Posts Tagged payment reform

Should Emergency Medicine be Carved Out of Payment Reform?

Should Emergency Medicine be Carved Out of Payment Reform?

Should emergency physicians advocate that they be carved-out of payment reform?  There may be no easy answer to this question, at least not yet; and in any case, advocating to be an exception to the transition from fee-for-service to pay-for-performance and risk-sharing may be a waste of time and effort.  The tide is clearly turning, though not as quickly as payers and government regulators might wish; and it would appear that eventually, every physician and hospital will be subjected to various incentives and disincentives to provide better care for less money, or perhaps less care for less money.  Even if the Affordable Care Act is killed by the Supreme Court, along with the provision of this act that mandates “paying more to doctors who provide quality care at lower cost to Medicare, and reducing payments to physicians who run up Medicare’s costs without better results”; this snowball is already rolling.  The question for ACEP and emergency physicians is:  do we scramble to get out of the way, or hitch a ride?

One of the considerations at issue is the attribution problem.  Lots of different providers impact the care of emergency department patients, and what gets done to and for them.  Unlike most physicians’ offices, the ED is an open practice.  Physicians often send their patients to the ED to get tests and procedures and treatments that the physician could perform, or order, in a lab or outpatient radiology suite, or consultant’s office.   One-stop shopping is quick, its easy, and it gets the patient out of the doctor’s office, allowing better turn-around.  Consultants call or come to the ED and order all sorts of tests and treatments, and sometimes these orders are attributed to the treating ED physician.  When physicians are financially at risk for the cost of caring for their patients, or are simply tracked and compared with each other regarding these costs; attribution is an important issue.  Under payment reform, determining how a physician’s decisions impact the cost of care involves many complicated adjustments related to the patient’s health care issues, and the roles of other physicians involved in the patient’s care.  According to Dr. Berwick, the former administrator of CMS, this “may be the most difficult measurement challenge in the whole world of value-based purchasing”.  These adjustments are even more difficult to make in an open practice like the ED, where the most expensive care is often the result of a multi-provider team effort.

Another consideration relates to the impact of payment reform incentives and risk-sharing on medical decision-making in the context of a medical emergency.  In the middle of a heart attack, do you really want your ED physician factoring in how he or she will be judged, or compensated, by how little is spent on your care; or trying to shift critical time dependent decisions to some other provider down the road?  Here’s an example:  the ED physician can look at your ECG and make the expensive decision to call in the cath lab team in order to reduce the time it takes to get your coronary artery open, saving heart muscle and maybe your life.  Or, he can call the cardiologist to come in and make that decision, wasting critical minutes, but putting the cardiologist on the hook for the cost of this decision.  Of course, the obvious answer is to make the entire team responsible not only for costs but also outcomes, which is what bundled payments, capitation, ACOs, and integrated health care systems are designed to address.  But don’t think for a minute that paying the entire team for performance is going to entirely mitigate the impact of these cost-cutting incentives.  Ask seniors how they feel about health care payment reform under Medicare: for the elderly, and most everyone, incentives for physicians to skimp on needed care is frightening.

So far, things like bundled payments and capitation have been focused on scheduled, elective, non-emergency care, because it is easier to predict and monitor the relative contribution of the surgeon, the anesthesiologist, the primary care doc, the pathologist, and so on.  In an emergency, care is less predictable, and it’s more difficult to attribute medical decision-making to one or another provider; and frankly, cost-cutting is a bit more risky, and cost-effective care perhaps more difficult to achieve.  I suspect, however, that this will not deter the payers, because emergency care is also more expensive.  If emergency care providers expect to be able to ride the train of fee-for-service forever, carving themselves out of payment reform, they will likely be disappointed.  Either they will be tagged as an expensive commodity that payers will try to work around (using the EMTALA mandate as cover, and non-payment as one of the tactics – as in the Washington State Medicaid non-payment policy), or they will be subsumed into hospital employment or mandated participation in PHOs or ACOs or other risk-sharing ventures that undoubtedly will undervalue emergency physicians’ services and undermine their current paychecks.  Unless, that is, these emergency care providers find ways to practice cost-effective care, and participate successfully in shared-savings and other at-risk incentive programs, in a responsible, caring, and efficient manner that ensures good outcomes, saves patients and payers money, and incidentally preserves their own incomes.

This post also appears in The Fickle Finger:

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Value Based Purchasing of Emergency Care – Part 2 Recommendations for Providers

This is Part 2, outlining suggested strategies (dos and don’ts) for providers of emergency care who want to prepare for value based purchasing under health reform.  It is primarily aimed at emergency physicians and other hospital-based providers, but also applies to specialists providing on-call backup services to ER patients.

• Don”t assume that because your hospital’s business model is predicated on exploiting the fee-for-service payment system, and avoiding at all costs going ‘at risk’ for the care of managed care enrollees; you should avoid talking to your hospital CEO about future payment models predicated on value based purchasing of hospital and physician services.  They all know it’s coming, and they will appreciate that you are thinking about it as well.

Do consider doing your homework, reading up on VBP and payment reform and how it may affect hospital-based providers, and anticipating how you and your group will respond when your hospital begins to align its business model (and its medical staff) to the new reimbursement paradigm.

• Don’t expect to be carved out of bundled payments, utilization risk-pools, and other incentive programs to constrain costs, just because you provide non-elective services.  Once payers get a handle on how to bundle payments for more predictable services like knee replacements and cholecystectomys, they will then begin to target episodic unscheduled care for strokes, MIs, and even acute abdominal pain.

Do prepare for these payment reform eventualities by tackling one of the thorniest problems emergency care providers face in the ‘open practice’ of the ED – attribution.  Whatever system you use to order up tests, treatments, and services in the ED, you need to be able to identify, and track, whose decision it was to spend that money, and provide that care.

• Don’t assume that, just because your hospital is not involved in an integrated provider network, the CFO isn’t concerned about resource utilization.  Just about every hospital depends upon the provision of cost-effective care in order to profit from services to seniors on Medicare, which is paid on a DRG basis.

Do begin, if you haven’t already, to address your approach to the care of the elderly in your department, with particular emphasis on co-ordination of care, reducing re-admissions, communicating with nursing homes, facilitating review of complex medical records during the evaluation phase of care, and other strategies for reducing unnecessary utilization and improving the efficiency of care.

• Don’t wait for health plans or hospital medical directors to tell you how to spend less and give more and better care.  They don’t know your patients, your department, or your business as well as you do, and they will likely be less willing to invest in your success than you are.

Do consider developing some strategies for cost-effective care for current or future implementation, so that when you are asked to participate in shared savings programs and other incentives to provide quality care at less cost, you and your hospital can both profit from the opportunity.

Again, If any of you have additional do and don’t suggestions, please comment through the link below.    The Fickle Finger


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Value Based Purchasing of Emergency Care – Part 1 Recommendations for Payers

Value based purchasing is a strategy for health care financing that attempts to hold the provider accountable for both quality and cost, through a combination of reductions in inappropriate or ineffective care and rewards for those providers that are ‘the best performers’. 1 Unfortunately, most insurance plans, and employer purchasers of health care, are simply looking to reduce payments to providers, and they all but ignoring the issue of quality or even cost-effectiveness. When it comes to the purchase of emergency care, the payers really seem to have taken a wrong turn, predicated on a lot of misconceptions about the role of the emergency department and the value equation for emergency care services.

This blog is aimed at the primary purchasers of health care: the plans, employers, and government programs that purportedly aim to adopt value based purchasing as an adjunct to, or replacement for, fee for service medicine. For every ‘don’t do that’ I will include a ‘consider doing this’, because up until now many emergency care advocates have either advocated some sort of carve-out for emergency medicine, or focused on the defense of the emergency care value proposition (like ACEP’s ‘just 2% campaign‘). Emergency care providers have to become part of the solution to the cost-of-care conundrum if they hope to retain any credibility with insurers and legislators. In Part II, I will outline some do’s and don’ts for providers under value based purchasing. So, I suggest that the purchasers:

• Don”t expect emergency physicians to act as ‘gatekeepers for acute care’. Emergency physicians are trained and motivated to provide care, not deny care. Coercing emergency physicians to ‘defer ER care’ for so-called non-urgent patients by down-coding claims or denying coverage is a low-gain, moderately high risk strategy that is a distraction from pursuing more cost-effective strategies (see:

Do encourage and incent primary care physicians and clinics to provide more after hours and next-day appointments. It is better to pull patients who do not need to go to the ED into other venues than to insist that ED physicians push them out.

• Don’t punish emergency care providers through non-payment and under-payment with the expectation that it will teach patients not to misuse the ED.

Do consider assisting EDs in identifying patients who use the ED repeatedly for acute exacerbations of chronic conditions, and who could benefit from active case management starting in the ED (and compensate providers for this case management – this is a strategy with an excellent ROI).

• Don’t assume that if a patient is admitted from the ED to an observation unit, and then subsequently admitted as an inpatient; this necessarily represents ‘double-dipping’ by the emergency physician. Payment for observation services is a cost-effective way to keep patients out of the hospital, and identify patients who, if discharged inappropriately, might return later for more expensive service.

Do provide feedback to emergency care providers about the population-based financial consequences of their use of chest pain centers and observation units, so that these services can be used more cost-effectively.

• Don’t use coercive contracting of EMTALA-obligated providers as a means of achieving cost-savings: it is abusive, and undermines the financial viability of the emergency care safety net. Commercially insured enrollees and their insurance plans depend on the availability of qualified emergency physicians and on-call specialists to SAVE them from unnecessary disability and higher costs down the road.

Do consider implementing shared-savings, utilization risk-pools, case-limit rates, and other contractual incentives (with appropriate guidelines and benchmarks) to encourage emergency physicians to adopt cost-effective care strategies in the ED, when the hospital is appropriately aligned with such strategies in their financial models.

• Don’t try to undermine, work around, or revoke the prudent layperson standard through the use of ‘non-emergency diagnoses’ lists or high ED visit co-pays. This standard ensures that enrollees will go to the ED when they should, reducing avoidable delays in care that result in unnecessary long-term disability and even greater long term costs to insurers. A single case of a missed opportunity to treat a stroke can cost insurers far more than it costs to treat fifty patients in the ED whose symptoms turn out to be non-serious.

• Do focus on where the ‘real money’ is spent, that is, where the major health care costs, on a population basis, are incurred, and the real opportunities for cost-savings and quality improvement exist. No doubt the ED is one place where such opportunities lie, but at only 3% of the health care dollar, the ED is by no means the target of opportunity that it is made out to be.

• Don’t automatically down-code ED physician claims, especially E&M level 4 and 5 claims, simply because these providers have to care for your enrollees whether they get paid appropriately or not. It is also abusive, and undermines your credibility as an insurer or payer.

Do, if you identify outliers who appear to be overcoding claims, utilize medical records audits by trained coders and recognized standards of coding, to explore these apparent overcoders in depth, and offer to adjudicate these claims in a fair and reasonable process.

If any of you have additional do and don’t suggestions, please reply below.

1. Theory and Reality of Value-Based Purchasing – AHRQ

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Participation by Emergency Physicians in Compensation Driven Cost Containment Strategies

It strikes me that in developing payment reform related, compensation driven cost-containment strategies aimed at constraining the cost of emergency care, policy makers, emergency physicians, and health insurers should adhere to certain principles. ACEP should be at the forefront when it comes to establishing these principles, which I hope will be focused on protecting our patients first, and our specialty second.

The concept and practice of ‘managed care’ has raised some very reasonable concerns about the way some physicians’ commitments to the welfare of their patients has been compromised by the financial incentives inherent in compensation arrangements like capitation and risk-pools. If emergency physicians are going to be engaged, willingly or reluctantly, in cost-containment oriented incentive compensation programs; we need to make sure that the competing interests of patients, providers and insurers (including the government) are balanced properly, and morally.

I thought I would take a shot at formulating a few of these principles, and encourage readers of this blog to suggest changes and propose additions.

1. Cost containment strategies for emergency care should focus first and foremost on cost-effective care, with the emphasis on effective.
2. Shared-savings, pay-for-performance, capitation, risk-pools, and similar payment reform programs designed to incentivize emergency physicians to reduce the cost of providing emergency care must not result in a reduction in necessary care, an unreasonable delay in the provision of care, a significant increase in medical risk to patients, or a significant decrease in patient satisfaction with care; or shift the burden of care to those who are unwilling and/or unable to provide this care.
3. Cost-effective care strategies should be evidence-based where possible, though common sense strategies should also be considered even if evidence in favor of such strategies is not abundant.
4. The proportion of total reimbursement that emergency physicians derive from the successful adoption of cost-containment strategies, relative to the proportion derived from payment for services rendered, should be limited in order to ensure that these cost-containment incentives do not overwhelm service-driven and outcome-driven medical decision-making.
5. Strategies that rely on the deferral of care in the ED should be considered as relatively high-risk, low-reward strategies when compared to others that are focused on cost-effective care and high-cost services.
6. Cost-containment strategies for emergency care should be transparent to patients, providers, insurers, and policy-makers.

Any other ideas out there?

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Attribution and Emergency Medicine, a Payment Reform Conundrum

Several years ago, the medical director of the emergency department I was working in at the time decided to take a closer look at productivity amongst our physician and PA staff. In order to ensure that data on patients seen and visit times was being appropriately attributed to the treating physician or PA, we took a closer look at how the patient and the treating provider were linked in the hospital’s IT system (the data source), since we had a fair amount of double and triple coverage. It was a bit surprising, not to mention perplexing, to discover that at registration, the physician who arrived for the latest shift was assigned in the IT system to all the patients who arrived during this shift, until the next physician arrived, regardless of which provider actually took care of the patient. Thus, all the data related to provider productivity, and the attribution of the ordering provider for diagnostic tests, consults, medications, admissions, etc. which was derived from the IT system, was flawed. An approach initially designed to facilitate speedy order entry was never subjected to reconciliation at the end of the day, as we all assumed. Bummer.

The more we looked at the issue, the more complex it became. How should we attribute an inpatient admission when one ER physician handed off to another in mid-workup at change of shift? What about when a PA was supervised by two different physicians? Should a double bounce-back be attributed to the first treating physician, or the second, or both? You might think that provider-order-entry would solve many of the issues related to attribution of diagnostic test and treatment orders and consults and such; but if a patient is sent in to the ED by their primary care provider to have a work-up for RUQ pain, should the PCP or the ED physician be ‘credited’ with ordering the GB Ultrasound? Is the ED physician, or the hospitalist, responsible for ordering the admission? If a consultant requests a serum porcelain level before he will see the patient in the ED, is the consultant or the ED physician acting as the ordering provider?

You might think all of this is irrelevant, or as I am fond of saying, academic (meaning almost irrelevant); but in light of payment reform and Accountable Care Organizations and the push for cost-effective, error-free care: the need for accurate attribution in the ED is likely to be pretty important. If you can’t count correctly, you can’t have accountability. Since many ED physicians are employees of the hospital or academic institution where they work, accurate attribution might, in an era where cost-effectiveness and resource utilization is likely to be scrutinized at the individual provider level, mean the difference between continuing employment and getting the boot. Attribution might even be more important for contracted ED staffing groups working under contractual agreements with PHOs and hospital-owned or affiliated ACOs in risk-sharing or shared-savings arrangements that predicate payment of withholds or payouts to the ED group on performance against cost-effective care or use-reduction targets. These staffing contracts often have no-cause 90 day cancellation clauses hanging over these ED staffing groups, putting everyone’s job at risk.

I raise the issue of attribution and accountability in ED care because our practice environment is very complex – ED care is a team sport, with many providers having varied positions (sometimes the ED physician is the quarterback, sometimes the trauma surgeon, and sometimes the PA or NP), and the field of play is often unmarked and multidimensional, and the game challenging to track and score. If a quarterback throws a touchdown pass, who gets the credit: the QB, the receiver, or the offensive line? If a patient has wrong-side chest-tube placement, is the ED physician, the radiology tech who mislabeled the film, or the surgeon at the head of the gurney responsible? Who gets credit for the unnecessary dye-enhanced rescan, the risk-averse radiologist who insists he needs more contrast to make the diagnosis, the ED physician who is prepared to make the diagnosis of appendicitis clinically, or the surgeon demanding a scan before doing the consult? I am not advocating that ED care be carved out of the risk-sharing or shared-savings or pay for performance calculation simply because attribution in the ED is complicated. If we get carved out of these arrangements, ED physicians will simply become another expense item, inviting even less favorable treatment. I am just saying that we need to start working on developing systems and standards for the attribution of the work done in the ED now, before this payment reform cake is fully baked.

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Emergency Medicine and Payment Reform – Becoming Part of the Solution PART III

Health care is bankrupting this country. The truth is, emergency physicians are as much a part of the problem as any other provider, health plan, or patient in this country. Many emergency physicians over-order scans and tests, practice defensive medicine, over-utilize consultants, don’t pay much attention to the cost of drugs and treatments we order or prescribe, and generally spend too much money for too little benefit. I could argue convincingly that we are more effective and efficient than most physicians, especially in light of the difficulties of practice in the ED; but our challenge is not just to dispel the mistaken assumption that ED services do not meet the value proposition. We must simultaneously participate in developing solutions to the cost-effective care conundrum, or the payers and politicians will focus on ways to work around us, or through us.

Policy makers have selected payment reform as the primary path to cost-effective care, and fee for service as the principle foil responsible for our health care financing predicament. I could argue that tacking ‘for profit’ in front of ‘health plans’ is equally responsible, but this is, after all, America. Health reform is in many respects predicated on the concept of risk sharing: sharing the financial risks of care (and the rewards of cost-effective care) between insurers, providers, and patients on the assumption that having ‘skin in the game’ will solve the problem. Bundled payments, episodes of care, ACOs, pay for performance: its all designed to restrain costs by sharing risk, which is presumed to motivate providers to adopt strategies and develop infrastructure designed to cut costs (first) and improve care (second). The most critical role that ACEP has in the next few years is to determine how EPs can participate in the context of payment reform while preserving our value and protecting our practices.
Let’s talk about ACOs first. To make a very complicated story short, ACOs are likely to be about full capitation, or about risk pools, or both; and they are also about consolidation of physician practices to facilitate this risk sharing. In my experience, one consequence of this consolidation is that the PHOs (physician hospital organizations – soon to morph into ACOs) tend to pay lower rates to EPs than health plans pay. EPs are going to have to find ways to share risk in ACOs as independent practitioners or as hospital employees without sacrificing significant income or undermining practice quality and autonomy. Half of ED physicians are either hospital employees or the employees of academic institutions, and the other half are partners or independent contractors (or employees) of groups contracted to staff the ED. What the former need to understand about the latter is that the independent practice of emergency medicine is key to defining the commercial value of EP services: anything that undermines the payment of claims from an EP who is engaged in the ‘independent practice’ of EM undermines the wages of the EP who is employed by a hospital, a university or an HMO. We are all part of a national market for EP services. If the mode of our participation in ACOs, either as contracted groups, or employees, turns EP services into a commodity, we, and perhaps our patients, will suffer. Thus, when ACEP talks about EP participation in ACOs, or contributes to the development of model contracts, or policies for revenue or risk-pool distribution, or strategies for coordination of care with other ACO-participating providers; these three different modes of EM practice (independent contractor, employee, educator) need to be factored into the equation, most likely in separate and distinct approaches.
Another set of strategies for cost-containment and payment reform is the concept of bundled payments and episodes of care. I liken this to carving off most of the meat before throwing the bone to the pack of hounds. I suspect it will not be easy to identify episodes of care or bundled payment categories that will accurately reflect the contribution of EPs to the overall effort expended on these patient groupings. The management of abdominal pain is s tree with so many branch points it makes knee replacement look like an asparagus stalk. To complicate matters further, the three modes of EM practice will also have to be addressed in defining the EP’s share of the bundled payment for these episodes of care. For example, the work-up and management of a patient with abdominal pain in an environment like Kaiser is likely to be quite different than for the same patient in a community ED or a university teaching hospital where access to consultants, follow-up, and coordination of care are organized on a different model; even if you assume that under ACOs, access to EMRs and diagnostic services were equivalent. Personally, I think even though most episodes of care and bundled payments will focus on the higher-cost conditions, these approaches to payment reform are not likely to cover more than a modest percentage of the work EPs do, or the compensation we earn. Mostly, I believe, independent EM practitioners will be carved out of these payment reform modules because our level of participation will be difficult to predict, and our ability to restrict our role is limited. We are, after all, one of the few players on the team that regularly plays just about every position. The danger of being carved out, however, is that we then stick out like a sore thumb, an expense item begging to be trimmed.
I think one of the most effective ways for EPs and ACEP to contribute to solving the cost of care conundrum, and thus demonstrate our value to patients and payers alike, is through cost-effective care protocols. It is through the use of such protocols that EPs can earn a piece of the cost-sharing incentives, especially in risk pools. If we get carved out of bundled payments, we can get integrated back in under the risk-sharing umbrella through risk pools. Even so, it will still be necessary to utilize cost-effective care protocols that take into consideration each of the three EM practice modes. For example, hearing hoofbeats, you are more likely to encounter zebras in the ED of a major university teaching and referral center than in a small community hospital. Likewise, we should also focus on the most costly patients and types of care first, use best evidence, and take great care to protect our integrity as professionals and care givers. This last is what I mean by preserving the quality of our practice. An emphasis on cost-effectiveness is an invitation to inappropriate deferral of care, denial of access to needed testing and consultation, inappropriate discrimination in service, avoidable delays, and excessive risk taking, all of which hurts our patients and ourselves. Development of these protocols will not be easy, but adoption of these protocols across the spectrum of EM practice will be the real challenge. As I mentioned in the very beginning of this three-part diatribe, one hospital’s welcome cost effective protocol is another’s inadvertent financial misstep. It will take time to align incentives across all our modes of practice, medical staffs, hospital administrations, payers, and patients. Patient education as well as resident and provider training will be an essential part of the process, and all of us need to be part of the solution.

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