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A large pay gap exists between independent and hospital-employed doctors
The payment gap was $63,000 for primary care doctors, $178,000 for medical specialists and $150,000 for surgeons.
Doctors who work for hospital outpatient facilities get much higher payments for their services from Medicare than doctors who practice independently, according to a new study.
The research, based on Medicare claims data from 2010-2016, found that the program’s payments for doctors’ work were, on average, $114,000 higher per doctor per year when billed by a hospital than when billed by a doctor’s independent practice.
Published in Health Services Research, results found that the amount Medicare would pay for outpatient care at doctors’ offices would have been 80% higher if the services had been billed by a hospital outpatient facility. In 2010, the average set of Medicare services independent doctors performed annually for patients was worth $141,000, but charging for the same group of services would have grossed $240,000 if a hospital outpatient facility billed for them.
The payment difference varied by specialty. The payment gap was $63,000 for primary care doctors, $178,000 for medical specialists and $150,000 for surgeons.
Moreover, the study found the differential grew over time. From 2010-2016, the average difference between hospital outpatient and private practice payments grew from 80% higher to 99% higher.
WHAT’S THE IMPACT?
The main reason for these large payment differences: facility fees. For each service a doctor performs, Medicare pays hospital outpatient facilities both a fee for the doctor’s work and a fee for the facility, whereas private practices receive only doctor fees.
Although the doctor fees are a bit lower in hospital outpatient locations, the facility fees more than make up for the difference, and the total payments to hospitals are reflected in higher doctor salaries and bonuses.
The Centers for Medicare and Medicaid Services has been trying to correct this imbalance for years with policies that would pay both sites the same amount. In 2015, the Bipartisan Budget Act authorized CMS to impose site-neutral payments but grandfathered existing hospital outpatient facilities. Later, CMS expanded the equal payments to other hospital outpatient facilities, but the American Hospital Association sued to overturn this regulation.
In July 2020, the Appeals Court sided with HHS. The American Hospital Association and the Association of American Medical Colleges said they would seek to have the ruling overturned.
The groups filed for a petition for a rehearing, which was denied.
In February, the Supreme Court acknowledged the AHA’s request for judicial review. The government response was due by March 15, but on March 3, Norris Cochran, acting Secretary of Health and Human Service asked for an extension until April 14 to file the government’s response, according to court documents.
The significant difference between Medicare payments to hospital outpatient facilities and independent offices has encouraged hospitals and health systems to buy doctor practices, but the study noted that good research about this has been lacking up to now.
It found little evidence of a direct relationship linking the size of the pay gap between hospital outpatient facilities and independent offices, with hospitals buying doctor practices, in particular medical specialties. But it did find that doctors whose services had larger pay gaps were more likely to have a hospital buy their practice than doctors whose services had a smaller pay gap.
In an accompanying commentary, Dr. Michael Chernew of Harvard Medical School in Boston said the study had found that the ability of hospitals and employed doctors to earn more from Medicare had resulted in a greater amount of integration.
THE LARGER TREND
However, the authors pointed out that the Medicare payment difference is only one of many factors that have contributed to the huge increase in the share of doctors employed at hospitals over the past decade. For example, they found a higher probability of a doctor going to work for a hospital in highly concentrated hospital markets and rural areas.
Other studies, they said, have established that some health systems use integration with doctors’ offices as a bargaining chip with commercial health insurance plans. Also, some doctors may find that independent practice is less viable than it used to be for a variety of reasons.
It has also been suggested that many younger doctors prefer hospital employment to private practice because they crave economic security and work-life balance.
It’s been estimated that even the payments to hospitals vs. doctors could save CMS $11 billion over 10 years. But the paper illustrates that the payment disparities can also create broader market distortions because consolidation of hospitals and doctors’ offices has been shown to lead to higher prices overall.
Hospitals will likely continue to have staffing shortages despite falling COVID-19 cases
Estimations show that between now and March 20, 7% of U.S. counties will experience “significant strains” on their hospital workforces.
Despite recent declines in coronavirus cases nationwide, many hospitals may still have workforce shortages over the next 30 days due to COVID-19 hospitalizations, according to estimates from George Washington University.
The university’s Fitzhugh Mullan Institute for Health Workforce Equity recently launched its COVID-19 County Workforce Estimator, which predicts that between now and March 20, 7% of U.S. counties will experience “significant strains” on their hospital workforces. It attributes the strain to long-standing staffing problems with the added pressure of the pandemic.
It also predicts that 209 counties will need to implement crisis workforce strategies due to its analysis that ICU doctors in those counties will be forced to take care of 24 or more patients at a time. Hospitals in those locations will likely need to use non-ICU-trained staff to help care for patients, the analysis said.
Further, the tool suggests that 12 counties will need to use contingency workforce strategies that include adding more patients per team, float pools and overtime due to COVID-19 hospitalization rates of 25% or more.
While it estimates a portion of counties will face staffing strains over the next month, the estimator calculated that 2,189 counties will be able to maintain normal workforce strategies due to COVID-19 hospitalization rates of 25% or less.
An additional 736 counties either did not have a hospital or didn’t have enough data to assess potential COVID-19 workforce strains.
The estimator tool was built in collaboration with Premier, a healthcare improvement company, the National Association of County and City Health Officials, and IQVIA, a healthcare data and analytics organization.
WHY THIS MATTERS
Healthcare staffing shortages have been a worry for some time now due to the nation’s increasingly aging population, but COVID-19 has only added to the concern.
Even before the pandemic, studies predicted physician staffing shortages by upwards of 140,000 by 2030, as well as shortages in-home health aides, nursing assistants, nurse practitioners and medical lab technicians by 2025.
Labor experts suggest hospitals develop a proactive response to staff shortages, and the George Washington estimator was designed to do exactly that, according to Clese Erikson, the principal investigator on the project and deputy director of the Health Equity Workforce Research Center.
Local leaders and hospital administrators can use the tool to gauge their county’s ability to care for COVID-19 hospitalized patients and others who need critical care services.
THE LARGER TREND
Outside of the ICU, many hospitals are also experiencing nursing shortages for several reasons, including the possibility that nurses could get $150 an hour to be a traveling nurse versus the $48 an hour they are paid as hospital staff.
In other cases, nurses had to choose between work and having children at home while schools were not holding in-person sessions. Some nurses who were close to retirement chose to leave while others left for work outside of acute care settings.
On top of workforce shortages, the ongoing COVID-19 pandemic has led many healthcare workers to experience strains on their mental health, including anxiety, stress, depression and loneliness.
ON THE RECORD
“The shortages could occur just as public health officials warn that variants of the coronavirus are spreading in the United States and could trigger a sharp rise in the number of Americans infected,” Erikson said.
“Our new online estimator will help county and local public health officials project shortages in the near future and take steps to help keep staffing at safe levels.”
Financial incentives for hospitals spur rapid changes to opioid use disorder treatment
Strengthening the link between the ED and treatment offers an opportunity to combat the opioid epidemic.
Hospital emergency departments not only care for patients with overdose and other complications from opioid use, but they also serve as vital touch points to encourage patients into longer-term treatment. After an overdose, patients are at risk for repeat overdose and death.
Pennsylvania is unique in establishing a voluntary incentive program to improve the rate at which patients with opioid use disorder receive follow-up treatment after emergency department care. Evaluations of the program show that financial incentives are effective in producing rapid treatment innovations for opioid use disorder.
In a new study, researchers at the Perelman School of Medicine at the University of Pennsylvania found that Pennsylvania’s financial incentive policy encouraged hospitals to enact rapid system and practice changes to support treatment for opioid use disorder for patients visiting the ED.
The study, published in Psychiatric Services, evaluates the efficacy of the Opioid Hospital Quality Improvement Program (O-HQIP), which Pennsylvania pioneered in 2019. The program seeks to increase the rate of follow-up treatment for Medicaid patients within seven days of an ED encounter for opioid-related illness by offering financial compensation to hospitals who participate in the program.
WHAT’S THE IMPACT?
Strengthening the link between the ED and treatment offers an opportunity to combat the opioid epidemic, and the financial incentives have shown momentum for the efforts to improve treatment access.
The program identified four distinct treatment pathways: initiation of buprenorphine treatment during the ED encounter, warm handoff to outpatient treatment, referral to treatment for pregnant patients and inpatient initiation of methadone or buprenorphine treatment.
An initial incentive for participation was paid to hospitals in 2019, contingent on participation in all four pathways, with lesser payments for partial participation. In future years, hospitals can earn additional incentives for improvements in performance.
To evaluate the degree of the program’s success, researchers conducted 20 semistructured interviews with leaders from a diverse sample of hospitals and health systems across Pennsylvania. The interviews revealed that the incentives oriented institutional priorities toward expanding opioid treatment access.
Hospitals were often on the cusp of change and responded to this nudge to prioritize opioid treatment access. But most hospitals – specifically, smaller or independent hospitals with lower volumes of patients with opioid use disorder – were unable to justify investing in these resources internally. Some hospitals noted resources as a barrier to participation, despite the incentive payments.
While initiating buprenorphine in the ED is proven to improve patients’ health outcomes and retention in treatment, many hospitals found implementing a pathway for buprenorphine difficult and time-consuming, and all partially participating hospitals chose to forgo this pathway.
Future work will focus on overcoming barriers to implementing buprenorphine treatment.
THE LARGER TREND
In 2019, buprenorphine was found by Mayo Clinic Proceedings to be one of three FDA-approved drugs that are underused in helping patients combat opioid addiction. Patient compliance with buprenorphine, that analysis found, is relatively high and associated with improved rates of sobriety and a reduction in accidental overdoses.
The opioid epidemic has long been a challenging issue both for Americans and the healthcare system that treats them, and the mortality statistics are significant. The American Academy of Family Physicians published research in 2019 showing that, if there’s no change in the annual incidence of prescription opioid misuse, annual opioid deaths could hit 82,000 by 2025.
From finding new, more cost-effective care delivery models to establishing outpatient addiction treatment programs, there’s an opportunity for investors to pump some much needed cash into the efforts to curb opioid misuse. If done correctly, the investors can see a healthy ROI, while also helping patients with addiction issues and easing the burden on the healthcare system.
RemoteICU sues HHS for not reimbursing for telehealth provided by physicians outside of the country
The Medicare Act “prohibits Medicare payment for services that are not furnished within the United States,” according to the filing.
RemoteICU, a telemedicine provider group, is suing the Department of Health and Human Services and the Centers for Medicare and Medicaid Services for not reimbursing telehealth services provided by physicians who are located outside the United States, according to a federal lawsuit filed last week in Washington.
RICU wants reimbursement for telehealth services provided within the U.S., but not necessarily by a physician who lives within its borders.
The company employs physicians who live outside the country, but are U.S. board-certified critical-care specialists and licensed in one or more U.S. jurisdictions. With RICU’s telecommunications system, these physicians can provide critical-care services in U.S. hospital ICUs, the lawsuit said.
“Although RICU’s physicians live abroad, they serve as full-time, permanent staff members of the U.S. hospitals at which they serve patients,” the company said in the court filing.
“By employing U.S.-licensed intensivists who live overseas, RICU has enabled the American healthcare system to recapture talent that would otherwise be lost to it – and this has helped to alleviate the ongoing shortage of intensivists in American hospitals.“
When CMS expanded the list of telehealth services for which it reimbursed in December 2020 to include critical care services, RICU began offering its physicians to hospitals that couldn’t afford ICU telehealth without Medicare reimbursement, the court filing said.
However, after the company reached out to several officials from HHS and CMS, it was notified that Medicare could not reimburse the client hospitals for RICU’s services, because the Medicare Act “prohibits Medicare payment for services that are not furnished within the United States,” according to the filing.
The company is seeking a preliminary injunction to stop HHS and CMS from denying Medicare reimbursement for telehealth services on the basis of a provider’s physical location outside of the United States at the time of service.
WHAT’S THE IMPACT?
RICU claims that, by failing to reimburse for the critical care telehealth services provided by its physicians, HHS and CMS are causing “immediate harm both to RICU and to the public.”
It argues that it’s filling a gap in critical care that has been exacerbated by the pandemic.
“There remains [a] significant unmet need for critical care services, as desperately sick patients have overwhelmed ICU resources across the country,” RICU said in the court filing.
“In some cases, lack of adequate care can mean the difference between life or death. And one of the groups most at risk from death and serious illness due to COVID-19 is the elderly – the very same population that relies upon Medicare.”
Without reimbursement, RICU says that some of its current clients, as well as potential customers, will not be able to offer its services.
The company argues that this causes “significant, unrecoverable monetary damages” because tele-ICU providers that use physicians located within the U.S. are eligible for reimbursement and therefore have a competitive edge over RICU.
Further, it says that it has already begun losing business because of hospitals’ inability to receive Medicare reimbursement.
THE LARGER TREND
CMS has widely expanded the list of telehealth services it will reimburse for during the pandemic to include services such as emergency department visits, initial inpatient and nursing facility visits, and discharge-day management.
While only 14 states currently have true “payment parity” for telehealth, 43 states and D.C. have implemented a telemedicine coverage law, according to Foley & Lardner report.
That report, among others, claims telehealth will continue to grow as an integral part of healthcare as time goes on.
Last year, Geisinger health system in Danville, Pennsylvania, implemented telehealth ICU technology in several of its hospitals to support its in-person clinical staff.
ON THE RECORD
“The Critical Care Ban is causing irreparable harm to RICU, which is suffering ongoing financial and reputational harms that cannot be remedied in the future,” the court filing said.
“The balance of the equities favors an injunction, because Defendants have already admitted that there is a desperate medical need for the critical care that RICU would provide but for the Critical Care Ban.
“And, finally, preliminary injunction would be in the public interest because, across the United States, Americans stricken by the COVID-19 pandemic are in desperate need of critical care – a need that RICU can help meet. It is not hyperbole to say that the requested injunctive relief is in the public interest because it could save lives.”
Experts warn US risks delaying ‘normal’ summer
Experts warn US risks delaying ‘normal’ summer
President Biden‘s announcement that there will be enough vaccines for all adults by May is raising hopes for a return to normal soon.
But the next few months in the pandemic are critical. Concern is growing over moves by some states to lift restrictions already, while new variants of the virus are on the rise in the U.S. Experts warn that actions taken now risk delaying getting back to some semblance of normal.
Health officials are urging restrictions to remain in place for the final stretch, saying that it will not be much longer before the situation markedly improves, and it does not make sense to lift all restrictions when widespread vaccinations are in sight.
Biden on Wednesday issued his most forceful comments to date, calling out the governors of Texas and Mississippi for lifting their states’ mask mandates and all capacity limits on businesses.
He noted that vaccinations for all adults are on the horizon.
“The last thing we need is Neanderthal thinking that in the meantime everything’s fine, take off your mask, forget it,” he said. “It still matters.”
Estimates differ on when exactly the country might return to something like “normal,” though many say they expect this summer will be much better.
Former Food and Drug Administration Commissioner Scott Gottlieb said on CNBC on Wednesday that he thinks even as soon as April will be “profoundly better,” given that vaccine supply will have ramped up significantly, allowing vaccine availability to be “wide open” by then.
Centers for Disease Control and Prevention Director Rochelle Walensky on Wednesday put the time frame at three months until the country could be vaccinated.
“The next three months are pivotal,” she said.
Thomas Tsai, a researcher at the Harvard T.H. Chan School of Public Health, said that by summer, “I think we can have a much more, I don’t want to say normal, but at least a ‘new normal’ summer.”
But experts warn that the return to normal could actually be delayed if restrictions are lifted too soon, causing a new spike in cases in the near term.
Tsai likened the current situation to the seventh inning stretch of a baseball game. “Progress has been made; it’s OK to take stock of that,” he said. “How we play the next two innings determines if this is a single game or turns into a doubleheader.”
Maintaining restrictions as people get fatigued and see the end in sight could be a challenge, though, particularly in red states that were skeptical of instituting health restrictions from the start.
Texas Gov. Greg Abbott and Mississippi Gov. Tate Reeves, both Republicans, pointed to the ongoing vaccination campaign in saying that the time has come to end restrictions.
“With the medical advancements of vaccines and antibody therapeutic drugs, Texas now has the tools to protect Texans from the virus,” Abbott said Tuesday. “We must now do more to restore livelihoods and normalcy for Texans by opening Texas 100 percent.”
Responding to Biden’s criticism on Wednesday, Reeves added: “Mississippians don’t need handlers.”
“As numbers drop, they can assess their choices and listen to experts,” he added. “I guess I just think we should trust Americans, not insult them.”
Gottlieb argued for a middle ground, saying that public health officials risk having the public simply ignore all guidance if they do not provide a “realistic glide path to a better future,” though March is “a little bit premature” to lift all restrictions.
“March really is a difficult month,” he said. “It sits between two worlds. February was a raging epidemic, it was very clear we needed to have measures in place. I think April’s going to be profoundly better, and March is sitting in the middle.”
Variants of the virus also pose a threat that adds another degree of uncertainty. The most common variant spreading in the US, known as B117, or the United Kingdom variant, responds well to vaccines, but is more infectious.
“The B117 hyper-transmissible variant looms ready to hijack our successes to date,” Walensky said.
Variants first identified in Brazil and South Africa also pose a risk of reducing the effectiveness of the vaccines, though the extent is not fully clear, and vaccine manufacturers are preparing backup plans to provide booster shots or updated vaccines if necessary.
“We are at a critical nexus in the pandemic,” Walensky said. “So much can turn in the next few weeks.”
After weeks of declines, both cases and deaths are ticking up. According to CDC data, the seven-day average of new cases per day, at 66,000, is up 3.5 percent from the past week, and deaths, at just over 2,000 per day, are up 2.2 percent.
Barbara Alexander, president of the Infectious Diseases Society of America, issued a statement Wednesday calling on people to continue wearing masks, distancing from others, and avoiding large gatherings.
“All of these measures together will bring us closer to ending the pandemic,” she said. “Abandoning them now will postpone the day we can put COVID-19 behind us.”
Still, the declines in past weeks and the increasing pace of vaccinations is offering some hope after a long year.
“I’m more optimistic than I have been in the last year,” Tsai said.
Cartoon – It’s not the Heat, it’s the Stupidity!
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HENRY KOTULA 