Category Archives: American Medical Association (AMA)

Four Implicit Messages to Healthcare in the FTC Non-Compete Rule

Posted on by • Posted in American Hospital Association (AHA), American Medical Association (AMA), Competition, Federal Trade Commission (FTC), Federation of American Hospitals, Health System, Hospital, Hospital Industry, Non-Compete Agreements, Physician • Leave a comment
Four Implicit Messages to Healthcare in the FTC Non-Compete Rule

Last Tuesday (April 23), the Federal Trade Commission (FTC) issued a 570-page final rule in a partisan 3-2 vote prohibiting employers from binding most American workers to post-employment non-competition agreements (the “Final Rule”):

“Pursuant to sections 5 and 6(g) of the Federal Trade Commission Act (“FTC Act”), the Federal Trade Commission (“Commission”) is issuing the Non-Compete Clause Rule (“the final rule”). The final rule provides that it is an unfair method of competition—and therefore a violation of section 5—for persons to, among other things, enter into non-compete clauses (“non-competes”) with workers on or after the final rule’s effective date. With respect to existing non-competes—i.e., non-competes entered into before the effective date—the final rule adopts a different approach for senior executives than for other workers. For senior executives (in policy setting/executive positions who earned more than $151,164 last year), existing non-competes can remain in force, while existing non-competes with other workers are not enforceable after the effective date.” (p.1)

“Concerns about non-competes have increased substantially in recent years in light of empirical research showing that they tend to harm competitive conditions in labor, product, and service markets. … When a company interferes with free competition for one of its former employee’s services, the market’s ability to achieve the most economically efficient allocation of labor is impaired. Moreover, employee-noncompetition clauses can tie up industry expertise and experience and thereby forestall new entry… competes by employers tends to negatively affect competition in labor markets, suppressing earnings for workers across the labor force—including even workers not subject to noncompete. This research has also shown that non-competes tend to negatively affect competition in product and service markets, suppressing new business formation and innovation… Yet despite the mounting empirical and qualitative evidence confirming these harms and the efforts of many States to ban them, non-competes remain prevalent in the U.S. economy. Based on the available evidence, the Commission estimates that approximately one in five American workers—or approximately 30 million workers—is subject to a non-compete. The evidence also indicates that employers frequently use non-competes even when they are unenforceable under State law.” (p.6)

On its home page, the FTC says “with a comprehensive ban on new non-competes, Americans could see an increase in wages, new business formation, reduced health care costs and more.”(www.ftc.gov)

The rule takes effect 120 days following its publication in the Federal Register and is applicable to every employer including specified operations in not-for-profit organizations (which represents the majority of hospitals, nursing homes and others). The agency noted it received 26,000 comment letters since the proposed rule was published January 19, 2023 including significant reaction from healthcare organizations.  By the end of last week, two lawsuits were filed: one by the Chamber of Commerce in the United States District Court for the Eastern District of Texas and the second by a global tax services and software company in the Northern District of Texas – each challenging the Final Rule and arguing that the FTC lacked the authority. Others are likely to follow and its implementation will be delayed as arguments about its merits and the FTC’s standing to make the rule find their way thru the courts.

Special attention to hospitals and physicians in the rule

Notably, the use of non-competes in healthcare is a central theme in the rule, particularly in tax-exempt hospital and medical practice settings. Noting that one in 5 workers (30 million) and up to 45% of physicians work under non-compete agreements today, the Commissioners illustrated the need for the rule by inserting vignettes from 14 workers in their introduction: 4 of these were healthcare workers– 2 physicians and employees of a hospital and electronic health record provider (p.11-13). Throughout its exhaustive commentary, the Commissioners took issue with assertions by healthcare organizations about the potential negative consequences of the rule citing lack of empirical evidence to justify opposition claims. References to tax-exempt hospitals, their for-profit activities and their employment arrangements with physicians are frequent in the commentary justifying the application of the rule as follows:

“Many commenters representing healthcare organizations and industry trade associations stated that the Commission should exclude some or all of the healthcare industry from the rule because they believe it is uniquely situated in various ways. The Commission declines to adopt an exception specifically for the healthcare industry. The Commission is not persuaded that the healthcare industry is uniquely situated in a way that justifies an exemption from the final rule. The Commission finds use of non-competes to be an unfair method of competition that tends to negatively affect labor and product and services markets, including in this vital industry; the Commission also specifically finds that non-competes increase healthcare costs. Moreover, the Commission is unconvinced that prohibiting the use of non-competes in the healthcare industry will have the claimed negative effects.” (p.303)

Not surprisingly rule, responses from the hospital trade groups were swift, direct and harshly critical:

  • American Hospital Association (www.aha.org):” The FTC’s final rule banning non-compete agreements for all employees across all sectors of the economy is bad law, bad policy, and a clear sign of an agency run amok. The agency’s stubborn insistence on issuing this sweeping rule — despite mountains of contrary legal precedent and evidence about its adverse impacts on the health care markets — is further proof that the agency has little regard for its place in our constitutional order. Three unelected officials should not be permitted to regulate the entire United States economy and stretch their authority far beyond what Congress granted it–including by claiming the power to regulate certain tax-exempt, non-profit organizations. The only saving grace is that this rule will likely be short-lived, with courts almost certain to stop it before it can do damage to hospitals’ ability to care for their patients and communities.”
  • Federation of American Hospitals (www.fah.org): “This final rule is a double whammy. In n a time of constant health care workforce shortages, the FTC’s vote today threatens access to high-quality care for millions of patients.”

By contrast, the American Medical Association (www.ama-assn.org) response was positive, linking its support for the rule to AMA’s ethical principles of physician independence and clinical autonomy.

Four implicit messages to healthcare are evident in the rule

It is unlikely the rule will become law in its current form. Opposing trade groups, employers dependent on non-competes for protections of trade secrets and business relationships and many others will actively pursue its demise in courts actions. But a review of the text makes clear the FTC is intensely focused on competition and consumer protections in healthcare akin to its ongoing challenges to hospital consolidation.

Four messages emerge from the text of the rule:

1-‘The healthcare industry is a business which needs more regulation to protect consumers and its workforce by lowering costs and stimulating competition. ‘

“Many commenters representing healthcare organizations and industry trade associations stated that the Commission should exclude some or all of the healthcare industry from the rule because they believe it is uniquely situated in various ways. The Commission declines to adopt an exception specifically for the healthcare industry. The Commission is not persuaded that the healthcare industry is uniquely situated in a way that justifies an exemption from the final rule. The Commission finds use of non-competes to be an unfair method of competition that tends to negatively affect labor and product and services markets, including in this vital industry; the Commission also specifically finds that non-competes increase healthcare costs. Moreover, the Commission is unconvinced that prohibiting the use of non-competes in the healthcare industry will have the claimed negative effects.” (p.373)

2-‘Physicians play a unique role in healthcare and deserve protection.’

“Some healthcare businesses and trade organizations opposing the rule argued that, without non-competes, physician shortages would increase physicians’ wages beyond what the commenters view as fair. The commenters provided no empirical evidence to support these assertions, and the Commission is unaware of any such evidence. Contrary to commenters’ claim that the rule would increase physicians’ earnings beyond a “fair” level, the weight of the evidence indicates that the final rule will lead to fairer wages by prohibiting a practice that suppresses workers’ earnings by preventing competition; that is, the final rule will simply help ensure that wages are determined via fair competition. The Commission also notes that it received a large number of comments from physicians and other healthcare workers stating that non-competes exacerbate physician shortages.” (p.157)

“Hundreds of physicians and other commenters in the healthcare industry stated that non-competes negatively affect physicians’ ability to provide quality care and limit patient access to care, including emergency care. Many of these commenters stated that non-competes restrict physicians from leaving practices and increase the risk of retaliation if physicians object to the practices’ operations, poor care or services, workload demands, or corporate interference with their clinical judgment. Other commenters from the healthcare industry said that, like other industries, non-competes bar competitors from the market and prevent providers from moving to or starting competing firms, thus limiting access to care and patient choice. Physicians and physician organizations said non-competes contribute to burnout and job dissatisfaction, and said burnout negatively impacts patient care.” (p.202)

“…the Commission notes that while the study finds that non-competes make physicians more likely to refer patients to other physicians within their practice—increasing revenue for the practice—it makes no findings on the impact on the quality of patient care. The Commission further notes that pecuniary benefits to a firm cannot justify an unfair method of competition.” (p.206)

3.’Tax exempt hospitals that operate like for-profit entities deserve special scrutiny from regulators and are thus subject to the rule’s provisions.’

“Merely claiming tax-exempt status in tax filings is not dispositive. At the same time, if the Internal Revenue Service (“IRS”) concludes that an entity does not qualify for tax-exempt status, such a finding would be meaningful to the Commission’s analysis of whether the same entity is a corporation under the FTC Act.” (p.53)

“As stated in Part II.E, entities claiming tax exempt status are not categorically beyond the Commission’s jurisdiction, but the Commission recognizes that not all entities in the healthcare industry fall under its jurisdiction. “(p.374)

“While the Commission shares commenters’ concerns about consolidation in healthcare, it disagrees with commenters’ contention that the purported competitive disadvantage to for-profit entities stemming from the final rule would exacerbate this problem. As some commenters stated, the Commission notes that hospitals claiming tax-exempt status as nonprofits are under increasing public scrutiny. Public and private studies and reports reveal that some such hospitals are operating to maximize profits, paying multi-million-dollar salaries to executives, deploying aggressive collection tactics with low-income patients, and spending less on community benefits than they receive in tax exemptions.943 Economic studies by FTC staff demonstrate that these hospitals can and do exercise market power and raise prices similar to for-profit hospitals.944 Thus, as courts have recognized, the tax-exempt status as nonprofits of merging hospitals does not mitigate the potential for harm to competitive conditions.” (p.383)

“Conversely, many commenters vociferously opposed exempting entities that claim tax exempt status as nonprofits from coverage under the final rule. Several commenters contended that, in practice, many entities that claim tax-exempt status as nonprofits are in fact “organized to carry on business for [their] own profit or that of [their] members” such that they are “corporations” under the FTC Act. These commenters cited reports by investigative journalists to contend that some hospitals claiming tax-exempt status as nonprofits have excess revenue and operate like for-profit entities. A few commenters stated that consolidation in the healthcare industry is largely driven by entities that claim tax-exempt status as nonprofits as opposed to their for-profit competitors, which are sometimes forced to consolidate to compete with the larger hospital groups that claim tax-exempt status as nonprofits. Commenters also contended that many hospitals claiming tax-exempt status as nonprofits use self-serving interpretations of the IRS’s “community benefit” standard to fulfill requirements for tax exemption, suggesting that the best way to address unfairness and consolidation in the healthcare industry is to strictly enforce the IRS’s standards and to remove the tax-exempt status of organizations that do not comply. An academic commenter argued that the distinction between for-profit hospitals and nonprofit hospitals has become less clear over time, and that the Commission should presumptively treat hospitals claiming nonprofit tax-exempt status as operating for profit unless they can establish that they fall outside of the Commission’s jurisdiction.” (p.377-378)

“After carefully considering commenters’ arguments, the Commission declines to exempt for-profit healthcare employers or to exempt the healthcare industry altogether.” (p.380)

4. ‘The net impact of non-compete agreements is harmful to the workforce and the public. ‘

“The Commission finds that with respect to these workers, these practices are unfair methods of competition in several independent ways:  

  • The use of non-competes is restrictive and exclusionary conduct that tends to negatively affect competitive conditions in labor markets.
  • The use of non-competes is restrictive and exclusionary conduct that tends to negatively affect competitive conditions in product and service markets.
  • The use of non-competes is exploitative and coercive conduct that tends to negatively affect competitive conditions in labor markets.
  • The use of non-competes is exploitative and coercive conduct that tends to negatively affect competitive conditions in product and service markets.” (p.105)

“The Commission notes that the vast majority of comments from physicians and other stakeholders in the healthcare industry assert that non-competes result in worse patient care. The Commission further notes that the American Medical Association discourages the use of non-competes because they “can disrupt continuity of care, and may limit access to care.” In addition, there are alternatives for improving patient choice and quality of care, and for retaining physicians, that burden competition to a much less significant degree than non-competes…commenters asserted that a ban on non-competes would upend healthcare labor markets, thereby exacerbating healthcare workforce shortages, especially in rural and underserved areas. A medical society argued that non-competes can allow groups to meet contractual obligations to hospitals, as physicians leaving can prevent the group from ensuring safe care. As the Commission notes, there are not reliable empirical studies of these effects, and these commenters do not provide any. However, the Commission notes that the rule will increase labor mobility generally, which makes it easier for firms to hire qualified workers.” (p.208)

“The Commission also noted that in three States—California, North Dakota, and Oklahoma—employers generally cannot enforce non-competes, so they must protect their investments using one or more of these less restrictive alternatives…Commenters provide no empirical evidence, and the Commission is unaware of any such evidence, to support the theory that prohibiting non-competes would increase consolidation or raise prices. “384

The bottom line:

Odds are this rule will not become law anytime soon allowing healthcare organizations to consider alternatives to the non-competes they use. Work-arounds for protection of intellectual property, talent acquisition, employment agreements are likely as HR professionals, benefits and compensation consultancies huddle to consider what’s next.

Those that operate in 3 states (CA, ND, OK) already face state reg’s limiting non-competes and more states are adding measures. As noted in the rule, the health systems in these states have not been debilitated by non-compete limitations nor empirical evidence of public/worker harm produced, so no harm no foul.

The bigger takeaways from this rule for healthcare—especially hospitals—are 2:

The rule may fuel already growing antipathy between the workforce and senior management. Physicians are frustrated and burned out. Mid-level clinicians, techs and nurses are not happy. The hourly workforce is insecure. The hospital workplace—its clinics, programs and services—is not a happy place these days. The rule might fuel increased union organizing activity among some work groups at a critical time when demand is high, utilization is increasing, resources are stretched, reimbursement is shrinking and conditions for solvency and sustainability in question for rural, safety net and community hospitals in areas of declining population.  And employed physicians will push-back harder against pressure from their hospital and private equity partners to work harder and produce more. The rule gives physicians a moral premise on which to oppose employer demands, whether the rule is implemented in its current form or not.

And the second equally notable takeaway is the rule’s specific attention to tax-exempt hospitals that operate as “for-profit” organizations. The FTC Commissioners question their tax exemptions and their investor-owned competitors are happy they noticed. They’re joined by investigations in 5 Committee’s of Congress with Bipartisan support for a fresh look at their bona fide eligibility despite strong pushback by the American Hospital Association and others.

This rule was introduced as a proposed rule last year with a comment period of 90 days allowed. Fifteen months and 26,000 comments later, it’s the latest reminder that the future of healthcare is everyone’s business and hospitals and physicians see that future state differently.

In its summation, the FTC estimates that this final rule will lead to new business formation growing by 2.7% per year, create 8,500 additional new businesses annually, produce 17,000-29,000 patents for innovation, increase earnings for workers and lower health care costs by up to $194 billion over the next decade. Maybe.

What’s clear is that the FTC and regulators in DC and many states are watching the industry closely and many aren’t buying what we’re selling.

FDA approves latest weight-loss drug while AMA endorses coverage for obesity treatments

Posted on by • Posted in American Medical Association (AMA), Food and Drug Administration (FDA), Pharmaceutical Industry, Quality of Care, Quality of Life, Return on Investment, Wegovy, Weight Loss Drugs, Zepbound • Leave a comment

https://mailchi.mp/169732fa4667/the-weekly-gist-november-17-2023?e=d1e747d2d8

Last week, the Food and Drug Administration (FDA) announced the approval of Eli Lilly’s drug tirzepatide for treating obesity. The drug, which will be sold under the name Zepbound for obesity, is already branded as Mounjaro for diabetes treatment. 

While Novo Nordisk’s blockbuster semaglutide drug (sold as Wegovy for obesity and Ozempic for diabetes) works only as a GLP-1 agonist, tirzepatide also targets a second receptor and has been shown to elicit greater weight loss.

Spurred by trial results demonstrating significant health benefits beyond weight loss tied to these drugs, the American Medical Association House of Delegates voted this week to adopt a policy advocating for insurance coverage of GLP-1-based obesity treatments, affirming that it regards obesity as a disease, and that patients left untreated for the condition are at greater risk for serious health consequences.

To date, most insurers and self-funded employers have resisted covering weight loss drugs due to their prices: Zepbound has a list price of $1,060 per month, while Wegovy is priced at around $1,300 per month.

The Gist: We have entered a new era in treating obesity. 

Even with payers and employers dragging their feet over coverage decisions, and Medicare remaining prohibited from covering weight-loss drugs by law, consumer demand for the drugs has been strong enough to outpace supply. Zepbound’s approval will hopefully both improve availability and exert downward pricing pressure. 

While these drugs will undoubtedly contribute to higher healthcare spending in the short term, the long-term benefits of significant weight loss, combined with cardiovascular risk reduction, could lower healthcare costs over the patient’s lifespan—although the payer “holding the bag” for the cost today may not see the return, given that as many as 20 percent of individuals with commercial insurance switch carriers every year. 

Medicare finalizes physician pay cuts as Congress considers stepping in

Posted on by • Posted in American Medical Association (AMA), Center for Medicare and Medicaid Services (CMS), Medicare Payment Advisory Commission (MedPAC), Medicare Reimbursement, Physician Compensation, Physician Fee Schedule, Primary Care • Leave a comment

https://mailchi.mp/f12ce6f07b28/the-weekly-gist-november-10-2023?e=d1e747d2d8

Last week, the Centers for Medicare and Medicaid Services (CMS) issued the final 2024 Physician Fee Schedule, which reduces overall payment rates for physicians by 1.25 percent, including a 3.4 percent decrease in the conversion factor for relative value units, compared to 2023. 

The rule also implements a new add-on payment for complex evaluation and management visits, which is expected to boost pay for primary care physicians.

The American Medical Association (AMA) strongly opposes these cuts and immediately appealed to Congress for a reprieve. In response, the Senate Finance Committee unanimously advanced a bill to the Senate floor that would reduce the conversion-factor rate cut from 3.4 percent to 2.15 percent, while also delaying reductions in Medicaid disproportionate share funding for safety-net hospitals. Senate Majority Leader Chuck Schumer (D-NY) has indicated he intends to assemble a broad healthcare bill, including some or all of these provisions, by the end of this year. 

The Gist: Physicians were hopeful that inflation’s toll on labor and supply costs would earn them a break from continued Medicare pay cuts, but CMS remains committed to reductions within its budget neutrality framework.

Earlier this year, the Medicare Payment Advisory Commission (MedPAC) recommended for the first time that physician payments be tied to an index of physician practice inflation, but that would require legislative intervention, which Congress has not taken up. 

The AMA calculated that Medicare physician pay has lagged inflation by 26 percent since 2001, pointing to burnout and large numbers of physicians exiting the profession as a result. 

Until calls for Medicare payment reform are heeded, physicians, like health systems, will have to adopt new, lower-cost models of care to cope with what they will continue to see as insufficient reimbursements.

Why providers are paying fees to get paid

Posted on by • Posted in ACA, American Medical Association (AMA), Center for Medicare and Medicaid Services (CMS), Electronic Funds Transfer (EFT), Electronic Transmission, Health Policy, Medical Group Management Association (MGMA), Physician • Leave a comment

https://mailchi.mp/d29febe6ab3c/the-weekly-gist-august-25-2023?e=d1e747d2d8

An investigative piece published this month by ProPublica documents how it came to be that nearly 60 percent of healthcare providers report being charged fees to receive electronic payments from insurers. 

The fees, which can be as high as five percent of total reimbursement, were briefly forbidden by the Centers for Medicare and Medicaid Services (CMS), before the agency reversed its policy in 2018. The article follows one dogged physician’s efforts to uncover why CMS allows these fees. His voluminous stream of public records requests revealed a highly coordinated pressure campaign, mounted by the insurance industry through one particularly influential regulator-turned-lobbyist.

While the American Medical Association has urged the Biden administration to protect physicians from these fees, and the Veterans Health Administration is refusing to pay them, CMS is so far maintaining the position that electronic-payment claims-processing fees are permissible. 

The Gist: Through partnerships with payment companies, who charge double the average fees of electronic bank transfers and share the spoils of their “virtual credit cards”, insurers are essentially using the same business model as credit card companies, skimming revenue from physician payments just as Visa and MasterCard do to merchants. 

With the increasing consolidation of both insurers and claims processors, physicians are left with little recourse but to pay these fees, as nonelectronic payments come with infrastructure costs and payment delays.

While the shift to electronic payments spurred on by the Affordable Care Act was supposed to improve efficiency, this article offers yet another example of how efficiency gains can be captured by industry middlemen before they can be translated into provider and consumer benefits. 

Physicians beyond ‘breaking point’ want Medicare pay reform

Posted on by • Posted in American Medical Association (AMA), Health Policy, Healthcare Reform, Inflation, Medicare Payment Advisory Commission (MedPAC), Medicare Physician Fee Schedule (MPFS), Medicare Reimbursement, Physician Reimbursement • Leave a comment
https://www.beckershospitalreview.com/finance/physicians-beyond-breaking-point-want-medicare-reform.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

Physicians at the American Medical Association Annual Meeting called for an overhaul of the Medicare payment system, arguing that it is outdated and threatens the survival of independent practices and patients’ access to care.

“This cannot wait; we are past the breaking point. Congress must urgently address physician concerns about Medicare to account for inflation and the post-pandemic economic reality facing practices nationwide,” AMA President Jack Resneck Jr., MD, said in a June 12 news release. “Our patients are counting on us to deliver the message that access to health care is jeopardized by Medicare’s payment system. Being mad isn’t enough. We will develop a campaign — targeted and grass roots — that will drive home our message.”

Inflation, the pandemic, declining reimbursements and rising cost are making it more challenging for independent physicians to maintain their autonomy and are jeopardizing access to care, according to the AMA, which argues that CMS physician payments have declined 26 percent from 2001 to 2023 after accounting for inflation.

In January, the Medicare Payment Advisory Commission called for a physician payment update tied to the Medicare Economic Index for the first time, and, in April, a group of House members introduced a bill that would provide annual inflation updates to the Medicare fee schedule based on the index.

“Duct-taping the widening cracks of a dilapidated payment system has put us in this precarious situation,” Dr. Resneck said. “Physicians are united in our determination to build a solid foundation rather than further jury-rigging the system.”

Special Report: Physicians on the Brink or At the Starting Line?

Posted on by • Posted in America's Physician Groups (APG), American Medical Association (AMA), Caregiver Workforce, Center for Medicare and Medicaid Services (CMS), Consumerism, Health Policy, Medicaid, Medicare, Physician, Physician Burnout, Physician Compensation, Private Equity • Leave a comment
Special Report: Physicians on the Brink or At the Starting Line?

Tomorrow, America’s Physician Groups (APG) will kick-off its Annual Spring Conference “Going the Distance” in San Diego with breakout sessions focused on wide ranging operational issues and 3 general sessions that address restoring trust in the profession, lessons from the pandemic and Medicare Advantage.

Next Thursday, the American Medical Association (AMA) will kick off its 5-day House of Delegates session in Chicago with a plethora of resolutions and votes on the docket and committee reports on issues like the ethical impact of private equity on physicians in private equity owned practices, health insurer payment integrity and much more.

These meetings are coincident with the expected resolution of the debt-ceiling dispute in Congress which essentially leaves current Medicare and Medicaid payments to physicians and others in tact through 2025. So, for at least the time being, surprises in insurer payments to physicians are not anticipated.

Nonetheless, it’s a critical time for APG and AMA as their members face unparalleled market pressures:

  • Trust in the profession has eroded. Media attention to its bad actors has expanded.
  • Settings have changed: the majority now work as employees of large groups owned by hospitals or private equity sponsors.
  • Consumer (patient) expectations about physician quality, access and service are more exacting.
  • Technologies that improve precision in diagnostics and therapies and integration of social determinants in care planning have altered where, how and by whom care is delivered.
  • Affordability and lack of price transparency are fundamental concerns for U.S. consumers (and voters), employers and Congress. While drug PBMs, hospitals and health insurers are a focus of attention, physicians are not far behind.
  • Private equity and retail giants are creatine formidable competition in primary and specialty care.
  • Media coverage of “bad actors” engaged in fraudulent activity (i.e. unnecessary care, medications, et al) has increased.
  • Operating losses in hospitals remain significant limiting hospital investments in their employed medical practices.

Both organizations remain steadfast in the belief that the future for U.S. healthcare is physician centric:

  • For APG, it’s anchored in a core belief that changing payer incentives from fee-for-service to value is the essential means toward the system’s long-term sustainability and effectiveness. (APG represents 335 physician organizations)
  • For AMA, “true north” is the profession’s designated role as caregivers and stewards of the public’s health and wellbeing. (AMA’s membership includes 22% of the nation’s 1.34 million practicing physicians, medical students and residents).

But market conditions have taken their toll on physician psyche even as CMS has altered its value agenda.

Physicians are highly paid professionals. Per Sullivan Cotter and Kaufman Hall, their finances took a hit during the pandemic and their finances in 2022-2023 has been stymied by inflationary pressures. Thus, most worry about their income and they’re hyper-sensitive to critics of their compensation.

Fueling their frustration, virtually all believe insurance companies are reimbursement bullies, hospitals spend too much on executive salaries (aka suits) and administration and not enough on patient care and patients are increasingly difficult and unreasonable. Most think the profession hasn’t done enough to protect them and 65% say they’re burned out. That’s where APG and AMA find themselves relative to their members.

My take:

The backdrop for the APG and AMA meetings in the next 2 weeks could not be more daunting. Inflationary pressures dog the health economy as each advances an advocacy agenda suitable to their member’s needs.

But something is missing: a comprehensive, coherent, visionary view of the health system’s future in the next 10-20 years wherein physicians will play a key role.

That view should include…

  • How value and affordability are defined and actualized in policies and practice.
  • How the caregiver workforce is developed, composed and evaluated based on shifting demand.
  • How incentives should be set and funding sourced and rationalized across all settings and circumstances of service.
  • How consumerism can be operationalized.
  • How prices and costs in every sector (including physician services) can become readily accessible.
  • How a seamless system of health can be built.
  • How physician training and performance can be modernized to participate effectively in the system’s future.

The U.S. health system’s future is not a repeat of its past.  Recognizing this, physicians and the professional associations like APG and AMA that serve them have an obligation to define its future state NOW.

Some physicians are on the brink of despair; others are at the starting line ready to take on the challenge.

AMA president details ‘Kafkaesque’ prior authorization process

Posted on by • Posted in American Medical Association (AMA), Denial, Health Insurance Industry, Physician, Prescription Drugs, Prior Authorization • Leave a comment
https://www.beckerspayer.com/payer/ama-president-details-kafkaesque-prior-authorization-process.html?utm_campaign=payer&utm_source=website&utm_content=latestarticles

American Medical Association President Jack Resneck Jr., MD, detailed in a post on the medical group’s website the “Kafkaesque” prior authorization process that an unnamed insurance company allegedly put one of his patients through. 

Dr. Resneck, a San Francisco-based dermatologist, was treating a patient with severe head-to-toe eczema, who was unable to sleep because of the condition, according to the post. Dr. Resneck found a medication that allowed the patient to sleep and return to work. 

Several months later, however, the patient was unable to get the prescription refilled at the pharmacy, according to the report. Dr. Resneck completed the paperwork describing how well the patient had responded to the medication, as required by the insurance company, and faxed it over. The prior authorization request for the prescription refill was rejected. 

Dr. Resneck said the insurance company rejected the refill on the grounds that the patient no longer met the severity criteria because not enough of his body was covered and he was not missing enough sleep. 

The insurance company allegedly wanted to take the patient off the medication for several weeks to let his eczema flare up again, according to the post. It took more than 20 additional telephone calls until the patient’s prescription was refilled.

An overhaul for Medicare’s pay transformation program

Posted on by • Posted in ACA, Accountable Care Organization (ACO), Alternative Payment Model, American Medical Association (AMA), Health Policy, Medicare Shared Savings Program (MSSP), Population Health, Value Based Care Model, Value-Based Healthcare • Leave a comment
https://www.axios.com/2022/11/02/overhaul-medicares-pay-transformation-program?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

The Biden administration is trying to jump start a Medicare program that pays health providers based on patient outcomes rather than by how many services they perform.

Why it matters: The alternative payment effort was created through the Affordable Care Act, but participation has plateaued since 2018 amid waning interest from providers.

Driving the news: The Biden administration finalized an overhaul of the initiative, known as the Medicare Shared Savings Program, on Tuesday. Changes include offering groups of providers in rural and other underserved areas upfront payments to help them start out in the program.

  • The rule includes other provisions to make it less financial risky for provider groups to join, and makes it easier for participants to earn money back from the government year after year — a central perk of joining the program.

Zoom out: Medicare traditionally pays on a “fee-for-service” basis pegged to the number of patients seen and volume of procedures performed.

  • But one of the main funding sources for Medicare is set to run dry in 2028 if the federal government doesn’t make changes. Advocates say the solution at least partially lies in value-based care programs, like the Shared Savings Program.
  • Under the program, doctors, hospitals and other providers join form groups known as accountable care organizations. ACOs take responsibility for the care of a set of traditional Medicare patients.
  • If ACOs reduce total care costs for their members, they can get back a portion of that savings from the government. ACOs at more advanced stages of the program must pay the government back if total patient spending crosses a threshold.

By the numbers: ACOs have saved the federal government more than $17 billion since 2012, according to the National Association of Accountable Care Organizations.

  • In 2022, 483 ACOs participated in the program and took care of more than 11 million Medicare enrollees. But that’s down from 517 ACOs participating in 2020.
  • CMS set a goal last year to bring all 63 million-plus Medicare beneficiaries into a value-based care model by 2030. ACOs are a key player in achieving the goal.

Go deeper: Providers and value-based care advocates are also pushing Congress to extend a 5% pay bump for providers that participate in advanced alternative payment models, including some tracks of the Medicare Shared Savings Program. The bonus expires Dec. 31.

  • “If the bonus is not continued, it will soften or dampen the momentum toward alternative payment models, because it would create this mentality, or the view, that we’re not serious about that transformation,” said Mara McDermott, vice president at McDermott+Consulting and executive director of the Value Based Care Coalition.
  • Losing the bonus would also make it harder to recruit new providers into alternative payment models, she added.
  • The American Medical Association and five other health care groups launched a separate coalition Tuesday to rally around an extension of the 5% bonus.
  • “Patients and the healthcare system in the United States quite literally cannot afford to return to the days before Medicare incentivized healthcare providers for generating good results,” Clif Gaus, CEO of the National Association of ACOs, said in a news release about the coalition.

Also notable: The rule finalized Tuesday outlines physician payment rates for 2023. Interventional radiologists and vascular surgeons will see the largest Medicare cuts among physician specialties next year, though the final cuts are slightly lower than what CMS proposed in July.

  • Congress could stave off the cuts when they come back to Washington later this month.
  • “The Medicare payment schedule released today puts Congress on notice that a nearly 4.5 percent across-the-board reduction in payment rates is an ominous reality unless lawmakers act before Jan. 1,” American Medical Association President Jack Resneck said in a statement.
  • CMS finalized a slew of other policy proposals Tuesday, including provisions to reduce barriers to behavioral health care.

Biden Administration Releases Final Surprise Billing Rules

Posted on by • Posted in American Hospital Association (AHA), American Medical Association (AMA), Dept of Health and Human Services (HHS), Health System, Hospital, Hospital Industry, No Surprises Act, Out of Network, Out of Pocket Expenses, Out-of-Network, Rev Cycle Management, Revenue Cycle, Surprise Bills • Leave a comment
https://revcycleintelligence.com/news/biden-administration-releases-final-surprise-billing-rules?eid=CXTEL000000093912&elqCampaignId=27293&utm_source=nl&utm_medium=email&utm_campaign=newsletter&elqTrackId=c8729b5d07f349a1beedda5783f88786&elq=0864aca7b9b54ac0b6be420307de302f&elqaid=28141&elqat=1&elqCampaignId=27293

 The Biden Administration has released final surprise billing rules implementing the No Surprises Act, a federal law enacted in January 2021 that protects patients from out-of-network medical bills when they seek care at in-network facilities.

The new surprise billing rules detail the process for payers and providers to settle on payment for those out-of-network services. Previously, payers and providers would submit payment rates to an independent arbiter, selected by the government. The arbiter would choose the rate closest to the area’s median in-network payment for the services, otherwise known as the qualifying payment amount (QPA), while considering other factors, such as provider training and experience, the provider’s market share, and how difficult it was to provide the service, after the fact.

Provider groups have criticized the use of the QPA as the primary factor in an arbiter’s decision, arguing that the added weight to the QPA amount favors payers over providers.

Notably, the Texas Medical Association challenged the surprise billing arbitration process over the QPA issue and won. A district court vacated the requirement that arbiters select payment offers closest to the QPA unless the additional information warrants a closer review.

The American Hospital Association (AHA) and the American Medical Association (AMA) have also filed a lawsuit challenging the interim final rule implementing the dispute process, arguing that lawmakers did not intend for rules implementing the No Surprises Act to place that much emphasis on the QPA. The lawsuit is ongoing.

In light of the district court’s decision, the latest final surprise billing rules roll back the “rebuttable presumption” that favors the QPA. The rules state that arbiters are to consider the QPA “and then must consider all additional information submitted by a party to determine which offer best reflects the appropriate out-of-network rate.”

The final rules specify that arbiters “should select the offer that best represents the value of the item or service under dispute after considering the QPA and all permissible information submitted by the parties.”

The final rules also cover situations where payers have “downcoded” a claim. According to previous rulemaking, downcoding occurs when payers change service codes or change, add, or remove a modifier, which can lower the QPA for the service code or modifier billed by a provider.

The rules will create new requirements related to what information payers must share with providers when downcoding occurs. The information includes a statement that the service code or modifier was downcoded, an explanation of why the claim was downcoded, and the amount that would have been the QPA had the service code or modifier not been downcoded.

The Biden Administration—through the Departments of Labor, Health and Human Services, and Treasury, which officially released the final surprise billing rules—said that the rules “will help providers, facilities and air ambulance providers engage in more meaningful open negotiations with plans and issuers and will help inform the offers they submit to certified independent entities to resolve claim disputes.”

But whether the updated language is enough to tip the balance for providers remains to be seen. AHA said in a news release late last week that it is closely reviewing the final surprise billing rules.

Congress isn’t done with messy health care fights

Posted on by • Posted in Ambulance, American Hospital Association (AHA), American Medical Association (AMA), Health Policy, Health System, Hospital, Hospital Industry, Inflation Reduction Act, Medicare, Medicare Sequestration • Leave a comment

https://www.axios.com/2022/08/17/congress-isnt-done-with-messy-health-care-fights

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The Inflation Reduction Act is law. But that doesn’t mean major health care interests are done testing their lobbying clout. Many are already lining up for year-end relief from Medicare payment cuts, regulatory changes and inflation woes.

The big picture: Year-end spending bills often contain health care “extenders” that delay cuts to hospitals that treat the poorest patients or keep money flowing to community health centers. But lawmakers may be hard-pressed to justify the price tag this time, and are seeing an unusual assortment of appeals for help.

Background: 2% Medicare sequester cuts that had been paused by the pandemic took effect last month. Another 4% cut could come at year’s end, if lawmakers don’t delay it.

  • These automatic reductions in spending come amid health labor force shortages, supply chain problems and other pressures that are making providers jockey for relief.
  • It will fall to Congress to pick winners and losers among hospitals, physicians, home health care groups, nursing homes and ambulance services. And each says the consequences of not helping are dire.
  • “The core question is how do they come up with the money and how do they decide to prioritize who give it to?” said Raymond James analyst Chris Meekins.

Go deeper: Hospitals are pressing hard for relief from the year-end sequester, and want Congress to extend or make permanent programs that support rural facilities and are slated to expire on Sept. 30, absent legislative action.

  • The American Hospital Association has estimated its members will lose at least $3 billion by year’s end.
  • Hospitals in the government’s discount drug program also have to be made whole after the Supreme Court unanimously overturned a huge pay cut stemming from a 2018 rule. And the industry also is seeking to reverse a planned cuts to supplementary payments for uncompensated care.

Doctors and nursing homes are among the other players lining up for relief from sequester cuts, specific Medicare payment changes that affect their businesses or new regulations.

  • The American Medical Association says Medicare cuts could threaten physician practices that have been racked by pandemic-induced retirements and burnout. “This is really about allowing patients and Medicare beneficiaries to continue care,” AMA President Jack Resneck told Axios.
  • National Association for Home Care and Hospice President Bill Dombi said over half of the home health agencies will run deficits if lawmakers don’t act. “When you have that many providers in the red, you can foresee there will be negative consequences. They’re already rejecting 20 to 30% of referrals for admissions to care, so it will be affecting patients,” said Dombi.
  • Ambulance services are also struggling. “Ambulance providers around the country are at a very near breaking point as we kind of walk along the ledge leading to this cliff at the end of the calendar year,” Shawn Baird, president of the American Ambulance Association and chief operating officer of Metro West Ambulance in Oregon, told Axios.

The other side: Despite Congress’ willingness to delay payment cuts, there’s not enough money to make everyone happy. And concerns about Medicare program’s solvency that emerged during the lengthy debate over the Democrats’ tax, climate and health package could dampen lawmakers’ enthusiasm for costly fixes that favor one provider group.

  • The continuation of the COVID-19 public health emergency and its myriad temporary payment allowances could also lessen a sense of urgency around provider relief.

The bottom line: For all the dire warnings, it’s unlikely Congress will do much until December, when it will likely pass a continuing resolution or an omnibus spending bill and could then move to delay the 4% cut.