Medicare is changing the way it pays surgeons

Starting in 2017, Medicare will end global payments for operations. The current payment scheme combines preoperative, operative, and postoperative care into one fee. When the change occurs, each of those events will have to be billed separately—otherwise known as “unbundling.”

I missed this news when it first appeared late last year and thank one of my blog followers who calls himself Artiger for bringing it to my attention. An Advisory Board piece summarized the situation.

After analyzing a number of claims, Medicare came to the conclusion that it was paying for duplicate services. What a revelation! I could have told them that without a claims analysis.

For many years, certain surgical specialists have been delegating preoperative evaluations for “medical clearance” and postoperative management of everything but the incision to internists and hospitalists. Since the global fee was meant to include pre-and postop care, Medicare was indeed paying twice for the same service.

Representatives of the American College of Surgeons expressed concern that sicker patients would need more in-hospital postoperative visits thereby incurring more bills. [If they receive more care, maybe they should pay more.] They also worried that since postoperative care was covered under the global fee, patients might forgo office visits after surgery because of increased costs.

The unbundling of the global fee may have other unintended consequences. Since preoperative and postoperative care reimbursement will be separated from the fee for the operation itself, surgeons will be paid less for performing surgery.

Most surgeons would rather operate than make rounds and may look to perform more surgery to make up for the loss of income. This could end up costing Medicare more money.

With global payments, there is no incentive for a surgeon to keep a patient in the hospital longer than absolutely necessary. When the payment method changes, the exact opposite will exist. And surgeons who aren’t very busy might schedule more postoperative office visits to make up the difference caused by the reduction in the surgical fee.

This might all become moot anyway because Health and Human Services Secretary Sylvia Matthews Burwell has proposed that 30% of Medicare payments be converted to a non-fee-for-service model by the end of next year rising to 50% by the end of 2018.

According to a news@JAMA article, doctors may be given incentives to join Accountable Care Organizations. Quality indicators such as readmissions and infections currently applied to hospital fees might be imposed on doctors too. More bundled payments for acute care illnesses may be created. [This of course is the exact opposite of the plan to unbundle global surgery fees. I'm getting confused].

One thing I'm sure of is that none of this is making me regret that I retired.

The $117,000 surgical assistant's fee

In a post a few months ago, I wondered why Medicare could not control its costs using the investigative power of the federal government instead of releasing physician payment data and relying on journalists to do the work.

Two stories that appeared within days of each other raise a similar question about the private insurance industry's methods.

An article in Modern Healthcare described the impending closure of the proton-beam therapy center at Indiana University, one of only 13 such facilities in the country. Proton-beam therapy, which is very expensive, has never been proven better than other types of treatment for prostate cancer.

Here's what Modern Healthcare had to say:

Blue Shield of California and Aetna last year said they would no longer cover proton therapy as a treatment for localized prostate cancer. Cigna Corp. does not cover proton-beam therapy in the treatment of prostate cancer either.

“I look at this closure as a sign that insurers are finally empowered to say this is a dubious medical technology” in the treatment of patients with prostate cancer, said Amitabh Chandra, director of health policy research at the Harvard Kennedy School of Government.

A couple of days later in the New York Times, a piece by Elisabeth Rosenthal related several anecdotes about patients who were saddled with large and unexpected bills from out-of-network physicians who were involved in their care.

A particularly egregious example was a $117,000 bill from the surgeon who assisted at a 3-hour cervical spine fusion operation. Just to put it in perspective, that's $39,000 per hour or $650 per minute—numbers a professional athlete might envy.

Although the procedure took place at a teaching hospital where residents are usually available to assist, the operative record apparently documented that no qualified resident was available.

The surgeon billed $133,000, but since he was in-network, he received only about $6,200.

Despite some pushback by the patient, the insurance company eventually paid the surgical assistant's $117,000 fee. If he's worth 19 times more than the operating surgeon, maybe he should be doing the operation instead of merely assisting.

Apparently this is not an isolated event. Quoting the Times, "J. Edward Neugebauer, chief litigation officer at Aetna, said the company had ... sued an in-network neurosurgeon on Long Island who always called in an out-of-network partner to assist, resulting in huge charges. The surgeons shared a business address."

The story in the Times related several other instances of insurance companies acquiescing and paying extremely high out-of-network charges.

If insurance companies can decide not to pay for proton-beam therapy, why do they agree to pay an assistant surgeon $650 per minute? I realize they didn't want to leave the patient holding the bag, but have they no recourse other than to pay?

On the home page of the Medical Society of the State of New York, its president responded to the Times piece by pointing out that New York's legislature just passed a law addressing surprise bills, and he correctly noted that some insurance companies do not pay in-network physicians enough to cover their expenses.

But he failed to acknowledge that many of the fees noted in the article are outrageous. Why not at least mention that issue? Doesn't he realize those fees make all doctors look bad?

A different take on Medicare's release of doctor payment data

Journalists have had a good time with the Medicare data on payments to doctors. The most recent exposé is headlined "Taxpayers face big Medicare tab for unusual doctor billings" by the Wall Street Journal. Because of a paywall, most people did not have a chance to read the article.

It recounted several anecdotes about physicians who received huge amounts of money for procedures of dubious worth. I will summarize two of them.

In 2012, an internist in Los Angeles was paid close to $2.3 million for a procedure known as "enhanced external counterpulsation," or EECP, which is supposed to ameliorate angina in patients who are not surgical candidates.

Although not a cardiologist, he apparently used EECP on 615 patients. At the Cleveland Clinic, whose chairman of cardiology says the procedure should rarely be used, the procedure was performed on only 6 patients in a year—that's 6 patients total by a staff of 141 cardiologists.

A Florida dermatologist received $2.41 million from Medicare in 2012 for 15,610 radiation treatments for melanoma in 94 patients, an average of 166 treatments per patient. The usual number is 20 to 35 treatments. The doctor said he billed for each lesion separately and treated each one about 40 times.

A radiation oncologist who was interviewed questioned the appropriateness of the machine the dermatologist was using and said, "When a patient has several lesions, they commonly get treated simultaneously and are billed for as a single treatment, he said."

That is the way Medicare handles most multiple procedures. At best you might get away with billing a partial amount for an additional treatment.

Any physician who has spent time in the private practice of any medical specialty that involves the treatment of elderly patients can tell you that Medicare will nickel and dime you to death over a minor dispute about an evaluation and management code.

Medicare is also notorious for holding back money due to physicians who are just trying to make a living. A classic ploy is to request a copy of the dictated operative note for a simple procedure. This will add 4 to 6 weeks to the eventual cutting of a check.

They routinely perform unannounced on-site audits of doctors offices looking for discrepancies in documentation. I once experienced one myself and luckily was not cited or fined.

Here are some questions that I haven't seen any journalist ask.

Why does the Wall Street Journal have to point out such flagrant outliers? What does the Wall Street Journal know about detecting these practices that Medicare could not do for itself? How can Medicare continue to pay top dollar for questionable treatments and billing practices? Why doesn't Medicare do something simple like automatically reviewing any practice that receives more than say $500,000 in a single year?

Inquiring minds want to know.

What's your opinion?

New rules for paying MDs proposed by hospital system in NY

New York City’s Health and Hospitals Corporation (HHC), which runs 11 hospitals in four of the five boroughs of New York, is negotiating a new deal with the union representing some 3,300 salaried physicians. The corporation wants to base MD pay raises on 13 quality indicators.

The New York Times article that broke the story does not list all of the indicators but mentioned the following: how well patients say their doctors communicated with them, rates of readmission within 30 days after discharge for heart failure and pneumonia, how quickly emergency department patients go from triage to beds, whether doctors get to the operating room on time and how quickly patients are discharged.

The union has countered with suggestions that more indicators be used such as “going to community meetings, giving lectures, getting training during work hours, screening patients for obesity, and counseling them to stop smoking.” And they may ask that more doctors and support staff be hired.

As is typical of the doctors' union, they had problems with the plan. They already get paid for giving lectures and training during work hours. Aren't screening patients for obesity and counseling them to stop smoking considered part of a physician's normal work? I do agree that doctors should receive combat or hardship pay for attending community meetings.

Another feature of the plan, which was glossed over in most secondary reports, is that the bonuses “would be given to physicians as a group at each hospital, rather than as individuals, so that even the worst doctor would benefit.” (More on this below)

The Times piece quotes officials from both sides and outside experts who offered opinions ranging from it’s a wonderful new world order to it will never work.

I tried to obtain a list of all 13 performance indicators, but it is nowhere to be found. However, looking at the ones in the Times article may be enough.

Patient assessments of how well their doctors communicated with them is going to be confounded by the fact that there are no private patients and few one-to-one doctor-patient relationships in the HHC system. Add in layers of medical students, physician assistants, residents and fellows combined with a patient population that, in many cases, suffers from a language barrier and may not even know who their doctors are, and it will be difficult to tell just who is a poor communicator.

I have discussed rates of readmission within 30 days after discharge for heart failure and pneumonia in a previous blog. This is a very poor indicator of quality and depends greatly on patient compliance with medications and instructions such as diet and activity.

How quickly emergency department (ED) patients go from triage to beds is a function of the census in the ED. This depends on many variables the MDs can’t control, such as availability of inpatient floor and ICU beds, nurse staffing, promptness in room cleaning, and many other factors.

Whether doctors get to the operating room on time is an interesting issue. As a former chairman of surgery, I have tackled this one in three different hospitals without success. First of all, what does this have to do with quality? Secondly, I truly believe that it will never be solved.

How quickly patients are discharged: Does this mean the time from admission to discharge, or is it the time from when the decision to discharge a patient is made until he actually leaves? If it’s the latter, again there are many forces at work. Does the patient want to go home? Can he get a ride? Is the bed ready at the nursing home or rehab center? If he’s being transferred by ambulette, will it arrive promptly? Is the nurse too busy to do the paperwork? Is the doctor, who may be a resident, too busy to do the paperwork?

The fact that bonuses will be tied to group, not individual, performance dooms the plan to failure. It reminds me of high school when someone threw a spitball and the teacher made everyone stay after school.

What do you think?

Docs are not happy: Medscape’s survey of physicians

MedScape recently surveyed over 24,000 US physicians regarding their compensation. In general, incomes are down somewhat since the 2011 survey. Most news outlets focused on the finding that only 11% of doctors considered themselves “rich,” which was not defined. Many docs pointed out that although their incomes were high, they had many expenses and debts.

Not receiving any notice were some other interesting results.

Only 54% of the respondents said that they would choose medicine as a career if they had a chance to “do it all over again.” Think about that. How sad. Anecdotally, I know a lot of unhappy doctors, but for almost half to admit that they made a poor career choice is shocking. Only 41% would choose the same specialty, and a mere 23% would practice in the same setting.

Another outcome of note is that of satisfaction by specialty. With 64% saying they were satisfied, dermatologists led the list. Specialties which had fewer than 50% of their ranks expressing satisfaction were the core groups, family medicine, internal medicine, obstetrics/gynecology and my own specialty, general surgery. Fewer than half of the general surgeons would choose medicine as a career again or general surgery as a specialty.

These findings will likely not be cited by medical schools looking to recruit applicants, who apparently don’t read surveys like this anyway. It’s not very flattering for most specialties either. How bad is it when even one-third of the dermatologists aren’t satisfied? So-called “organized medicine” will ignore all of this as they have done for years. The government will continue to put the squeeze on.

I’ve said it before; the future of medicine is indeed bleak.

What if doctors could charge like airlines?

Say you want to book a trip to Amsterdam in the next few months. You know that Delta flies there. You go to Delta’s web site to see what the fares are like.

Here is the first screen after you insert your dates.

Wow! $368.60 one way. Looks good, right?

Oh, but what’s this (arrow)? The total price is $901.60? They apparently did not have a smaller font for the total price figure.

So you click on that number and here’s what you see.

Whoop-de-damn-do, the base fare includes US tax. But what on earth are all the other charges? The “International Surcharge” is a mere $470.00. In medicine, this is called “unbundling.”

I wish doctors could charge like this. Of course, we can’t because our fees are heavily regulated and discounted by the government and other third party payers while expenses steadily rise.

But I can dream. Here is a sample bill.

In case you are wondering, for an appendectomy Medicare's average reimbursement to the surgeon is $586.00.