September 1999
Volume 63 |
Number 9
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PRACTICE MANAGEMENT
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| Greater Hope for
Physician Unions? |
Karin
Bierstein
Practice Management Coordinator
On June 20, the American Medical Association's (AMA) House of
Delegates voted to form a physician union. The new entity is rapidly
taking shape and will soon be filing a notice of intent to form
a bargaining unit with the National Labor Relations Board. Initial
plans call for AMA to assist in the formation of many local bargaining
entities over the next few years.
Because federal antitrust law has not changed and independently
practicing physicians are still not able to bargain collectively
over fees, the AMA union will only be open to the 17 percent of
practicing physicians who are W-2 employees. (See July
1999 and May
1998 "Practice Management" columns in the NEWSLETTER
for explanations of this statement.) Where allowed, the union
will also offer membership to residents. The other eligible physicians
among the 108,000 potential members work for hospitals, health
plans and universities. Forty thousand physicians already belong
to unions, up from 25,000 two years ago. Clearly, the interest
in the potential benefits of union membership is growing rapidly
and the resistance of the AMA leadership, long opposed to unionization,
was no match for rank-and-file hunger for greater negotiating
power vis-a-vis third-party payers.
AMA has stressed that the new union will seek to bargain
over many issues other than reimbursement. Health plan limitations
on patient referrals to specialists, limits on hospital lengths
of stay, drug formularies and determinations of medical necessity
are also priority concerns. To distinguish the physician union
from more conventional labor organizations, guiding principles
establish that it will never affiliate with the latter nor engage
in strikes. Its name has not been settled yet but is likely to
avoid the words "labor," "union" and "bargaining unit."
Public reaction has been mixed. The insurance industry
obviously does not support the development of physician unions.
Patrick G. Hays, CEO of the Blue Cross and Blue Shield Association,
said in a paid advertisement: "Allowing doctors to form unions
will have immediate and dire consequences for American consumers.
If physicians are permitted to set prices for their services,
the inevitable result will be higher premiums."
Some physicians continue to believe that unionization
is incompatible with professionalism. A June 25 New York Times
editorial concluded, however, that "if doctors use collective
bargaining to improve patient care standards, unionization may
turn out to be a strong force against health plans that unfairly
use their market power to limit quality of care."
For independent physicians, state or federal legislation will
still be necessary. Representative Tom Campbell's (R-CA) bill that
would allow physicians to negotiate collectively, exempting them
from antitrust prosecution, now has some 135 co-sponsors. Passage
of the Quality Health Care Coalition Act of 1999 (H.R. 1304) is
a prime objective of AMA's and also something that the two
powerful congressional committee chairmen having jurisdiction over
the bill, Sen. Orrin Hatch (R-UT) and Rep. Henry Hyde (R-IL), adamantly
oppose. (See the "Washington Report" in the July NEWSLETTER
for further details of the Campbell bill.)
Of equal interest is the Texas legislation signed into
law by Governor George W. Bush on June 23. The new law will allow
physicians in independent practices to negotiate collectively
through third-party administrators on contract and reimbursement
matters without fear of the antitrust enforcement authorities.
There is no contradiction with federal law: the statute provides
that the state attorney general will supervise the bargaining
process, up to and including approving or disapproving any agreements
reached with payers. The process thus takes on the mantle of state
action and is immune to federal antitrust prosecution. The statute
also limits the size of a bargaining group to no more than 10
percent of the licensed physicians in a given area. Strikes and
boycotts remain illegal.
The managed care industry and business interests lobbied
as heavily against the legislation as physicians lobbied in its
favor, with strong AMA support. Test litigation is probably inevitable.
If the law survives, it will be interesting to see whether fears
of a Pandora's box being opened by allowing the attorney general
to sit at the bargaining table prove justified.
Meanwhile, it appears that similar legislation may be
introduced in several other states, including Illinois, Pennsylvania
and Rhode Island.
Medicare Will Not Buy More "Black Box Edits"
Under considerable congressional pressure, the Health Care Financing
Administration (HCFA) last year began purchasing commercial software
that "bundles" pairs of medical or surgical procedures
and denies payment for one of the two procedure codes. The fact
that the "edits," or bundled pairs, were considered trade secrets
that could not be disclosed to physicians (hence earning the label
"black box") was, if anything, more offensive than the edits themselves.
HCFA Administrator Nancy-Ann Min DeParle testified that she personally
did not consider the secrecy fair and that she would resist their
use in the Medicare program. (See September
1998 and January 1999
ASA NEWSLETTER "Practice Management" columns.)
Taking the next step, Ms. DeParle announced in late June
that the agency will "seek out contracts" not containing confidentiality
restrictions in future purchases of bundling systems. The current
contract with McKesson HBOC runs until October 2000, when HCFA
will seek new proposals.
The AMA's Correct Coding Policy Committee (CCPC) meets
regularly to review proposed Medicare code edits. The majority
of those edits have been developed as part of Medicare "Correct
Coding Initiative" (CCI) and have never been considered confidential.
The CCPC, on which some 15 medical specialties are represented,
including anesthesiology in the person of Committee on Economics
member Karl E. Becker, Jr., M.D., has been hamstrung by the confidentiality
provisions in its efforts to share information with the practicing
physician community. HCFA's new policy on purchasing code edits
will undoubtedly receive a highly favorable reaction from the
CCPC.
The potential savings from bundling procedures into a
single payment continues to attract payers, of course. HCFA estimates
that the CCI, which has been in effect since January 1996, has
saved the Medicare program $700 million. Clearly, mere disclosure
will not be enough to block the implementation of every undesirable
edit. Another 886 black box edits developed under the current
contract with McKesson HBOC were scheduled to go into effect on
July 1. The ASA Washington Office would like to repeat its request
that ASA members help identify edits that we may be able to challenge
by providing us with all the necessary information on the procedures
and payers involved.
Wait Begins for Final Rules on Facility Payments for Pain
Management Services
After multiple postponements, HCFA finally set a firm deadline
for the submission of formal comments on its two proposed rules
that would change payment policies and rates for services performed
in ambulatory surgical centers (ASCs) and hospital outpatient
departments (HOPDs), respectively. Members of the committees on
Pain Management and Economics wrapped up a year's efforts and
provided final input that allowed ASA to file very detailed and
well supported comments on July 30.
The proposals would not affect professional fees. Since
they would either reduce or eliminate payments to ASCs and HOPDs
for many of the epidurals and nerve blocks, however, anesthesiologists
might no longer have access to the facilities in which they provide
those services. The proposed payment changes are as follows:
|
CPT CODES
|
ASC
|
HOPD
|
| 62273-62298 |
From $314 to $241 |
From "reasonable cost" to $164.03 |
| 64410-64680 |
From $314 to $0 |
From "reasonable cost" to $154.26 |
The most troubling change is obviously the proposed elimination
of any ASC facility payment at all for nerve blocks. The theory
behind the change is that these procedures can be performed safely
in physicians' private offices, but ASA argued that the underlying
data are flawed for several reasons. ASA readers are well aware
that the majority of the nerve blocks as well as the neurolytic
injections require fluoroscopy units and/or other sophisticated
imaging equipment that will never be affordable in the private
office.
Questionable data are also behind the low proposed payment
rate for HOPD procedures. HCFA grouped procedures that it deemed
clinically homogeneous in more than 300 classes and then used
the median cost of procedures in each classification as the prospective
allowable for all related procedures. Elimination of nearly half
of the 96 million HOPD claims in the payment database and other
statistical techniques resulted in 20-fold variations between
minimum and maximum historical payments and, we submitted, unrepresentative
medians.
Numerous anesthesiologists, other physicians and representatives
of the ASC industry also have filed comments protesting the changes
(which affect many nonanesthesia procedures in the CPT book as
well). HCFA has announced that it will not finalize the rules
or implement changes in payment policies until after all Y2K issues
are satisfactorily resolved some time after the first quarter
of next year. There is reason to believe that the final policies
will vary from the proposals.
Thank you to the committee members, consultants and individual
anesthesiologists who provided ASA staff with the clinical and
financial information that went into our comments. Both letters
are posted on the ASA
Web site.
60 Days to Respond to Settlement Offer Resulting From Medicare
Audit
HCFA has issued a "Program Memorandum" to all Medicare carriers
advising them that they must now give physicians 60 days, rather
than 30, to respond to a notice that Medicare believes that there
has been an overpayment.
Effective July 1, medical practices will have a more reasonable
time period within which to evaluate the options described in
the notice from their carrier. These options involve acceptance
of the proposed amount to be refunded or assent to a more extensive
audit based on a "statistically valid random sample" of the practice's
claims.
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