VC Viewpoint: Cash-pay Care Delivery Has a Serious Social Stratification Problem

http://www.medcitynews.com

When it comes to her feelings about investing in care delivery startups, it’s a real “mixed bag” for Ulili Onovakpuri, managing partner at Kapor Capital. This is because a lot of them operate on a cash-pay model. She summarized the issue quite succinctly: there’s an incredible amount of innovation happening, but the people who could benefit the most from this type of care will be the last ones to receive it.

Healthcare investors are facing a myriad of care delivery startups seeking their capital. And it’s an interesting time in the care delivery startup space — there’s more and more questions arising about how much scrutiny should be applied to the way these companies are growing, what should be included in their gross margins, and how they should be valued.

When it comes to her feelings about investing in care delivery startups, it’s a real “mixed bag” for Ulili Onovakpuri, managing partner at Kapor Capital. She said so Sunday at Engage at HLTH, a patient engagement summit hosted by MedCity News in Las Vegas.

Healthcare is a stratified experience in the U.S. Onovakpuri drew attention to the fact that this stratification is getting worse with the advent of provider startups that operate on a cash-pay model, such as Sesame and Tia

These types of cash-pay providers usually offer a simpler healthcare experience compared to the endless bureaucracy and billing confusion patients face in the traditional healthcare system. This can be very attractive to patients — they don’t want to deal with months-long wait times to see a provider, nor do they wish to navigate the Kafkaesque ordeal of trying to understand and pay their healthcare bills.

In Onovakpuri’s view, these cash-pay providers “are good for some” — those who can afford it. But those who lack the means to pay for care outside the traditional healthcare delivery system don’t get to take part in these startups’ care model, regardless of how innovative or convenient it may be.

“If I’m honest, it’s hard for me because I see a lot of great tech every single day, and when I talk to them, I’m like, ‘Wait, this is awesome — how much is this?’ and then I say, ‘Well, we can’t do it because the people that we care the most about can’t afford it.’ And it’s hard, because they’re probably the folks who need it the most,” Onovakpuri said.

She summarized the issue quite succinctly: there’s an incredible amount of innovation happening, but the people who could benefit the most from this type of care will be the last ones to receive it.

“Innovation is great, but it’s another dividing factor we face,” Onovakpuri declared.

Onovakpuri noted another key concern: the fact that many of the country’s most talented physicians are opting to leave their hospitals and health systems to work for cash-pay care delivery startups. She said she can understand why they make this choice (they are understandably fed up with the inefficiency of standard systems), but it still is a problem because it exacerbates hospitals’ labor shortage crisis and makes their patients wait times even longer to receive care.

Residents at New York City hospitals seek union recognition

https://mailchi.mp/cfd0577540a3/the-weekly-gist-november-11-2022?e=d1e747d2d8

 Last week, over 1,200 resident physicians and interns at Montefiore Medical Center, one of the largest employers in New York City, with four hospitals in the Bronx, held an organizing vote and requested voluntary recognition of their bargaining unit. The residents organized under the Committee of Interns and Residents, a unit of the Service Employees International Union that claims 22K members and has established unions at five hospitals this year. Roughly seven percent of practicing doctors were unionized as of 2019; that number has grown in the wake of pandemic-induced burnout and industry consolidation. Montefiore Medical Center declined to voluntarily recognize the union and has requested that the union re-form via a secret ballot election.

The Gist: Health system executives may see the possibility of resident unions as another headache amid the ongoing labor crisis, but the drivers of the crisis—burnout, workplace safety concerns, work-life balance, and real-wage erosion—are responsible for the growing appeal of unions for physicians. Fueled by economy-wide stressors, unionization has been growing in nontraditional labor sectors, including among baristas and tech workers, and medical residents may be the next to join that wave.

Health systems worried about resident unionization should address residents’ concerns about working conditions proactively, which may involve reevaluating wages in light of residents’ significant contributions to operational and financial success.  

The Alarming Way Doctors Approach Caring for the Disabled

https://mailchi.mp/cd392de550e2/the-weekly-gist-october-21-2022?e=d1e747d2d8

 In a concerning New York Times article, reporter Gina Kolata relates the findings of a recent Health Affairs study that convened focus groups of physicians to anonymously discuss the ways they provide—or too often, don’t provide—care to disabled patients. Many admitted to avoiding seeing patients in wheelchairs and complained about having to provide accommodations to speech-impaired patients, citing the high costs of adapting their clinic operations while dealing with disruptions to workflow. People with disabilities interviewed for the article, including Harvard professor of medicine Dr. Lisa Iezzoni, who ran the study, found its results confirmed impressions of widespread bias against the disabled, which is pervasive across healthcare. 

The Gist: Reducing disparities in access and quality of care for disabled people often receives less attention than reducing economic, racial, and gender disparities. What’s revealing about this piece is how these disparities among disabled patients manifest, ranging from personal biases (physicians not wanting or knowing how to care for certain groups of disabled people) to structural challenges (constraints of time, money, and facilities needed for proper care). However, for disabled patients, these factors result in an often substandard and unacceptable healthcare experience, which must be addressed head-on by physician and health system leaders.

Managing against a decline in “physician hours worked”

https://mailchi.mp/4587dc321337/the-weekly-gist-october-14-2022?e=d1e747d2d8

Last week a health system chief medical officer asked if we were hearing other systems complain of difficulties in securing call coverage for key specialties, particularly orthopedics, GI and urology. We agreed: with proceduralists building larger outpatient businesses, often funded by investors, there is less incentive for groups to support hospital call. To fill the gaps, hospitals are having to negotiate lucrative deals for coverage, and the market feels like the “deal for every doc” years in the early 2000s, when specialists had leverage to negotiate bespoke partnership contracts. In this leader’s case, he ended up brokering a deal with gastroenterologists to serve in a hospital-based role, providing in-house coverage for consults. “These docs are able to make $600K a year, working about 30 hours per week. It’s insane,” he lamented. 
 
But beyond the cost of talent, he was concerned about the larger ramifications of these kind of roles on physician supply. “I’ve been thinking about a metric along the lines of ‘lifetime physician hours worked’, and how that has changed over time,” he shared. He explained that physicians of his generation expected to work 60- to 80- hour weeks for most of their careers. Most younger doctors want to work much less, say 40 or 50 hours.

Over a forty-year career, he calculated, the healthcare system could get 36,800, or roughly a third fewer, “lifetime work-hours” from a doctor starting today. And most early-career doctors also plan to retire younger. “Now don’t get me wrong,” he continued, “We probably worked too hard, and these younger guys are onto something.” But he was concerned about the ramifications for physician supply, and posited we are poised for a deep shortage of clinical talent.

Creating the future physician workforce will require not only training more doctors, but also finding ways to make their work hours more efficient, with greater use of technology and other caregivers, who must also be trained in greater numbers. It takes at least four years to train a nurse, and nearly a decade before a student entering medical school today becomes a practicing physician—we can’t afford such a long lag time before more physician capacity comes online.

Healthcare CEO, physicians sentenced to prison for $27M fraud

Thirteen people involved in a $27 million healthcare fraud scheme have been sentenced to a combined 84 years in federal prison, the Justice Department announced Aug. 31. 

The defendants allegedly participated in a fraud scheme that involved Novus Health Services, a Dallas-based hospice agency. The defendants allegedly defrauded Medicare by submitting false claims for hospice services, providing kickbacks for referrals and violating HIPAA to recruit beneficiaries. Novus employees also dispensed controlled substances to patients without the guidance of medical professionals, according to the Justice Department. 

Novus CEO Bradley Harris admitted to the fraud and testified against two physicians who elected to go to trial. Mr. Harris pleaded guilty to one count of conspiracy to commit healthcare fraud and one count of healthcare fraud and aiding and abetting. He was sentenced to 159 months in federal prison in January. 

The 12 others convicted in the scheme include three physicians, four nurses and several executives. 

Read more here

CMS Releases 2023 MPFS Proposed Rule

On July 7, 2022, the Centers for Medicare & Medicaid Services (CMS) released the 2023 Medicare Physician Fee Schedule (MPFS) proposed rule, which includes payment provisions and policy changes to the Quality Payment Program (QPP) and Alternative Payment Model (APM) participation options and requirements for 2023.

MPFS Key Proposals and Additional Potential Medicare Reductions:

For 2023, CMS proposes a Conversion Factor (CF) of $33.0775 which is a decrease of $1.53 or -4.42% from the 2022 conversion factor of 34.6062.

  • This significant reduction in the CF accounts for the expiration of the 3.00% increase in PFS payments for CY 2022 as required by the Protecting Medicare and American Farmers from Sequester Cuts Act, in addition to the statutorily required budget neutrality adjustment to account for changes in Relative Value Units.
  • The separately calculated Anesthesia CF is proposed at 20.7191, a -3.91% decrease from the 2022 conversion factor of $21.5623.

Key Takeaways:
CMS estimates an impact to allowed charges from policy changes in the rule as outlined below. These impacts are due in part due changes in the RVUs and the second year of the transition to clinical labor pricing updates.


(Please note: These estimates do not include the impact on payments from the expiration of the congressionally mandated 3.00% boost to the 2022 CF.)

  • Anesthesiology: -1%
  • Diagnostic Radiology: -3%
  • Interventional Radiology: -4%
  • Emergency Medicine: +1%
  • Critical Care: +1%
  • Nuclear Medicine: -3%
  • Pathology: -1%
  • Radiation Oncology/Therapy Centers: -1%
  • Internal Medicine: +3%
  • Independent Laboratory -1%

Additional Potential Medicare Reductions:

  • In addition to the proposed cut to the CF, the second of two sequestration cuts was implemented on July 1, 2022, at -1%, bringing the total sequestration cut to -2% which will continue without Congressional intervention. 
  • Also, the lack of full funding of the American Rescue Plan meant that the Medicare program would contribute 4% under the “PAYGO” (Pay as You Go) rules and that cut will come back into the Medicare fee schedule in 2023. In total, hospital-based physicians face in the approximate range of -10% in 2023 without Congressional intervention.  

Appropriate Use Criteria (AUC):
CMS did not address the appropriate use criteria (AUC)/clinical decision support (CDS) mandate for
advanced diagnostic imaging services in this rule. CMS posted an update on its website indicating that
the current educational and operations testing period will continue beyond January 1, 2023, even if the
COVID-19 public health emergency (PHE) ends in 2022. The notice states that the agency is unable to
forecast when the payment penalty phase of the program will begin. Read more at CMS.gov.


Additional highlights of the MPFS Proposed Rule include:
Evaluations and Management (E/M) Services:

As part of the ongoing updates to E/M visits and the related coding guidelines that are intended to
reduce administrative burden, the AMA CPT Editorial Panel approved revised coding and updated
guidelines for Other E/M visits, effective January 1, 2023.


Like the approach CMS finalized in the CY 2021 MPFS final rule for office/outpatient E/M visit coding and
documentation, CMS is proposing to adopt most changes in coding and documentation for Other E/M
visits including: hospital inpatient, hospital observation, emergency department, nursing facility, home
or residence services, and cognitive impairment assessment, effective January 1, 2023. This revised
coding and documentation framework would include CPT code definition changes (revisions to the
Other E/M code descriptors), and for the first time would mean that AMA CPT and CMS would follow
the same coding guidelines, including:


• New descriptor times (where relevant).
• Revised interpretive guidelines for levels of medical decision making.
• Choice of medical decision making or time to select code level (except for services such as
emergency department visits (time has never been a component of ED E/M services except
critical care) and cognitive impairment assessment, which are not timed services).
• Eliminated use of history and exam to determine code level (instead there would be a
requirement for a medically appropriate history and exam).


Split (or Shared) Visits (Where services are performed by advance practice clinicians.)
CMS had previously finalized in the 2022 MPFS final rule a new January 1, 2023 billing policy for
instances in which a physician delivers an E/M service along with an advanced practice clinician (APC).
Recall that E/M services billed under an APC reimburse at 85% of the MPFS unless there is a
documented shared service by the supervising physician.

• The key determinant for deciding if there was a shared service is if the physician provided key
elements of the history, exam, or medical decision making ─ OR half of the total time spent
treating the patient.
• There were significant concerns that in hospital-based settings, the rule (set for implementation
on January 1, 2023) would have required only time as the determinative element, and that the
majority of APC services would then be reimbursed at 85% of the fee schedule. After significant
advocacy by multiple stakeholders, CMS has delayed the policy that would have based the
determination of the billing practitioner solely on time. This policy is proposed for delay until
January 1, 2024 while CMS collects additional input.


Expand Telehealth Coverage:
• CMS is proposing making several services that are temporarily available as telehealth services
for the PHE available through CY 2023 on a Category III basis, which will allow more time for
collection of data that could support their eventual inclusion as permanent additions to the
Medicare telehealth services list.
• CMS is also proposing to extend the duration of time that services are temporarily included on
the telehealth services list during the PHE, but are not included on a Category I, II, or III basis for
a period of 151 days following the end of the PHE, in alignment with the Consolidated
Appropriations Act, 2022 (CAA, 2022).


Highlights of the Quality Payment Program (QPP):
CMS stated they are limiting proposals for traditional MIPS and focusing on further refining
implementation of MIPS Value Pathways (MVPs).
2023 Proposed Performance Threshold and Performance Category Weights:
The performance threshold for the 2023 performance year is proposed to be 75 points, same as 2022.
• Beginning with 2023, CMS will no longer offer an exceptional performance adjustment.
• The category weights for the 2023 performance year are proposed to remain the same as the
2022 weights:
o Quality – 30%,
o Cost – 30%
o Promoting interoperability – 25%
o Improvement Activities – 15%


Data Completeness Requirements:
• For 2023, CMS is proposing quality measure submissions should continue to account for at least
70% of total exam volume – same as 2022.

• CMS proposed to increase this threshold to 75% beginning with the 2024 and 2025 performance
years.


Quality Category – Measure Scoring System
• Beginning with 2023 CMS will change the scoring range for benchmarked measures to 1 to 10
points, doing away with the 3-point floor.
• Score existing non-benchmarked measures at 0 points even if data completeness is met
• New measures will continue to be scored at a minimum of 7 points for their first year and a
minimum of 5 points in their second year.
• CMS is maintaining the small practice bonus of 6 points that is included in the Quality
• performance category score.
• CMS also continues to award small practices 3 points for submitted quality measures that do not
meet case minimum requirements or do not have a benchmark.


MIPS Value Pathways (MVPs)
CMS is proposing 5 new MVPs and revising the 7 previously established MVPs that would be available
beginning with the 2023 performance year.
• Advancing Cancer Care
• Optimal Care for Kidney Health
• Optimal Care for Patients with Episodic Neurological Conditions
• Supportive Care for Neurodegenerative Conditions
• Promoting Wellness


Advanced Alternative Payment Models
For payment years 2019 through 2024, Qualifying APM Participants (QPs) receive a 5 percent APM
Incentive Payment. After performance year 2022, which correlates with payment year 2024, there is no
further statutory authority for a 5 percent APM Incentive Payment for eligible clinicians who become
QPs for a year.


CMS is concerned that the statutory incentive structure under the QPP beginning in the 2023
performance year. corresponding 2025 payment year, could lead to a drop in Advanced APM
participation, and a corresponding increase in MIPS participation. As a result, CMS concluded that it
would forego action for the 2023 performance period and 2025 payment year. They instead are seeking
public input in identifying potential options for the 2024 performance period and 2026 payment year of
the QPP.

Threats of prison time put gynecologists in impossible circumstances

https://mailchi.mp/9e0c56723d09/the-weekly-gist-july-8-2022?e=d1e747d2d8

In states with laws that criminalize performing abortions, physicians are facing the dilemma of having to wait until a pregnant patient’s death is imminent to perform a potentially lifesaving procedure. Reporting from STAT News reveals how these laws are disrupting care. A physician in Missouri, which outlaws all abortions unless the life of the mother is in danger, described having to spend hours getting clearance from a hospital ethics team to perform the procedure on a patient with an ectopic pregnancy.

Even non-pregnancy care is being impacted. An arthritis patient taking methotrexate, which can also be used for abortion, was told by her doctor that all prescriptions for the drug are on pause due to legal uncertainty.

The Gist: Doctors and hospital legal counsel are dealing with a new legal landscape, marked by restrictive, ill-defined anti-abortion laws that fail to clarify what constitutes a medical emergency.

Physicians are forced to interpret unclear laws, often written without help from medical professionals, and many feel compelled to wait until patients are in dangerous, life-threatening situations to provide care—the opposite of what was instilled in them during years of training.