We’ve been hearing a growing number of stories from patients about difficulties scheduling appointments for specialist consults.
A friend’s 8-year-old son experienced a new-onset seizure and was told that the earliest she could schedule a new patient appointment with a pediatric neurologist at the local children’s hospital was the end of November. Concerned about a five-month wait time after the scary episode, she asked what she should do in the meantime: “They told me if I want him to be seen sooner, bring him to the ED at the hospital if it happens again.”
A colleague shared his frustration after his PCP advised him to see a gastroenterologist. Calling six practices on the recommended referral list, the earliest appointment he could find was nine weeks out; the scheduler at one practice noted that with everyone now scheduling colonoscopies and other procedures postponed during the pandemic, they are busier than they’ve been in years. Recent conversations with medical group leaders confirm a specialist access crunch.
Patients who delayed care last year are reemerging, and ones who were seen by telemedicine now want to come in person. “We are booked solid in almost every specialty, with wait times double what they were before COVID,” one medical group president shared. The spike in demand is compounded by staffing challenges: “I pray every day that another one of our nurses doesn’t quit, because it will take us months to replace them.”
Doctors and hospitals are now seeing a rise in acuity—cancers diagnosed at a more advanced stage, chronic disease patients presenting with more severe complications—due to care delayed by the pandemic. If patients can’t schedule needed appointments and procedures, this spike in severity could be prolonged, or even made worse.
For medical groups who can find ways to open additional access, it’s also an opportunity to capture new business and engender greater patient loyalty.
The number of independent physician practices continued to decline nationwide as health systems, payers, and investors accelerated their physician acquisition and employment strategies during the pandemic.
The graphic above highlights recent analysis from consulting firm Avalere Health and the nonprofit Physicians Advocacy Institute, finding that nearly half of physician practices are now owned by hospital or corporate entities, meaning insurers, disruptors, or other investor-owned companies.
This increase has been driven mainly by a surge in the number of corporate-owned practices, which has grown over 50 percent across the last two years. (Researchers said they were unable to accurately break down corporate employers more specifically, and that the study likelyundercounts the number of practices owned by private equity firms, given the lack of transparency in that segment.)
It’s no surprise that we’re seeing an uptick in physician employment, as about a quarter of physicians surveyed a year ago claimed COVID was making them more likely to sell or partner with other entities, and last year saw independent physicians’ average salary falling below that of hospital-employed physicians.
We expect the move away from private practice will continue throughout this year and beyond, as physicians seek financial stability and access to capital for necessary investments to remain competitive.
Telehealth claim lines as a percentage of all medical claims dropped 13% in April, marking the third straight month of declines, according to new data from nonprofit Fair Health.
The dip was greater than the drop of 5.1% in March, but not as large as the decrease of almost 16% in February. However, overall utilization remains significantly higher than pre-COVID-19 levels.
The decline appears to be driven by a rebound in in-person services, researchers said. Mental health conditions bucked the trend, however, as the percentage of telehealth claim lines associated with mental conditions — the No. 1 telehealth diagnosis — continued to rise nationally and in every U.S. region.
The coronavirus spurred an unprecedented increase in telehealth utilization early last year. But early data from 2021 suggests demand is slowing as vaccinations ramp up and COVID-19 cases decrease across the U.S.
Fair Health has used its database of over 33 billion private claims records to analyze the monthly evolution of telehealth since May last year. Telehealth usage peaked among the privately insured population last April, before easing through September and re-accelerating starting in October, as the coronavirus found a renewed foothold in the U.S.
In January, virtual care claims made up 7% of all medical claim lines, but that fell to 5.9% in February, 5.6% in March and just 4.9% in April, suggesting a steady deceleration in telehealth demand.
The deceleration in April was seen in all U.S. regions, but was particularly pronounced in the South, Fair Health said, which saw a 12.2% decrease in virtual care claims.
The trend doesn’t bode well for the ballooning virtual care sector, which has enjoyed historic levels of funding during COVID-19. Just halfway through the year, 2021 has already blown past 2020’s record for digital health funding, with a whopping $14.7 billion. This latest data suggests dampening utilization could throw cold water on the red-hot marketplace.
And policymakers are still mulling how many telehealth flexibilities should be allowed after the public health emergency expires, expected at the end of this year. Virtual care enjoys broad support on both sides of the aisle and the Biden administration’s top health policy regulators, including CMS administrator Chiquita Brooks-LaSure, have said they support permanently adopting virtual care coverage waivers, but returned restrictions on telehealth access could also stymie use.
Fair Health also found that nationally, mental health conditions increased from 57% from all telehealth claims in March to 59% in April. That month, psychotherapeutic/psychiatric codes jumped nationally as a percentage of telehealth procedure codes, while evaluation and management codes dropped, suggesting a continued need for virtual access to mental health services, which can be some of the rarest and most expensive medical services to find in one’s own geographic area.
Also in April, acute respiratory diseases and infections increased as a percentage of claim lines nationally, and in the Midwest and South, while general signs and symptoms joined the top five telehealth diagnoses in the West. Both trends suggest a return to non-COVID-19 respiratory conditions, like colds and bronchitis, and more ‘normal’ conditions like stomach viruses, researchers said.
A Cleveland Clinic-owned hospital system in Akron, Ohio, is paying the federal government $21.3 million to settle claims it illegally billed the Medicare program.
Akron General Health System allegedly overpaid physicians well above market value for referring physicians to the system, violating the Anti-Kickback Statute and Physician Self-Referral Law, and then billed Medicare for the improperly referred business, violating the False Claims Act, between August 2010 and March 2016.
Along with an AGHS whistleblower,the Cleveland Clinic Foundation, which acquired the system at the end of 2015, voluntarily disclosed to the federal government its concerns with the compensation arrangements, which were enacted by AGHS’ prior leadership, the Department of Justice said Friday.
The Anti-Kickback Statute forbids providers from paying for or otherwise soliciting other parties to get them to refer patients covered by federal programs like Medicare, while the Physician Self-Referral Law, otherwise known as the Stark Law, prohibits a hospital from billing for those services.Despite the laws and a bevy of other regulations resulting in a barrage of DOJ lawsuits and been a thorn in the side of providers for decades, fraud is still rampant in healthcare.
“Physicians must make referrals and other medical decisions based on what is best for patients, not to serve profit-boosting business arrangements,” HHS Office of Inspector General Special Agent in Charge Lamont Pugh said in a statement on the AGHS settlement.
Cleveland Clinic struck a deal with AGHS in 2014, agreeing to pay $100 million for minority ownership in the system. The agreement gave the clinic the option to fully acquire AGHS after a year, which it exercised as soon as that period expired in August 2015.
The settlement stems from a whistleblower suit brought by AGHS’s former Director of Internal Audit Beverly Brouse, who will receive a portion of the settlement, the DOJ said. The False Claims Act allows whistleblowers to share in the proceeds of a suit.
As fraud has increased in healthcare over the past decade — the DOJ reported 247 new matters for potential investigation in 2000, 427 in 2010 and 505 in 2019 — the federal government has renewed its efforts to crack down on illegal schemes. That’s resulted in the formation of groups like the Medicare Fraud Strike Force in 2007 and the Opioid Fraud and Abuse Detection Unit in 2017, which has in turn resulted in the DOJ recovering huge sums in stings, settlements and guilty verdicts.
Some of the biggest settlements reach into the hundreds of millions, and involve billions in false claims.
In 2018, DOJ charged more than 600 people for falsely billing federal programs more than $2 billion; last year federal agencies charged almost 350 people for submitting more than $6 billion in false claims. That last case led to creation of a rapid response strike force to investigate fraud involving major providers in multiple geographies.
Other large settlements include Walgreens’ $270 million fine in 2019 to settle lawsuits accusing the pharmacy giant of improperly billing Medicare and Medicaid for drug reimbursements; hospital operator UHS’ $122 million settlement last summer finalizing a fraudulent billing case with the DOJ after being accused of fraudulently billing Medicare and Medicaid for services at its behavioral healthcare facilities; and West Virginia’s oldest hospital, nonprofit Wheeling Hospital, agreeing in September to pay $50 million to settle allegations it systematically violated the laws against physician kickbacks, improper referrals and false billing.
EHR vendor eClinicalWorks paid $155 million to settle False Claims Act allegations around misrepresentation of software capabilities in 2017, while Florida-based EHR vendor Greenway Health was hit with a $57.3 million fine in 2019 to to settle allegations the vendor caused users to submit false claims to the EHR Incentives Program.
We spoke this week with a medical group president looking to deploy a more consistent consumer experience across his health system’s physician practices, beginning with primary care.
The discussion quickly turned to two large primary care practices, acquired several years ago, whose doctors are extremely resistant to change. “These guys have built a fee-for-service model that has been extremely lucrative,” the executive shared. “It was a battle getting them on centralized scheduling a few years ago, and now they’re pushing back against telemedicine.”
With ancillary income included, many of these “entrepreneurial” primary care doctors are making over $700K annually, while the rest of the system’s full-time primary care physicians average around $250K.
The situation raises several questions. Standardized access and consistent experience are foundational to consumer strategy; in the words of one CEO, if our system’s name is on the door, any of our care sites should feel like they are part of the same system, from the patient’s perspective.
But how can we get physicians on board with “systemization” if they think it puts their income at risk? Should the system guarantee income to “keep them whole”, and for how long? And is it possible to create consensus across a group of doctors with a three-fold disparity in income, and widely divergent interests? While there are no easy answers, putting patients and consumers first must be the guiding goal of the system.
Three Ascension hospitals in Texas agreed to pay $20.9 million for allegedly paying multiple physician groups above fair market value for services, according to a recent news release from the HHS’ Office of Inspector General.
The three Texas hospitals are Ascension’s Dell Seton Medical Center in Austin, Ascension Seton Medical Center Austin and Ascension Seton Williamson in Roundrock. Ascension self-disclosed the conduct to the inspector general.
The hospitals allegedly violated the Civil Monetary Penalties Law, including provisions related to physician self-referrals and kickbacks in seven instances, according to the April 30 news release.
Some of the allegations the report outlined include Dell Seton paying an Austin physician practice above fair market value for on-call coverage; Ascension Seton Austin paying an Austin practice above fair market value for transplant on-call coverage and administrative services; and Ascension Seton Williamson paying a practice above fair market value to lease the practice’s employed registered nurses and surgical technologists who assisted in surgeries at the hospital.
The release did not disclose the physician groups allegedly involved.
Members of an influential congressional advisory committee on Medicare are torn on how best to regulate telehealth after the COVID-19 public health emergency, hinting at the difficulty Washington faces as it looks to impose guardrails on virtual care without restricting its use after the pandemic ends.
During a Thursday virtual meeting, the Medicare Payment Advisory Commission expressed its support of telehealth broadly, but many members noted snowballing use of the new modality could create more fraud and abuse in the system down the line.
Key questions of how much Medicare reimburses for telehealth visits and what type of visits are paid for won’t be easily answered, MedPAC commissioners noted. “This is a really, really difficult nut to crack,” Michael Chernew, MedPAC chairman and a healthcare policy professor at Harvard Medical School, said.
Virtual care has kept much of the industry running during the coronavirus pandemic, allowing patients to receive needed care at home. Much of this was possible due to the declaration of a public health emergency early 2020, allowing Medicare to reimburse for a greater swath of telehealth services and nixing other restrictions on virtual care.
However, much of that freedom is only in place for the duration of the public health emergency, leaving regulators and legislators scrambling to figure which new flexibilities they should codify, and which perhaps are best left in the past along with COVID-19.
It’s a tricky debate as Washington looks to strike a balance between keeping access open and costs low.
In a Thursday meeting, MedPAC debated a handful of policy proposals to try and navigate this tightrope. Analysts floated ideas like making some expansions permanent for all fee-for-service clinicians; covering certain telehealth services for all beneficiaries that can be received in their homes; and covering telehealth services if they meet CMS’ criteria for an allowable service.
But many MedPAC members were wary of making any concrete near-term policy changes, suggesting instead the industry should be allowed to test drive new telehealth regulations after COVID-19 without baking them in permanently.
“I don’t think what we’ve done with the pandemic can be considered pilot testing. I think a lot of this is likely to go forward no matter what we do because the gate has been opened, and it’s going to be really hard to close it,” Marjorie Ginsburg, founder of the Center for Healthcare Decisions, said. But “I see this just exploding into more fraud and abuse than we can even begin imagining.”
Paul Ginsburg, health policy chair at the Brookings Institution, suggested a two-year pilot of any changes after the public health emergency ends.
However, it would be “regressive” to roll back all the gains virtual care has made over the past year, according to Jonathan Perlin, CMO of health system HCA.
“These technologies are such a part of the environment that at this point, I fear [it] would be anachronistic not to accept that reality,” Perlin said.
Among other questions, commissioners were split on how much Medicare should pay for telehealth after the pandemic ends.
That parity debate is perhaps the biggest question mark hanging over the future of the industry. Detractors argue virtual care services involve lower practice costs, as remote physicians not in an office don’t need to shell out for supplies and staff. Paying at parity could distort prices, and cause fee-for-service physicians to prioritize delivering telehealth services over in-person ones, some commissioners warned.
Other MedPAC members pointed out a lower payment rate could stifle technological innovation at a pivotal time for the healthcare industry.
MedPAC analysts suggested paying lower rates for virtual care services than in-person ones, and paying less for audio-only services than video.
Commissioners agreed audio-only services should be allowed, but that a lower rate was fair. Commissioner Dana Gelb Safran, SVP at Well Health, suggested CMS should consider outlining certain services where video must be used out of clinical necessity.
Previously, telehealth services needed a video component to be reimbursed. Proponents argue expanded access to audio-only services will improve care access, especially for low-income populations that might not have the broadband access or technology to facilitate a video visit.
Another major concern for commissioners is how permanently expanding telehealth access would affect direct-to-consumer telehealth giants like Teladoc and Amwell. If all telehealth services delivered at home are covered, that could allow the private companies to “really take over the industry,” Larry Casalino, health policy chief in the Weill Cornell Department of Healthcare Policy and Research, said.
Because of the lower back-end costs for virtual care than in-office services, paying vendors the same rate as in-office physicians could drive a lot of brick-and-mortar doctors out of business, commissioners warned.
UnitedHealth Group, both the nation’s largest health insurer and largest employer of physicians, just announced plans to continue to rapidly grow the number of physicians in its Optum division.
This week CEO Dave Wichmann told investors in the company’s fourth quarter earnings call that Optum entered 2021 with over 50,000 employed or affiliated physicians, and expects to add at least 10,000 more across the year.(For context,HCA Healthcare, the largest for-profit US health system, employs or affiliates with roughly 46,000 physicians, and Kaiser Permanente employs about 23,300.) Optum is already making progress toward its ambitious goal with the announcement last week that the company is in talks to acquire Atrius Health, a 715-physician practice in the Boston area.
As was the case with other health plans, United’s health insurance business took an expected hit last quarter due to increased costs from COVID testing and treatment, combined with rebounding healthcare utilization. Optum, however, saw revenue up over 20 percent, which drove much of the company’s overall fourth quarter growth.
Expect United, and other large insurers, flush with record profits from last year, to continue to expand their portfolio of care, digital and analytics assets(see also Optum’s recently announced plan to acquire Change Healthcare for $13B) as they looks to grow integrated insurance and care delivery offerings.
It’s part of what we expect to be a 2021 “land grab” for strategic advantage in healthcare, as providers, health plans, and disruptors look to create comprehensive platforms to secure long-term consumer loyalty.
The FTC wants to figure out how hospitals’ acquisitions of physician practices has affected competition.
The agency sent orders to some of the nation’s largest insurance companies, including UnitedHealthcare, Anthem, Aetna, Cigna, Florida Blue and Health Care Service Corporation.
This action is part of a larger effort underway at the agency to consider new questions and areas of study to help it understand the ultimate impact of mergers. The hope is that those studies will yield evidence to better equip the agency to legally challenge mergers in the future.
Health economists cheered the news online following the FTC’s Thursday’s announcement about studying physician practice buy-ups.
Martin Gaynor, former director of FTC’s Bureau of Economics, tweeted: “This is a big deal – a huge # of physician practices are now owned by hospitals.” Gaynor is a health economist at Carnegie Mellon.
In the orders, the FTC asks the insurers for data such as the total billed charges of all health providers, total deductibles, copays and coinsurance paid by the patient. It also asks for data tied to each inpatient admission and outpatient and physician episodes during the time period in question, which will likely result in a barrage of data for the agency to review.
“The study results should aid the FTC’s enforcement mission by providing much more detailed information than is currently available about how physician practice mergers and healthcare facility mergers affect competition,” the agency said in a statement.
This area of study expands the agency’s current work. One area already of interest within this broader retrospective merger review program is the scrutiny of labor markets.
One area of concern for the FTC is states’ willingness to greenlight COPAs, or certificates of public advantage (COPAs), which essentially shield mergers from federal antitrust regulators in exchange for prolonged state oversight.