Story: Trinity Health sues anesthesiology group

[okayplayer]

Trinity Health sues anesthesiology group amid insurer rate disputes

Alleged rate disputes between Anesthesia Associates of Ann Arbor and several insurers could cause Trinity to lose patients, incur significant administrative expenses and inflate patients' out-of-pocket costs, according to a new lawsuit.

t.co

Interesting times. Feels good to be a partner in a physician owned group that will never entertain the prospect of selling.

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[dchz]

In a case of the mass exodus for the group. Is there often a negotiation to throw out the previous non-competes?

 

[dannyboy1]

So pretty much the hospital wants to force the anesthesiologists to work for less money. Thought slavery was illegal...
Normally if you need someone to work for you, you pay for it....

 

[Man o War]

It’s a shame this group’s partners sold the group, this was a solid PP group before they made that move.

 

[Mman]

So pretty much the hospital wants to force the anesthesiologists to work for less money. Thought slavery was illegal...
Normally if you need someone to work for you, you pay for it....

if their hospital contract says they must be in network with every payer (or at least the overwhelming main one) and they went out of network, isn't that fairly simple breach of contract with the hospital?

 

[IMGASMD]

Trinity Health sues anesthesiology group amid insurer rate disputes

Alleged rate disputes between Anesthesia Associates of Ann Arbor and several insurers could cause Trinity to lose patients, incur significant administrative expenses and inflate patients' out-of-pocket costs, according to a new lawsuit.

t.co

Interesting times. Feels good to be a partner in a physician owned group that will never entertain the prospect of selling.

Did they sell? It seems like they’re still on their own?

 

[okayplayer]

Did they sell? It seems like they’re still on their own?

They sold. Presumably the AMC they sold to is trying to recoup their upfront cost by driving up their negotiated rate with the insurers.

 

[Mman]

They sold. Presumably the AMC they sold to is trying to recoup their upfront cost by driving up their negotiated rate with the insurers.

they sold to private equity, not an AMC. If I had to venture a guess, it may have been that firm's first foray into the world of anesthesia which (from a business sense) is very different than other non hospital based specialties. They must not have realized the catastrophe that going out of network with BC/BS would be if their hospital contract said they couldn't.

 

[dannyboy1]

if their hospital contract says they must be in network with every payer (or at least the overwhelming main one) and they went out of network, isn't that fairly simple breach of contract with the hospital?

If the rate is so low that it doesn’t make sense to work there than either the hospital has to kick in a stipend or they won’t have coverage. Nobody has to work for free....

 

[B-Bone]

All this sounds real familiar <cough...Charlotte..cough..Minneapolis>.

 

[IMGASMD]

they sold to private equity, not an AMC. If I had to venture a guess, it may have been that firm's first foray into the world of anesthesia which (from a business sense) is very different than other non hospital based specialties. They must not have realized the catastrophe that going out of network with BC/BS would be if their hospital contract said they couldn't.

They sold. Presumably the AMC they sold to is trying to recoup their upfront cost by driving up their negotiated rate with the insurers.

Thanks. I was looking for Mednax or envision or some other entity that I recognize. Didn’t think about private equity as mentioned above.

 

[Mman]

If the rate is so low that it doesn’t make sense to work there than either the hospital has to kick in a stipend or they won’t have coverage. Nobody has to work for free....

like I said, if your hospital contract states you have to remain in network, then you don't have an option. They should've thought of that before taking the contract from the hospital.

I mean I don't know the wording of their contracts, but it's pretty cut and dry if as described whether anybody likes it or not.

 

[rakotomazoto]

Seems like yet another attempt to portray physicians as greedy, self-centered, egotistical, and difficult to work with.

Lovely.

 

[B-Bone]

like I said, if your hospital contract states you have to remain in network, then you don't have an option. They should've thought of that before taking the contract from the hospital.

I mean I don't know the wording of their contracts, but it's pretty cut and dry if as described whether anybody likes it or not.

Very interesting point about this. In Minneapolis, the health system had a contract with XYZ group. That group sold out to Large AMC (reportedly without informing the health system). Group XYZ dissolved, and then the hospital had no contract with their anesthesia providers. The group that they had contracted with ceased to exist, and they hadn't hammered out a contract with AMC yet. In order to keep the ORs moving, they had to work without a contract for some period of time and AMC had them over a barrel because they had no way of immediately replacing an OR-load of docs and CRNAs that were now employed by AMC. Hospital didn't like being put in this situation. Because of this (among other things), they dumped AMC at the first available opportunity. Not sure what (if any) legal wranglings are going on between the hospital system and AMC currently.

 

[AdmiralChz]

From the article:

Anesthesiologists are a focal point of the ongoing surprise billing debate as they are often out of a commercial insurer's network. Anesthesiology accounted for the largest share of out-of-network professional claims associated with an in-network admission at 16.5%, according to a recent Health Care Cost Institute analysis that found that about 1 in 7 patients received a surprise bill despite obtaining care at an in-network hospital.

16.5% of bills being out of network is completely inappropriate and a VERY high number - is this driven by AMCs? I didn't know this was such a big problem in our specialty - totally ridiculous. I know this was a major concern in Charlotte and Mednax execs refused to address it. You want to be insured fairly that is definitely true, but you don't want to play games here as your job could be at risk.

I don't think this situation is necessarily a victory AT ALL for private physician-owned practices. If anything it's a shot across the bow.

 

[Man o War]

From the article:



16.5% of bills being out of network is completely inappropriate and a VERY high number - is this driven by AMCs? I didn't know this was such a big problem in our specialty - totally ridiculous. I know this was a major concern in Charlotte and Mednax execs refused to address it. You want to be insured fairly that is definitely true, but you don't want to play games here as your job could be at risk.

I don't think this situation is necessarily a victory AT ALL for private physician-owned practices. If anything it's a shot across the bow.

It’s a regular practice with AMCs. I’d l guess they make up the lions share of the 16.5%

 

[IMGASMD]

ELI5
Why “we” not support surprise billing practices, at the same time despise AMC charging out-of-network practice?

I thought OON billing was one way old anesthesia pp made boat load?

 

[Urzuz]

Trinity Health sues anesthesiology group amid insurer rate disputes

Alleged rate disputes between Anesthesia Associates of Ann Arbor and several insurers could cause Trinity to lose patients, incur significant administrative expenses and inflate patients' out-of-pocket costs, according to a new lawsuit.

t.co

Interesting times. Feels good to be a partner in a physician owned group that will never entertain the prospect of selling.

Never say never. Everyone has a price...

 

[dannyboy1]

Trinity Health sues anesthesiology group amid insurer rate disputes

Alleged rate disputes between Anesthesia Associates of Ann Arbor and several insurers could cause Trinity to lose patients, incur significant administrative expenses and inflate patients' out-of-pocket costs, according to a new lawsuit.

t.co

Interesting times. Feels good to be a partner in a physician owned group that will never entertain the prospect of selling.

Why? Hospital is essentially saying “we don’t care how little you get paid we want you to be in network”. Are they offering a stipend? Or are they playing the usual game of anesthesia chicken to see who blinks first. Let them employ the anesthesiologists so then they will have no one to blame but themselves when there are holes in coverage or the reimbursement is not high enough to cover the salaries. I’m not saying OON billing is the right thing to do but hospitals should be supportive of anesthesiologists getting decently reimbursed. If reimbursement goes low enough that PP or an AMC model is not viable, guess what, patients will still need anesthesia and there will be no choice but to employ some ....

 

[Guillemot]

One of the things I fear about being a member of a physician group is the buy in associated with it. Not uncommon for *****s & dinguses to become part of senior leadership. Buy in = gotta put up with it or lose $. Employed = walk away.

 

[Mman]

From the article:



16.5% of bills being out of network is completely inappropriate and a VERY high number - is this driven by AMCs? I didn't know this was such a big problem in our specialty - totally ridiculous.

Doesn't surprise me. We are a hospital based specialty, but patients coming for surgery usually know nothing about us. They 100% sure will make sure their surgeon is in network, I mean they probably researched that before they even met the surgeon in their office. They probably almost always make sure the hospital is in network. Then they show up for surgery and hopefully the anesthesia is in network.

 

[Mman]

Why? Hospital is essentially saying “we don’t care how little you get paid we want you to be in network”. Are they offering a stipend? Or are they playing the usual game of anesthesia chicken to see who blinks first. Let them employ the anesthesiologists so then they will have no one to blame but themselves when there are holes in coverage or the reimbursement is not high enough to cover the salaries. I’m not saying OON billing is the right thing to do but hospitals should be supportive of anesthesiologists getting decently reimbursed. If reimbursement goes low enough that PP or an AMC model is not viable, guess what, patients will still need anesthesia and there will be no choice but to employ some ....

The hospital is saying if you are out of network and are driving cases away from us, that costs us tens of millions of dollars and is violating our contract. They are also saying they are totally willing to get rid of the group and employ them themselves in which case they will never be out of network and the particulars of the anesthesia reimbursement will be irrelevant in the grand scheme of their total contracts.

We are a service based specialty and the hospital is one of our customers. You don't keep them happy, you are out of a job.

 

[dannyboy1]

The hospital is saying if you are out of network and are driving cases away from us, that costs us tens of millions of dollars and is violating our contract. They are also saying they are totally willing to get rid of the group and employ them themselves in which case they will never be out of network and the particulars of the anesthesia reimbursement will be irrelevant in the grand scheme of their total contracts.

We are a service based specialty and the hospital is one of our customers. You don't keep them happy, you are out of a job.

So let them employ the docs. Nothing wrong with a fair salary for a days work. They might change their tune when they have to employ 100 docs and give benefits and the anesthesia reimbursements just aren’t covering it.
Also, they rail against the non-compete now but wanna bet that the employment contract for their employed physicians will also include one....

 

[nimbus]

So let them employ the docs. Nothing wrong with a fair salary for a days work. They might change their tune when they have to employ 100 docs and give benefits and the anesthesia reimbursements just aren’t covering it.
Also, they rail against the non-compete now but wanna bet that the employment contract for their employed physicians will also include one....

Yep. The hospital can assume the risk of poor anesthesia reimbursements.

 

[Mman]

So let them employ the docs. Nothing wrong with a fair salary for a days work. They might change their tune when they have to employ 100 docs and give benefits and the anesthesia reimbursements just aren’t covering it.
Also, they rail against the non-compete now but wanna bet that the employment contract for their employed physicians will also include one....

that is what the hospital wants. It's cheaper and easier for them to employ the docs than to have their largest group of insured surgical patients out of network and avoiding them like the plague.

 

[dannyboy1]

that is what the hospital wants. It's cheaper and easier for them to employ the docs than to have their largest group of insured surgical patients out of network and avoiding them like the plague.

Then let them do it. Would it be too much to ask them to avoid blatant hypocrisy and not place a non compete in their employment contract. That way when they start treating their employed docs like crap (as all employers of anesthesiologists inevitably will) the docs can leave. I won’t hold my breath....

 

[Mman]

Then let them do it. Would it be too much to ask them to avoid blatant hypocrisy and not place a non compete in their employment contract. That way when they start treating their employed docs like crap (as all employers of anesthesiologists inevitably will) the docs can leave. I won’t hold my breath....

The slight difference is that the docs having a noncompete with an AMC (or PE) would prevent them from working in the hospital for any other employer. A noncompete for the hospital could not prevent them from working in that hospital. While the word is the same, there is a significant difference between a noncompete for a hospital itself and a noncompete with a 3rd party. At least if you are the hospital there is a significant difference.

I've never actually seen a noncompete for a hospital employed doc that was terribly restrictive. I've seen plenty for private groups or AMCs that were very restrictive.

 

[nimbus]

When hospitals employ the anesthesiologists they can cost shift. If they have a money losing contract that reimburses them less than the cost of their anesthesia staff, they can get their costs back by collecting facility fees, lab, imaging, etc. They may agree to a bad anesthesia contract in order to keep the patients flowing.

Because anesthesia groups are not diversified, they live and die by anesthesia fees and stipends alone.

 

[dannyboy1]

When hospitals employ the anesthesiologists they can cost shift. If they have a money losing contract that reimburses them less than the cost of their anesthesia staff, they can get their costs back by collecting facility fees, lab, imaging, etc. They may agree to a bad anesthesia contract in order to keep the patients flowing.

Because anesthesia groups are not diversified, they live and die by anesthesia fees and stipends alone.

Then they should just offer the group a stipend and be done with it. Probably cheaper and less of a headache..

 

[nimbus]

Then they should just offer the group a stipend and be done with it. Probably cheaper and less of a headache..

Possibly less headache unless the group already gets a healthy stipend and chooses to be out of network. If the hospital employs the anesthesiologists, they have more control.

 

[AdmiralChz]

One of the things I fear about being a member of a physician group is the buy in associated with it. Not uncommon for *****s & dinguses to become part of senior leadership. Buy in = gotta put up with it or lose $. Employed = walk away.

The flip side is your profits go to the hospital system instead of your group. There is no magic bullet perfect answer here, as with anything really.

 

[Mman]

Then they should just offer the group a stipend and be done with it. Probably cheaper and less of a headache..

they apparently decided it was cheaper and easier to not do that...

 

[PieOHmy]

We are a service based specialty and the hospital is one of our customers. You don't keep them happy, you are out of a job.

The hospital is not MY customer. The hospital is a nuissance keeping me from my patients.
You got it wrong!

 

[B-Bone]

The other thing that people frequently overlook in this discussion is motivation. If you are paid a salary to show up 7-5 every day and do whatever cases the hospital brings you, you have no incentive to bust your butt to get cases done, be efficient, work on cost-saving measures, make systemic improvements, work with other departments, etc. If you are in PP, there are profits to be made and every time you crank to get through cases that such faster you get to go home earlier. The quest for efficiency aligns your goals with the surgeons (most of the time) and the hospital (again, most of the time). It is very common for PP groups that become employed (either by the hospital or an AMC) to see efficiency plummet. If peoples' salary/free time doesn't depend on it, people won't do it. Outside of intrinsic work ethic or pride in a job well done, there's no incentive for efficiency or even high-quality work. And intrinsic work ethic/pride in a job well done don't pay the bills. I'm very happy and professionally satisfied to be in a private practice where we've done a lot to make the whole system more efficient, and work hard throughout the day to get cases done expediently and well. It doesn't hurt that doing all that stuff pads my bottom line.

 

[VA Hopeful Dr]

The other thing that people frequently overlook in this discussion is motivation. If you are paid a salary to show up 7-5 every day and do whatever cases the hospital brings you, you have no incentive to bust your butt to get cases done, be efficient, work on cost-saving measures, make systemic improvements, work with other departments, etc. If you are in PP, there are profits to be made and every time you crank to get through cases that such faster you get to go home earlier. The quest for efficiency aligns your goals with the surgeons (most of the time) and the hospital (again, most of the time). It is very common for PP groups that become employed (either by the hospital or an AMC) to see efficiency plummet. If peoples' salary/free time doesn't depend on it, people won't do it. Outside of intrinsic work ethic or pride in a job well done, there's no incentive for efficiency or even high-quality work. And intrinsic work ethic/pride in a job well done don't pay the bills. I'm very happy and professionally satisfied to be in a private practice where we've done a lot to make the whole system more efficient, and work hard throughout the day to get cases done expediently and well. It doesn't hurt that doing all that stuff pads my bottom line.

Do hospitals not pay their employed anesthesiologists on some sort of productivity set up?

Honest question as I'm FM and know basically nothing about how y'all bill. But I've worked for several hospitals and they all paid everyone on productivity for the exact reasons you mentioned.

 

[GravelRider]

I've never actually seen a noncompete for a hospital employed doc that was terribly restrictive. I've seen plenty for private groups or AMCs that were very restrictive.

I’ve seen hospital employee noncompetes that would make AMCs blush.

 

[dannyboy1]

Possibly less headache unless the group already gets a healthy stipend and chooses to be out of network. If the hospital employs the anesthesiologists, they have more control.

The other thing that people frequently overlook in this discussion is motivation. If you are paid a salary to show up 7-5 every day and do whatever cases the hospital brings you, you have no incentive to bust your butt to get cases done, be efficient, work on cost-saving measures, make systemic improvements, work with other departments, etc. If you are in PP, there are profits to be made and every time you crank to get through cases that such faster you get to go home earlier. The quest for efficiency aligns your goals with the surgeons (most of the time) and the hospital (again, most of the time). It is very common for PP groups that become employed (either by the hospital or an AMC) to see efficiency plummet. If peoples' salary/free time doesn't depend on it, people won't do it. Outside of intrinsic work ethic or pride in a job well done, there's no incentive for efficiency or even high-quality work. And intrinsic work ethic/pride in a job well done don't pay the bills. I'm very happy and professionally satisfied to be in a private practice where we've done a lot to make the whole system more efficient, and work hard throughout the day to get cases done expediently and well. It doesn't hurt that doing all that stuff pads my bottom line.

this 1000x. I’m an employee and slow turnover and nursing delays just mean more coffee and TV for me. Not gonna make the end of my shift get here any faster .....

 

[psychbender]

I've never actually seen a noncompete for a hospital employed doc that was terribly restrictive. I've seen plenty for private groups or AMCs that were very restrictive.

My last job was as a hospital employee. My non-compete (which they threatened to enforce when I left) included all of the surrounding counties (about a dozen hospitals and surgicenters within that area). I made the mistake of not reading my contact carefully, as my final contract differed from my initial offer letter in several subtle, but terrible, ways. During negotiations with my colleagues that wanted to remain, the system offered to limit it to just 25 miles, with some really vague exclusions that they tried to assure us meant that we could still join the private groups nearby, just not another hospital employed one.

 

[IMGASMD]

25 miles?!

 

[ambiturner]

Do hospitals not pay their employed anesthesiologists on some sort of productivity set up?

Honest question as I'm FM and know basically nothing about how y'all bill. But I've worked for several hospitals and they all paid everyone on productivity for the exact reasons you mentioned.

Depends. It is very difficult to make a fair incentive structure because as an anesthesiologist your production largely depends on your room assignments (a room full of fast, quick cases like tonsils and ear tubes pays better than long complicated cases like geriatric ex laps). You are also at the mercy of the insurance status of the room if the group doesn’t average the payor mix. Thus, whoever makes the assignments controls the incentive pay of the group. If everyone takes turns doing this it can work, if a couple senior guys make it every day and protect their own the system is doomed.

The other way to do it is incentive taking call or working late but that’s a time based incentive and won’t encourage moving fast.

 

[PieOHmy]

Do hospitals not pay their employed anesthesiologists on some sort of productivity set up?

Honest question as I'm FM and know basically nothing about how y'all bill. But I've worked for several hospitals and they all paid everyone on productivity for the exact reasons you mentioned.

unfortunately we dont get paid based on productivity. Why should they pay us that way if we dont demand it?

 

[PieOHmy]

Depends. It is very difficult to make a fair incentive structure because as an anesthesiologist your production largely depends on your room assignments (a room full of fast, quick cases like tonsils and ear tubes pays better than long complicated cases like geriatric ex laps). You are also at the mercy of the insurance status of the room if the group doesn’t average the payor mix. Thus, whoever makes the assignments controls the incentive pay of the group. If everyone takes turns doing this it can work, if a couple senior guys make it every day and protect they’re own the system is doomed.

The other way to do it is incentive taking call or working late but that’s a time based incentive and won’t encourage moving fast.

Ive seen this problem for the past 10 years. You get the incompetents (of which there are many) and the people in anesthesia leadership (chiefs and academic chairman) who somehow Know every single potentially bad patient or complicated patient and they are no where near that case. Thats a skill. Breeds serious serious resentment and contempt. The chairman wont even go near any patient that there iseven potential for more than 100cc of blood loss. They are basically waste products in leadership roles.

 

[Mman]

The hospital is not MY customer. The hospital is a nuissance keeping me from my patients.
You got it wrong!

if you are a private group with a contract with a hospital, the hospital is your single most important customer. Forget that and your job goes bye bye.

 

[Mman]

I’ve seen hospital employee noncompetes that would make AMCs blush.

in what way? If you take a job at this hospital you can't work at the other hospital 25 miles down the road?

 

[VA Hopeful Dr]

Depends. It is very difficult to make a fair incentive structure because as an anesthesiologist your production largely depends on your room assignments (a room full of fast, quick cases like tonsils and ear tubes pays better than long complicated cases like geriatric ex laps). You are also at the mercy of the insurance status of the room if the group doesn’t average the payor mix. Thus, whoever makes the assignments controls the incentive pay of the group. If everyone takes turns doing this it can work, if a couple senior guys make it every day and protect their own the system is doomed.

The other way to do it is incentive taking call or working late but that’s a time based incentive and won’t encourage moving fast.

I had assumed payor mix wouldn't matter if hospital employed since that's one of the selling points usually.

It would be complicated but it seems like there could be ways to make it work. Extra pay for cases over X hours, ASA 4-5 cases, stuff like that.

Or maybe something as simple as paying per unit of time that a patient is actually on the OR table - that would seem to fix the issue of being the person doing ear tubes all day compared to the long complicated cases.

 

[GravelRider]

in what way? If you take a job at this hospital you can't work at the other hospital 25 miles down the road?

Pretty much. The worst one I saw stated you could not work for certain hospitals or AMCs they deemed to be competitors within the entire state in addition to a large radius. The contract listed the competitors, but also left the language vague enough that basically prevented you from finding another job in the state for 2 years.

Now the noncompete is completely unenforceable, but that’s not the point of them. It’s a scare tactic to prevent you from leaving and no new job wants to deal with that headache when potentially hiring you.

 

[caligas]

So do individual anesthesiologists here have liability in this lawsuit, or are they protected since the lawsuit is against the “corporation?”

 

[DM27]

Where I did my fellowship the non-compete was a similar 25 mile radius which essentially covered every academic center in that region of the state. If I had wanted to get another academic job I would have had to move close to 100 miles, if I wanted a PP job I would have had to move out of the city to avoid a 60 minute commute. The non-compete was essentially signing that if I left the job I would leave the state.

A non-compete for Anesthesia is inherently illogical and purely punitive and it seems like there has been a small level of success fighting them for those who are willing and able to.

 

[caligas]

Some PP groups use truly protective non competes. Ours prevents working only at sites we currently cover, thus preventing existing partners from poaching the contract and limiting the opportunity for a hostile AMC takeover.

 

[deleted162650]

Pretty much. The worst one I saw stated you could not work for certain hospitals or AMCs they deemed to be competitors within the entire state in addition to a large radius. The contract listed the competitors, but also left the language vague enough that basically prevented you from finding another job in the state for 2 years.

Now the noncompete is completely unenforceable, but that’s not the point of them. It’s a scare tactic to prevent you from leaving and no new job wants to deal with that headache when potentially hiring you.

How would they even know??