center settlement brings to resolution yet another qui tam action which, among other facts, underscores the compliance risks of hospital compensation arrangements with physicians in excess of fair market value. The USDOJ announced last month that Citizens Medical Center will pay $21,750,000 to settle the False Claims Act allegations involving over two dozen individual physicians of at least six different specialties and practice groups. The opinion of U.S. District Court Judge Gregg Costa of the Southern District of Texas in ruling on the Defendant’s motion to dismiss the plaintiff’s FCA allegations is instructive particularly with regard to the compensation by the hospital of its employed cardiologists.

On April 16, 2015, President Obama signed the Medicare Access and CHIP Reauthorization Act into law, which repealed the much-maligned sustainable growth rate formula. Physicians are breathing a sigh of relief as the SGR repeal prevented steep reimbursement cuts that have been threatening physicians since the late 1990s. Now that the focus is off SGR, physicians and policy makers can shift focus to new patient care models that are supported under MACRA.

Healthcare machinery and equipment (M&E) change hands daily across the country through larger business transactions or as individual assets or groups of assets being bought and sold. M&E values can impact the viability of the transaction or the parties’ compliance with complex laws governing the deal. Below are easy-to-remember tips on the Purpose, Process, and Pitfalls of M&E appraisals.

It’s a sign of the times – Dr. Phil McGraw attended this year’s Consumer Electronics Show to pitch his new app “Doctor on Demand.” His app allows a patient with a smart phone or tablet to access a board-certified doctor or psychologist for about the cost of an office visit co-pay. DOD has 1,400 physicians and 300 psychologists in its network.

With record attendance of over 450 professionals attending AHLA’s Transaction Program in Nashville last week, it’s evident that healthcare transactions are top of mind. One might think the industry would be further down the road in defining the latest iteration of payment and delivery system models, but the healthcare industry appears to be a marathon, rather than a sprint.

Today’s sessions at AHLA’s Transactions Program made me reflect on the fact that time has taught us valuable lessons about what not to do in the future. An initial wave of hospital affiliations and acquisitions has occurred with mixed success.

Three recognizable trends were dicussed today that are reshaping healthcare transactions:

I had the honor of participating in the American Health Lawyers Association’s inaugural Women’s Leadership Institute today. Our keynote speaker was Dr. Antonia Novello, former Surgeon General of the United States. Dr. Novello was the first woman and first Hispanic to serve as Surgeon General, and her talk set the tone for a great day of sharing and learning for those of us committed to inclusion in the workplace.

Her presentation provided practical advice on how women can open doors to opportunity. As I reflect on her words, I realize her 10 key points can help anyone – men, women, black, white, Hispanic – improve their personal brands, and be more effective in their professional and personal relationships.

Healthcare’s Triple Aim – providing better care for individuals, better health for populations and lower costs overall – is closely related to the benefits of clinical integration. In a successfully integrated organization, patients have increased satisfaction, providers benefit from higher reimbursements, and payers recognize lower costs of care. But is integration effective and can it be achieved?

Clinical integration has been part of our discussions since the 1980s. Thirty years ago, the primary aim of integration was to provide the means for hospitals to control costs and improve negotiations with payers. We witnessed a move toward larger organizations in the 1990s as hospitals initiated a record number of institutional mergers and practice buyouts. Merely merging or expanding, however, has not necessarily proved effective. 

As a healthcare appraiser, one question I have heard many times over the years is “do I need to get a valuation?” Typically, the primary goal of a healthcare appraisal is to demonstrate due diligence around fair market value (FMV), so the question may be better stated as “what constitutes adequate FMV due diligence when contracting with physicians?”. While there is no universal answer to this question, there are some points worth considering that should factor into the decision.