ENT, Bundled Payments, Future Reimbursements

[NYBills987]

Hey everyone,

I'm not an incredibly frequent poster, but I am most definitely going into ENT. I had a question that I was hoping would generate some good discussion and help me understand the future of ENT a little bit (not as a "should I or shouldn't I go into this field" discussion but more as a "I've been curious about this for awhile" type of discussion).

I have talked to a number of people in the hospital about the future changes that are coming to medicine in general and how they will affect reimbursements. This has generally been stated with a negative connotation and my understanding is that it will negatively impact income because bundled payments will make hospitals the responsible payer for deciding how to distribute money for an overall hospital stay. This is in contrast to direct fee for service payment that currently exists.

I haven't seen any threads on this recently and no one I've talked to has been able to explain how this will specifically change the field of ENT. Thanks for any responses, sorry if this is a re-hash of something that was already discussed.

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[DrBodacious]

I am sure hospitals are lobbying to get control of the cash flow, but, with the current reimbursements for surgeries, I can't see having them lowered much more and still have the risk and time worthwhile.

Worst case scenario: docs get screwed by hospitals on bundled payments - there are several things that we have a recourse.

A lot can be done in the office. I did a transcanal medial graft tympanoplasty with a tragal perichondium graft for a 40% perf in the office under local a couple weeks ago. Pay is the same. I had to cover a few disposables like gel foam and sterile drapes, but I avoided all of the hospital paperwork and waiting for turnover, etc, and was seeing another patient right away when I was done.

If ENTs did more moderate sedation (like dentists or oral surgeons), we could do even more.

Surgery centers are another option. I am a minority owner in a surgery center. It depends on your state regs, but you can also get a certificate of need for a operating room in your office and get paid the facility fees yourself. (mind you the surgery center facility fees are lower that what a hospital gets). There is a lot of red tape to navigate with that, but the revenue generally makes it worth it.

So, I would hope that hospitals would keep it in the doctors best interest to do cases at their hospital and keep reimbursements where they are or increase them. Otherwise, I predict an exodus from the hospital.

 

[resxn]

I will add a counterpoint to DrB. I do agree that in many circumstances bundled payments are not going to affect physician reimbursement. But there are some cases, without doubt in my mind, where some docs (including ENT's but probably much more of a big deal for hospital based surgical practices like joint replacement ortho, cardiothoracic/vascular, gen surgery, etc) will get screwed.

To be clear, bundled payments are a reality in some locations across the country right now and the ACA allows, and in fact encourages, their widespread adoption. How they work is that for inpt care, a hospital will get a lump sum of money for the pt. The amount of money will be based on the dx and not entirely based on the radiology/procedures/labs performed with the exception of modifiers. The physician does not get reimbursement from the insurance. Rather, the surgeon is reimbursed by the hospital. All services are reimbursed in this fashion.

Say a pt comes into the ER with a neck abscess. You take them to the OR to drain. It's substantial so you place in ICU for a day post-op, step down for a couple of days, and then d/c home. A couple of CT's, lots of labs, etc. The insurance pays $X. The hospital will not lose money on this pt so they will take what they need to not lose, plus a certain amount for profit to subsidize the uninsured. The physician will then get a percentage of $X based on what's leftover which is divided among all other physicians and ancillary services invloved. The more who claim some of the pot, the lower your %.

Do not think for a moment that if a hospital who has ample ENT coverage (say 4+ ENT's or more appropriately 4 different ENT practices) will not favor one practice over another. Most community hospitals need 4 ENT's. Larger or higher trauma hospitals need more. Why wouldn't a hospital low-ball one ENT group in favor of another and therefore offer better contractual rates for care to the favored practice. Of course they will. That's what they do already to drive toward one anesthesia group or one hospitalist group or one radiology group.

DrB makes some good points about countering the bundled payment system. I make more money as a partner in my surgery center than I do as the managing partner of my 7 group ENT practice. I also am a partner in a compounding pharmacy, a sleep center, hearing aid sales, and an allergy practice. Together, I am far better off with the non-medical practice investments than with the actual collections from medical practice. Of course, those investments depend on my generation of pt business, but diversifying your cash flow will definitely help offset the direct decrease in reimbursement that physicians will see in one form or another over the coming years.

 

[KinasePro]

Surgery centers are another option. I am a minority owner in a surgery center. .

I make more money as a partner in my surgery center than I do as the managing partner of my 7 group ENT practice. I also am a partner in a compounding pharmacy, a sleep center, hearing aid sales, and an allergy practice.

Quick question: won't being a partner in a surgicenter lead to some type of "self referral" that could put you in hot water? How do you determine which ancillary services count as "self referral"? Do you just never operate at that surgicenter or never refer patients to your own allergy center?

Thanks for this discussion btw. I myself am applying to ortho, but I'm always lurking this this ENT subforum bc you guys consistently deliver solid content re: business of medicine.

 

[DrBodacious]

Quick question: won't being a partner in a surgicenter lead to some type of "self referral" that could put you in hot water? How do you determine which ancillary services count as "self referral"? Do you just never operate at that surgicenter or never refer patients to your own allergy center?

Thanks for this discussion btw. I myself am applying to ortho, but I'm always lurking this this ENT subforum bc you guys consistently deliver solid content re: business of medicine.

I feel like this is a common point of confusion in medical school. You are not restricted from operating medical businesses that share patients. This is not uncommon actually. You can be partners in multiple medical practices, surgery centers or ancillary service facilities and get paid to provide services at all of them, and refer patients preferentially to your own entities. You just are not allowed to pay or be paid kickbacks for getting reffered or referring patients, respectively. Examples include cash payments, gifts, or excessive (above market value) payments for services, rent or other business transactions between the practices. Apparently, before Stark laws, docs used to send elaborate gift baskets to each other around Christmas, etc, and that is no longer allowed.

Edit: Of course, things are much more complicated. I am not a Stark law expert, but many doctors have medical businesses they are involved in. You usually just have to check the Stark regulations as you go, so you are not doing things the wrong way. I think one "no-no" is that doctors can not own hospitals...

 

[DrBodacious]

....To be clear, bundled payments are a reality in some locations across the country right now and the ACA allows, and in fact encourages, their widespread adoption. How they work is that for inpt care, a hospital will get a lump sum of money for the pt. The amount of money will be based on the dx and not entirely based on the radiology/procedures/labs performed with the exception of modifiers. The physician does not get reimbursement from the insurance. Rather, the surgeon is reimbursed by the hospital. All services are reimbursed in this fashion.

Say a pt comes into the ER with a neck abscess. You take them to the OR to drain. It's substantial so you place in ICU for a day post-op, step down for a couple of days, and then d/c home. A couple of CT's, lots of labs, etc. The insurance pays $X. The hospital will not lose money on this pt so they will take what they need to not lose, plus a certain amount for profit to subsidize the uninsured. The physician will then get a percentage of $X based on what's leftover which is divided among all other physicians and ancillary services invloved. The more who claim some of the pot, the lower your %....

Good post, resxn. I think this is the scenario that we as physicians need to resist. If we accept the scenario of getting a percentage of what is left over, we are really being suckered. Unless physician acceptance of bundled payments is legislated, we do not have to participate with them. If the hospital wants to go that route, then physicians should get a reasonable fee for their services. If my hospital stopped providing fair reimbursements, I would start looking for everything possible I could do outside of the hospital and cancel my hospital privileges.

I think if we went to bundled payments the hospital should be the primary responsible party regarding efficiency. Doctor's fees are usually much less than hospital fees, and doctors do not have control over the hospital's expenses. (The neck abscess example is perfect here). The hospital can do things like establish protocols like ID approval for certain drugs, establish better contracts with pharm companies, buy cheaper supplies, get better social work support for placement and home health arrangements, etc. They have much more fat to trim then we do.

Essentially, bundled payments create incentives to withhold services. Having this incentive placed primarily on the physician would severely weaken the patient-physician relationship. I suppose some patients are already suspicious of doctors for rushing them out of the hospital, or withholding imaging/tests, because they think we are 'in' with the insurance company, but leaving the doctor last in line for a percentage of the profits would make this a very legitimate concern.

Luckily, in my area, the hospital is not showing any signs of pushing for this. I think many hospitals see the consequences of starting a doctor vs hospital fight, which isn't good for anyone.

 

[1217MD]

Two comments.

1. bundled payments may occur but they appear to be most likely applied in the hospital setting only. As stated above, theoretically we may come out on the short end after the hospital "get theirs". With that being said, if hospitals frequently stiff physicians in these scenarios- most doctors will drop call coverage for the hospital all together. Believe it or not, hospitals cannot afford to pay us 10$ to drain a neck abscess, take on the liability inherent to the procedure and continue to do it for such little money. There is a tipping point where it will be counterproductive for them.

2. I am a BIG believer in decentralizing healthcare. Fortunately for us as a specialty, we have the ability to do many things in clinic as stated above. This allows us to provide the same care at a lower costs with potential for actually higher reimbursement rates. Also I very rarely need a major hospital. Theoretically I could do 90% of my cases in ASCs and in the office. As soon as the hospitals start paying me nothing for bringing cases to them...I will gladly give up my full privileges and move to courtesy only. I will no longer take call there or bring cases. Frankly this type of change will likely make my practice better

 

[Winged Scapula]

I feel like this is a common point of confusion in medical school. You are not restricted from operating medical businesses that share patients. This is not uncommon actually. You can be partners in multiple medical practices, surgery centers or ancillary service facilities and get paid to provide services at all of them, and refer patients preferentially to your own entities. You just are not allowed to pay or be paid kickbacks for getting reffered or referring patients, respectively. Examples include cash payments, gifts, or excessive (above market value) payments for services, rent or other business transactions between the practices. Apparently, before Stark laws, docs used to send elaborate gift baskets to each other around Christmas, etc, and that is no longer allowed.

Edit: Of course, things are much more complicated. I am not a Stark law expert, but many doctors have medical businesses they are involved in. You usually just have to check the Stark regulations as you go, so you are not doing things the wrong way. I think one "no-no" is that doctors can not own hospitals...

Interesting. Every year I still receive elaborate gift baskets, spa or designer shoe gift certificates etc. from med and rad Oncs, hospitals. I rarely reciprocate (because my partners are cheap LOL) but now I can say it's because of Stark laws.

 

[DrBodacious]

Interesting. Every year I still receive elaborate gift baskets, spa or designer shoe gift certificates etc. from med and rad Oncs, hospitals. I rarely reciprocate (because my partners are cheap LOL) but now I can say it's because of Stark laws.

Again, I am not a stark law expert, but a quick Google search has an attorney website explanation http://www.hawleytroxell.com/2011/11/gifts-to-patients-and-potential-referral-sources/.

There is potential danger in accepting gifts, even if you don't send them. Assuming you ever refer patients to these doctors, someone could accuse you of doing so because of the gifts (selling referrals). Not that you are...

I have never heard of any specific cases being enforced, I do not know who enforces these things, etc.

 

[Gary Seeba]

Thanks for another good posting resxn. I like your real world applications and business knowledge.

 

[NYBills987]

Thanks, these responses are very helpful.

The comment "if ENTs did more moderate sedation (like dentists or oral surgeons), we could do even more" got me thinking-- are there procedures that ENT is losing to other fields? For example, I know that thyroid removal at my institution is much more commonly done by Endocrine surgeons at this point. Is there danger of this happening to other procedures or is this irrelevant?

 

[resxn]

Thanks, these responses are very helpful.

The comment "if ENTs did more moderate sedation (like dentists or oral surgeons), we could do even more" got me thinking-- are there procedures that ENT is losing to other fields? For example, I know that thyroid removal at my institution is much more commonly done by Endocrine surgeons at this point. Is there danger of this happening to other procedures or is this irrelevant?

For someone watching the marketplace, there are many advantages to moving cases to the clinic. Universally, the RVU's are greater. Universally, oversight is not as stringent. Both are double-edges swords. When IOBSP was approved with CPT codes, every ENT in the country suddenly was an expert in sinus surgery. In my town, even facial plastic surgeons who hadn't done ENT since residency all of a sudden where rhinologists. It was and remains ridiculous. The CPT's are under very close scrutiny due to the abuse of them. I won't go into more detail on that at this point--it's a whole other discussion. Not having oversight is also a potential problem--as surgeons take more risk moving things to a clinic, they potentially risk quality care to the patient. Thus, we now have people performing anterior ethmoidectomies in the clinic when they get their IOBSP. I'm sure it's safe when all goes well, but what about the aberrant anterior ethmoid artery or if the pt moves with a medial lamina papyrcea or even lateral lamella?

Sedation carries significant risk as well. I'm sure we are all familiar with dentists who've had catastrophes in their office performing their own anesthesia. You hear about it all too often with plastics.

In my neck of the woods (pun intended) ENT's own thyroid and parathyroid surgery. General surgeons are all in a huff, but our group has demonstrated smaller incisions, faster procedures, and fewer complications on a consistent basis and have won the cases from the Endocrinologists and PCP's. Endocrine surgery is a huge part of my practice. If someone claims to be an endocrine surgeon, tell them to go operate in the belly and leave the neck to those board certified in Head & Neck surgery. Prove your the best.

What other procedures would you be worried about other specialties taking? Parotids? DCR's? SMG excisions? I don't really see it happening. The biggest risk to losing case volume is if our stupid academicians win the war to make ENT into spearate specialties with a 3 yr medical otolaryngologist who can do tubes and tonsils and everything else is referred to an ENT specialst who did 2 more years of specialty training to do a tympanoplasty or a FESS or a thyroid.

 

[Gary Seeba]

Kind of similar to how Maxillofacial is divided up into those who do extractions and implants and those who are expanded scope.

 

[Gary Seeba]

How are ents handling participation with Medicaid. If one member of a group practice takes it does the whole group have to be providers?

 

[resxn]

How are ents handling participation with Medicaid. If one member of a group practice takes it does the whole group have to be providers?

Short answer is not all have to accept medicaid if one does, but the longer answer depends on how the group works. CMS functions under the tax id of the provider(s). If the group practices under one tax id, and one doc takes medicaid, then it doesn't require all docs to see medicaid, but all can if they prefer. If you practice under separate tax id's, then, obviously, you can do whatever you want under your own, but that won't let others do it unless they too get credentialed with medicaid.