Category Archives: Litigation

ACA: Helping or Hurting Solo Practice?

It won’t surprise many to learn that the age of the solo practitioner has, for the most part, come to an end. Over the past several years, small and solo practices have closed, been sold to hospitals, or merged with larger groups. The reasons are fairly obvious. Declining payments, rising malpractice costs, increasing regulatory burdens, costly new health information technology requirements, and crushing medical school debt have made it difficult for physicians to operate the small practices that once were commonplace around the country.

Now add the Affordable Care Act (ACA) to the mix. At a July 19 hearing of the House Small Business Subcommittee on Investigations, Oversight and Regulations, lawmakers questioned whether the health reform law would help or hurt physicians looking to keep their practices small and independent. The answers from the expert panel were mixed.

Gone are the days of Marcus Welby. Courtesy Wikimedia Commons/Public Domain License

The emergence of accountable care organizations (ACOs) will drive more hospitals to buy up small physician practices, Mark Smith, president of the physician recruiting firm Merritt Hawkins, predicted. The health reform law heavily promotes the formation of ACOs, which call for physicians and hospitals to work more closely and to share in bundled payments for episodes of care. Mr. Smith said small practices aren’t well-positioned to enter the ACO world if they aren’t integrated with a hospital because the ACO model calls on practices to assume financial risk.

But Joseph M. Yasso, Jr., DO, a family physician in Independence, Mo., who sold his practice to a hospital group 20 years ago, said the ACA’s promotion of patient-centered medical homes could be a lifeline for small practices. Physicians are adapting to the new environment by becoming medical homes and participating in government pilots where they can share in the savings they generate by providing more efficient care, he said.

One thing everyone on the panel did agree on was the need to fix the Sustainable Growth Rate (SGR) formula used in setting physician payments under Medicare. No surprises there either.

— Mary Ellen Schneider

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Filed under Health IT, Health Policy, health reform, IMNG, Litigation, Physician Reimbursement, Practice Trends, Primary care

Criticism of the AMA’s RUC Grows

Tom Scully, the outspoken former head of Medicare, recently said that one of the biggest mistakes policymakers made when redesigning the physician payment system in the early 1990s was giving the American Medical Association control over the Relative Value Scale Update Committee or the RUC.

The RUC, which is as controversial as it is unknown, is a 29-member panel that makes recommendations on how to value of thousands of physician services under Medicare. While Medicare officials are under no obligation to accept the panel’s decisions, most of the time that’s exactly what they do.

Courtesy Wikimedia Commons/ Public Domain.

Mr. Scully told members of the Senate Finance Committee that the current RUC structure, as run by the AMA, isn’t objective enough. There’s a lot on the line since the RUC’s decisions impact about $80 billion in Medicare spending each year, he said. As lawmakers consider how to reform the physician payment system, he urged them to also think about ways to make the RUC less political and more independent.

The comments in the Senate hearing room were just a sampling of the criticism that the AMA and the RUC have received recently. Over the past year or so, the RUC has been under near constant attack from a small group of primary care physicians who are suing the Centers for Medicare and Medicaid Services with the goal of getting the agency to dump the RUC. Their contention is that the RUC is biased toward subspecialists and that the panel’s recommendations have contributed to a significant gap between primary care and specialty pay.

The AMA has continued to support the RUC process, arguing that a group of physicians is best positioned to determine the value of medical services and that the panel has often championed payment increases for primary care services.

— Mary Ellen Schneider

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Filed under Health Policy, IMNG, Litigation, Physician Reimbursement, Practice Trends, Primary care

BP to Pay Spill-Related Health Claims

Gulf Coast residents who may have been made sick — or who may become sick in the future — as a result of the April 2010 Deepwater Horizon oil spill may now be able to make a claim against BP. The oil giant announced on March 2 that it had reached an agreement in principle for a settlement with the attorneys representing the thousands of plaintiffs in the massive case.

Overall, the company says it will make almost $8 billion available — about $5 billion will go toward health claims.

Photo by Alicia Ault/IMNG Medical Media

In a sense, it is opportunity No. 2 for the fisherman, shrimpers, restaurant and hotel owners, and hundreds of thousands of others who make their living or just live in the areas affected by the spill. BP had already set aside $20 billion — in June 2010 — to pay mostly economic damage and other direct economic claims.

At that time, there was an outcry about the lack of any dedicated funds to cover mental health issues or physical illnesses that might arise out of the oil spill. I blogged about that here, in an earlier post.

In the almost 2 years since the disaster, BP says it has paid “approximately $6.1 billion to resolve more than 220,000 claims from individuals and businesses” through the trust fund, known as the Gulf Coast Claims Facility. It has been administered by Kenneth Feinberg, not coincidentally, the man who also oversaw the claims process for the Sept. 11 Victim Compensation Fund.

According to lengthy article in the New Orleans Times-Picayune on the proposed settlement, Mr. Heisenberg is now stepping down and another special master will take over administration of the Trust Fund.

The proposed settlement — which will come out of the $20 billion Trust Fund — has one agreement to address economic loss claims and another for medical claims. For those who have a qualifying medical claim, there is essentially a 21-year statute of limitations. It’s likely taking into account that some conditions — such as cancer — may take that long to show up in clean-up workers or others exposed to either the oil or the chemicals used to mitigate the disaster.

BP is also making $105 million available “to improve the availability, scope, and quality of health care in Gulf communities.” The money will cover an expansion of primary care, mental health services, and access to environmental health specialists, according to the company.

If the agreement in principle goes into effect, the plaintiffs who eventually get paid will release BP from future liability claims.

Alicia Ault

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Filed under Epidemiology, Family Medicine, Health Policy, IMNG, Internal Medicine, Litigation, Psychiatry